Recycled plastic end user Azek reported higher sales of its residential products in the 2023 fiscal year, a category that includes decking and trim made from recycled PE and PVC. The company also reported increasing its use of recycled plastic throughout 2023.
The Chicago-headquartered company manufactures a variety of composite decking and trim products containing recycled plastic and recycled wood. It is a large consumer of post-consumer and post-industrial HDPE and LDPE, post-consumer and post-industrial PVC, and recycled wood. The company describes itself as the largest vertically integrated PVC recycling company in the U.S.
Azek on Nov. 28 held a conference call to discuss its 2023 fourth-quarter earnings. The company reported net sales totaling $388.8 million in the fourth quarter, which ended Sept. 30, up 27.6% year over year. For the full-year, net sales totaled $1.37 billion, up 1% over the $1.36 billion in 2022 sales, the company reported in an annual report published Nov. 29.
The company attributed the increase to positive pricing and sales growth from recent acquisitions. The residential segment, which includes products made from recycled content and makes up 89% of the company’s net sales, saw sales increase by 37.6% in the fourth-quarter year over year and 4.6% for the entire year. The commercial segment saw sales plummet by 22.4% for the quarter year over year and 21.1% for the year.
The company’s net income decreased from $75 million in 2022 to $68 million in 2023.
Azek began using recycled materials in 2018. In 2019, it opened a 100,000-square-foot PE recycling plant in Wilmington, Ohio, processing post-consumer and post-industrial PE sourced from retailers, haulers and municipal recycling programs. The company entered the PVC recycling space in 2020 with its acquisition of Return Polymers, which operates a PVC recycling plant in Ashland, Ohio, and another in Dowagiac, Mich.
The PE is used in TimberTech Composite Decking (which contains an average of 85% recycled content, a figure that also includes recycled wood), and the PVC makes it into TimberTech Advanced PVC Decking and Azek Exterior PVC Trim (average of 60% recycled content).
During the call, CEO Jesse Singh noted that during the 2023 fiscal year, the company “increased the amount of recycled content we use in our TimberTech Advanced PVC decking and our Exteriors products.”
The company also began selling its PaintPro Prefinished Siding and Trim products – which contain high recycled content – into a wider geographical area. It’s now being sold across the country, Singh noted.
During the conference call with market analysts, company executives were asked whether there are financial opportunities the company can realize from using greater amounts of recycled content. Chief Financial Officer Peter Clifford said the company has the opportunity to move to “cheaper grades of recycled” in its composite decking. He said the company can also increase recycled content further in its PVC deck and trim products.
And he added Azek sees the opportunity to reduce its recycled plastic processing costs across all three of its product lines that use recycled content.
“For us, recycling is more iteration than innovation,” he said, indicating the company is focused on improving and expanding what it is already doing, in order to bolster its recycling initiatives.
