Novolex cites increased demand in film recycling expansion

Novolex Holdings Inc. is spending $10 million to substantially increase plastic film recycling at a company facility in Indiana.

Additional output created by the project in North Vernon, Ind., will be used internally by the company to make new products, including bags and can liners.

"As technology has improved, we're seeing this as the right time to apply new technologies that will allow us to do much more in North Vernon," said Vice President of Public Affairs Phil Rozenski in an interview. "It's all new capacity. It's going to be a two-phase investment. Some of the equipment will start going in this fall, almost immediately."

"We're going to start with increasing extrusion capacity immediately. Then we will be adding new sorting technologies, which will help us to take on a more diverse spectrum of film and bag," he said. The new sorting equipment is expected to be installed in 2023.

Novolex is adding 28 million pounds of new recycling capacity to its existing 49 million pounds of annual recycled content production. That's a 57 percent increase. The company expects a dramatic increase in the use of post-consumer resin through the new project.

"We will use the material at Novolex. A portion of it will be used on site with bag production. And we will also be able to railhead it out to other Novolex facilities around the country. So we will be the consumer of the material. We're seeing an increased demand with our customers, and this will help us meet that demand," Rozenski said.

"Some of the demand is being driven by regulation. Some of the demand is driven by increased awareness of sustainability," he said.

Novolex, which expects to add 14 to 16 jobs once the expansion is complete, estimates the new equipment will consume up to 40 million pounds of used PE film to create the 28 million pounds of recycled resin pellets. Feedstock includes bags, pallet wrap and agricultural film.

"The technology will reduce waste and provide much-needed recycled content that we will be able to use in our products," Novolex CEO Stan Bikulege said in an announcement about the project. "The expansion will create jobs for the community and enable us to develop innovative packaging solutions for our customers."

Hartsville, S.C.-based Novolex has 10,000 employees at 57 plants in North America and Europe. North Vernon is one of two film recycling centers.

Novolex, a diverse packaging manufacturer, gained a new majority owner earlier this year when private equity firm Apollo Global Management Inc. took a majority stake in the firm from Carlyle Group kept a minority portion.

Novolex makes a variety of plastic bags through its Hilex Poly division that touch the everyday lives of consumers, including so-called T-shirt retail bags, produce bags and specialty products such as ice bags.

Other business units include Heritage Bag, a maker of institutional garbage can liners and medical waste bags. Novolex also operates Waddington Group, a thermoformed packaging maker that has operations in both North America and Europe.

Novolex is No. 9 in the new Plastics News ranking of North American thermoformers with an estimated $500 million in annual sales for the region. It ranks as No. 6 among film makers in North America with $1.5 billion in annual sales.