Dow acquires film recycler Circulus as part of larger circularity push

Dow Inc., which is trying to dramatically increase its use of recovered resin by the end of the decade, has acquired a private equity-backed plastics film recycler.

Midland, Mich.-based Dow said Circulus Holdings PBLLC has facilities recycling low density polyethylene in Ardmore, Okla., and Arab, Ala., with a total reprocessing capacity of 50,000 metric tons annually.

Terms of the deal were not disclosed.

Ara Partners, a private equity firm focused on projects that decarbonize the economy, invested in Circulus in 2019.

"This acquisition will allow Dow to combine our company's industry leading materials science technology with Circulus' film recycling expertise to accelerate progress towards our 2030 Transform the Waste goal," Karen Carter, president of Dow Packaging and Specialty Plastics, said in a statement.

"It will also expand how we participate in the industry, allowing us to generate value for our customers by directly producing more higher performing circular products that brands and consumers are demanding," Carter said.

Dow's 2030 Transform the Waste project aims to commercialize 3 million metric tons of "circular and green solutions" annually. To do this, Dow is building systems to collect, reuse or recycle waste.

Dow's purchase of Circulus continues a wider trend of resin producers moving into recycling through acquisitions and partnerships.

Virgin resin makers, under increasing pressure to add recycled content, have looked to both mechanical recycling and chemical recycling as ways to diversify their portfolios for a customer base that has been itching for more recycled content.

Circulus uses mechanical recycling, which does not alter the chemical structure of plastics. Chemical recycling, by comparison, uses a variety of techniques to break down plastics into their chemical constituents for reuse.

Dow also recently announced what was called a joint development agreement with Procter & Gamble Co. to use another process called dissolution to process hard-to-recycle plastic packaging into "near-virgin quality" polyethylene.

"To create the new technology, the companies will combine their patented technologies and know-how into the dissolution process. The development program will focus on using dissolution technology to recycle a broad range of plastic materials with a focus on polyethylene and targeting post-household plastic waste," the companies said at the time.

P&G previously licensed technology to PureCycle Technologies Inc. that uses a solvent-based process to clean used polypropylene and create a virgin-like resin at PureCycle's flagship site in Ironton, Ohio.

"The Circulus team is excited to move forward with Dow in advancing a circular economy. Circulus leverages the best technology available to advance the recycling of plastic packaging waste," Circulus CEO Mike Dulin said in a statement.

Dow also launched two new grades to its Revoloop portfolio of recycled resins at the Plastics Recycling Show Europe, held June 19-20 in Amsterdam.

Dow partnered with RKW Group, a Mannheim, Germany-based shrink film manufacturer, to incorporate the post-consumer grades in RKW's My Multipack collation shrink film.

For the first time, the grades include 100 percent and 85 percent post-consumer resin derived from household waste. Up until now, Dow's Revoloop portfolio included grades with a maximum of 70 percent recycled content.

"These grades were really tough to develop because generally when you use household waste as feedstock, grades often have some gel issue, color issues, sometimes other issues," Fabrice Digonnet, mechanical recycling leader EMEA at Dow, told Sustainable Plastics at PRSE. SP is a sister publication to Plastics News.

"The development process was really to look at how, first of all, our suppliers would meet Dow's requirement in terms of quality control, color, cleanliness," Digonnet added. "And second, when formulating the grades we made sure to upgrade the quality so that our converting partner — in this case RKW — is capable of using them as if it was a virgin grade."

RKW incorporated the resin with 100 percent mechanically recycled content in its new shrink film. In that application, the recycled grade is mixed with virgin content on a 70-30 ratio. Of the 70 percent post-consumer content, 35 percent comes from household waste.

"We were positively surprised," said Antony Taing, sales director at RKW. "Usually, as Fabrice said, grades from household waste have a lot of disadvantages. But in this case, the processing went very well, and that's why we are also confident to showcase our new product, we believe that there will be no impact for our customers."

Taing said RKW is seeing increased demand for products with post-consumer (PCR) content.

"The customers have been going through a journey, first with incorporating post-industrial content, and now PCR, partly driven by a sustainability agenda, and partly by EPR fees," he said.

The partners are confident they are not too far from achieving 100 percent PCR content in shrink film applications.

Beatriz Santos, associate editor of Sustainable Plastics, contributed to this report.