The Only Plastic Bottle Recycling Plant in Israel Is On Verge of Shutdown

SEATTLE (Scrap Monster): The plunge in raw plastics prices and the inability to compete with significantly lower production costs overseas is feared to lead to closure of Israel’s only remaining plastic bottle recycling plant. Aviv Recycling Industries, which operates the plant in the eco-industrial park of Neot Hovav, southern Israel, noted that it would not be able to survive anymore without government assistance.

The plant has been in operation for around 25 years, accepting plastic bottles collected for recycling. The recycling plant used to grind these plastic bottles into pellets, which were used as raw materials for manufacture of new products. The plant has already laid off 30 of its 70 workers and has also cut the total number of workdays per week to three. Under the challenging market conditions that exist today, the plant is under severe threat. The situation is likely to lead to permanent closure of Israel’s only plastic bottle recycling plant, which in turn will result in job losses too.

Incidentally, Israel has been exporting more quantities of plastic bottles to Turkey for processing. According to Yaron Mizrahi, the factory’s director, it is very difficult to compete with facilities in Turkey where labor costs are very cheap when compared with Israel. Moreover, unlike Israel, Turkey doesn’t have tight environmental restrictions, thus resulting in lower input costs for recycling facilities in that country. The huge drop in prices of raw plastic has also impacted the plant’s profitability, Mizrahi noted. The plant is currently surviving only at the mercy of The Ela Recycling Corporation, which has agreed to offer reduced prices for the bottles that it sells to the plant.

The company stated that it had been in talks with various government departments for more than two years, but in vain. The move to release the cleanup fund money under the Environmental Protection Ministry to support the factory was turned down due to political opposition. The Knesset Economics Committee which met recently had called for support from the ministries of finance, economy and industry and environmental protection. The Committee had also recommended that the fund managed by Economy Ministry for industries in financial crisis could also be utilized to prevent the plant from being closed.

Meantime, Finance Ministry sources indicate that the offer made by it for an investment grant to improve the assembly line was turned down by the company.

Israel has been among the leading plastic bottle recyclers in the world. As per latest data, Israel recycled 61% of its plastic bottles in 2015. The country’s recycling rate stood higher than Europe (59%) and the US (30.1%). The recycling rate had reported 2% jump during the year.