Plastic bag recycler Plasrecycle goes into administration
London-based recycling operation backed by WRAP appoints administrators EY to lead search for new buyer
London-based plastic bag recycling business Plasrecycle is seeking a new buyer after entering administration late last week.
The firm, which has operated a £12m recycling plant in Woolwich, South East London since 2013, is backed by green investors including waste advisory body WRAP, the London Waste and Recycling Board and the Foresight Environmental Fund.
According to a statement from administrators EY, Plasrecycle was forced to call in administrators after it effectively “ran out of cash”.
“The company was seeking additional investment of £6m to improve efficiencies and increase capacity,” EY said. “However, due to the extent of the ongoing losses at the lower levels of production and the level of existing debt used to fund the start-up losses, it was not possible to obtain this investment and the company effectively ran out of cash.”
However, EY said the firm still has “all the fundamentals to be a significantly profitable business”.
Plasrecycle’s plant is able to process 20,000 tonnes of plastic waste every year from retailers, waste management firms and local authorities – equivalent to more than 2.5 billion plastic bags. The waste material is processed to create a plastic granulate for black bin bags, plastic bags and damp proof membranes.
Some 20 members of staff have been made redundant, with the remaining 16 employees staying on to manage the conversion of the plant’s remaining stock while a buyer is sought.
EY said it is seeking expressions of interest and hopes to conclude a swift sale before production ceases.