PET bottle recycler CarbonLite Holdings LLC announced March 8 that it’s filed for Chapter 11 bankruptcy, citing economic fallout from the COVID-19 pandemic.
The Los Angeles-based company, which calls itself the world’s largest producer of post-consumer PET resin, said in a statement the filing covers the company’s three production plants in California, Texas and Pennsylvania, as well as its PinnPack Packaging subsidiary in California.
“Pressures directly related to the coronavirus pandemic contributed to CarbonLite's decision to reorganize,” the company said. “This included temporary production slow-downs caused by employee illness, the low price of virgin plastic relative to rPET [recycled PET], and a nine-month delay in the grand opening of the company's new Pennsylvania facility caused by travel restrictions that held up equipment commissioning by European manufacturers.”
The company said its business operations will continue without interruption, that there will be “no stoppage” of supply to customers and that “layoffs are not under consideration.”
The firm is getting ready to have an opening ceremony next month for the Pennsylvania plant, an $80 million facility outside Reading.
In an early 2020 interview, CEO Leon Farahnik said the company was also considering a similar $80 million investment for a recycling plant in Florida, to meet increased demand from consumer product makers including Coca-Cola Co, Nestle Waters North America and PepsiCo Inc.
The company said it had incurred heavy capital expenses with a recent expansion of its Dallas plant and building the new 270,000 square foot Pennsylvania plant. That latest facility started operating in October, with robotic systems, and is the world’s largest standalone bottle-to-bottle recycling plant in the world, the company said.
"We've chosen to take this necessary step during a time of unprecedented challenge and expect to emerge from reorganization even more strongly positioned for the future," Farahnik said. "Our customers, all of whom have steadily increased their commitments to the use of recycled plastic in their products, have expressed confidence in this process and our carefully considered decision."
The company opened its first plant, in Riverside, Calif., in 2012. It said it filed the petition in the U.S. Bankruptcy Court in Delaware.