Scrap broker Song Lin, left, and his business partner Zhang Yan with discarded plastic barrels at the recycling plant they intend to open in Montezuma, Ga. The barrels, from nearby dairy farms, will be turned into pellets for export to China. Photo: Melissa Golden for The Wall Street Journal
Bob Tita reports for the Wall Street Journal:
Chinese companies are setting up shop in the U.S. to obtain the scrap paper and plastic their government has deemed too dirty to import.
U.S. shipments to China of old cardboard, newspaper and discarded plastic slowed after China this year implemented more-stringent standards on the purity of imported scrap. That change has left Chinese packaging companies and plastics manufacturers short on materials.
Some of them are buying or building plants in the U.S. to manufacture the paper for corrugated boxes, pulp and plastic pellets for which they can’t find enough raw material in China.
Companies including some of China’s biggest paper makers are discovering a glut of cheap recycled material in the U.S.
“Right now, plastic waste is everywhere after China stopped taking it,” said Song Lin, a longtime broker of plastic scrap in the U.S. who is preparing to open a factory in Georgia that will turn discarded plastic into pellets for export to China.
The moves are a boost to the U.S. scrap industry, which collapsed in recent months amid sharply lower exports to China. For now, investors are mostly subsidiaries of Chinese plastic and paper producers, or firms supplying large clients in China, and have experience navigating the logistical and regulatory challenges of exporting to the country.
ND Paper LLC, a unit of China’s Nine Dragons Paper (Holdings) Ltd. , in recent months acquired paper mills in Biron, Wis., and Rumford, Maine, for $175 million from British Columbia-based Catalyst Paper Corp. The firm also bought a pulp mill in Fairmont, W.Va., for $55 million and a pulp mill in Old Town, Maine, this month from OTM Holdings. That mill had been idle since 2015, and ND Paper expects to restart operations early next year.
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