Vecoplan, the Germany headquartered manufacturer of machines and systems for the recycling industry, has defied odds in 2023. In a year that was tough for a lot of recyclers, Vecoplan saw record revenue and profit.
“We can once again report a record year in 2023, with revenue reaching a new high,” said Werner Berens, CEO of Vecoplan.
Like many others, the company acknowledged its customers were, and continue to be, unsettled by the geopolitical situation and the tense global market, with many postponing investments. On the show floor at Fakuma 2023, for example, there were some reports of double-digit percentage drops in sales for recycling machinery.
Recycled polymer prices were under severe downward pressure for most of 2023 and 2022 because of persistent weak demand, competition from the falling cost of virgin plastics, and cheaper imports from Asia. Industry bodies warned of plant closures, and recyclers like Umincorp did end up declaring bankruptcy.
“Despite the challenges this presents for us in order intake, we were able to slightly increase both revenue and profit compared to 2022,” said Vecoplan’s CFO Ina Hannen.
As for 2024, Berens said Vecoplan is ‘planning more cautiously’.
The weak market conditions of the last couple of years have been predicted to lead to market consolidation in 2024. S&P Global expects lack of cost-competitiveness with virgin resin will remain an ‘underpinning trend’ in the first semester of the 2024, forecasting that consumption will mostly be directed at ‘more economical items’.
For companies that made it through the first quarter of 2024, there are reasons for optimism as they can take advantage of the expected seasonal pickup in demand from the second quarter 2024 onwards.
“The continued high demand for our products and solutions gives us cause for optimism,” Berens said.
Vecoplan expanded its workforce by nearly 100 new employees between 2022 and 2023. In 2024, it is planning a €13 million investment to expand capacity at its production site in Bad Marienberg, Westerwald.