UK-based plastic recycler Viridor, owned by US investment company KKR, announced it is shutting down operations at its plastics mechanical recycling facility in Avonmouth, a suburb of Bristol in the United Kingdom.
The announcement comes just two years after Viridor opened the facility in March 2022.
The Avonmouth Resource Recovery Centre has a capacity of over 80,000 tones a year and it co-locates plastic reprocessing and energy recovering through waste incineration. Viridor said it would exit mechanical recycling operations at Avonmouth, but did not mention the future of the energy recovering operations.
The plant employs around 125 people and required a GBP 317 million investment.
In January 2023, Viridor also shut down operations at its polymer recycling facility in Skelmersdale, a town in the north of England. At the time, the company said its decision followed the commissioning and ‘increasing performance’ at Avonmouth.
Viridor said it is conducting a separate review of its plastic recycling site at Rochester in Kent. Its website no longer contains any information about the plant.
The company said in a statement that its mechanical recycling operations have been negatively impacted by a combination of challenging market conditions and lack of policy support to increase plastic recycling rates in the UK. The UK has set a 50% plastic packaging recycling goal by 2025, which it has already met in 2023.
“Despite sustained investment from Viridor over the last four years to develop its mechanical recycling capability, including building and commissioning the Avonmouth polymers recycling facility and expanding production, recycling rates are below where they were projected to be in 2020. Policies announced and planned under the previous Government to increase UK recycling, as set out in the 2018 Resources and Waste Strategy, have been repeatedly delayed and have not, to date, been implemented,” Viridor said in a statement.
The UK-based recycler also said that reduced demand, low prices for recycled polymers, and competition with cheap virgin and imported materials has exacerbated its poor economic situation.
“The significant delay in implementing these policies, combined with reduced demand for recycled plastic and packaging products from the consumer goods sector, have had a material impact on the financial viability of Viridor’s UK mechanical recycling operations. This has been exacerbated by broader market conditions; the global virgin polymer market is suffering from overcapacity due to significant growth in production in lower-cost markets outside Europe, leading to significantly reduced demand and prices for recycled plastics. At the same time, imported recycled plastics from low-cost countries has increasingly flowed into Europe displacing domestic supply. The combination of these pressures has resulted in today's decision,” the company concluded.
Viriador described its decision as ‘difficult’ and added that the proposed closure of Avonmouth will be subject to the usual consultation process. It is currently exploring redeployment opportunities within the wider business for employees impacted by its decision.
The company said it remains committed to plastics recycling through its chemical recycling subsidiary Quantafuel, which it acquired in 2023. Last week, the UK government announced it will count mass balanced materials towards recycled content.
Viridor Group posted a profit of GBP 153.6 million in 2024, compared to GBP 167.2 million in 2023. The company’s 2023/2024 report says that Avonmouth Polymers posted an impairment charge of GBP 1.6 million in 2024 and GBP 13.3 million in 2023.