Berry targets high-quality PCR supply with Georgia-Pacific Recycling collaboration

03 Feb 2020 --- Rigid and flexible plastic packaging supplier Berry has announced a formal agreement with US-based Georgia-Pacific Recycling to create a closed-loop system to recover, segregate and reprocess post-consumer resin (PCR). The collaboration comes as the US supplier reports solid Q1 2020 results, including net sales of US$2.8 billion, a 43 percent increase on Q4 2019. Berry has also moved to prioritize the production of nonwoven healthcare products in its Nanhai, China and Suzhou, China facilities, to aid in Coronavirus protection.

Through the Berry-Georgia-Pacific Recycling agreement, the companies will partner across the multiple steps of the material supply chain to create a stream of PCR, which is not only reliable but high-quality to supplement or displace virgin resin in specific applications.

Georgia-Pacific Recycling will use its national network of recycled material suppliers and logistics providers to procure and transport the post-consumer plastic material to be recycled. Berry will reprocess the plastic material to incorporate into its broad portfolio of polyethylene film and polypropylene products.

“As the demand for PCR continues to increase, it is critical that we find ways to supplement the market of recycled content through multiple methods, be it mechanical recycling, chemical recycling, or other methods and processes,” notes Tom Salmon, Chairman and CEO of Berry Global. “We are excited to recover these PE films that we manufacture and give them a second life, providing not only a recycling solution for our customers but also a stream of recycled content for them.”

Berry achieved record net sales and operating EBITDA for any December quarterly period in the company’s history.In November, Berry and global chemical industry leader SABIC announced a collaboration to drive the innovation and use of polyolefin resins made from chemical recycling.

“With nearly 50 years of experience in the recycling industry, our business continues to grow and evolve as the market now rapidly changes,” adds Marc Forman, President of Georgia-Pacific Recycling. “This partnership with Berry exemplifies our ability to provide nationwide recycling solutions for plastic, paper, and metals. Partnering with suppliers and producers helps us collaboratively meet the growing demands of consumers and society for increased use of recycled material.”

The companies plan to begin material collection in Q1 2020 and will begin reprocessing in Q2 2020.

To establish a circular economy for its plastics packaging, Berry also announced in October that it will begin manufacturing plastic packaging containing Digimarc Barcodes as a collaborator in the new recycling initiative, HolyGrail 2.0.

Solid Q1 2020 results
Berry has reported solid Q1 2020 results. In comparison to Q4 2019, net sales were up 43 percent to US$2.8 billion, operating income was up 13 percent to US$199 million and operation EBITDA was up 36 percent to US$451 million.

The net sale increase included revenue from the acquisition of RPC of US$1,080 million and continued positive organic volumes in our North American Consumer Packaging business. These positives were partially offset by lower selling prices of US$183 million due to the pass-through of lower resin costs and the divested sales of the Seal for Life (SFL) business of US$28 million.

The operating income increase included contributions from the RPC acquisition of US$45 million, synergy realization and organic earnings growth in our North American Consumer Packaging segment. These improvements were partially offset by expected unfavorable price cost spread of US$20 million, Berry says, primarily in its Engineered Materials and Health, Hygiene & Specialties segments, along with the sale of our SFL business.

“During the quarter we achieved record net sales and operating EBITDA for any December quarterly period in the company’s history. Overall, our results and organic growth progression were consistent with our expectations. I am pleased by the continued performance of our North American Consumer Packaging division, delivering its seventh consecutive quarter of positive organic volume growth, recording 3 percent volume growth in this December quarter,” comments Salmon.Berry is experiencing increased demand for face masks, N95 respirators and protective apparel as a result of the Coronavirus outbreak.

“Additionally, both our Health, Hygiene & Specialties and Engineered Materials divisions reported sequential volume improvement as expected. Our Consumer Packaging International segment has gotten off to a solid start, with cost synergy realization on plan and commercial activities to drive long-term growth, well underway. The integration of RPC continues to move forward and our synergy targets remain on track.”

Combatting Coronavirus
In response to questions from the investment community on its recent quarterly call, Berry indicated that it is prioritizing the production of nonwoven healthcare products in its Nanhai, China and Suzhou, China facilities, which are used to manufacture products that can help protect against airborne particles like the Coronavirus.

Nonwoven materials produced at the facilities are used in face masks, N95 respirators and protective apparel, all of which have recently been in high demand in the plan to prevent the spread of not only the Coronavirus, but also other communicable diseases.

“Our thoughts go out to those affected by the Coronavirus. Our dedicated teams are working around the clock to manufacture as much of these materials as possible to help prevent the spread of the virus,” explains Curt Begle, President of Berry’s Health, Hygiene and Specialties Division.

By Joshua Poole