Recycled plastic packaging will ultimately play a key role in the future of reusables.
St. Louis, MO – Cabka recently hosted an educational event and plant tour to celebrate the reopening of its St. Louis facility, devastated by a flood almost a year ago. Cabka’s Event on Circular Economy and Business Transformation included presentations by Cabka executives and also featured a round table session of industry experts. This is the first of a three-part report.
Devasted by flood: turning a problem into an opportunity
One of the key messages throughout the day was how Cabka had used the tragedy as an opportunity to improve its St. Louis operation. The reset allowed it to improve operations and eliminate bad habits. And now, thanks to the infusion of new equipment, the average age of the plant production lines is down from 13 years to just two.
Luckily, the company already had new production lines on order at the time of the flood, which helped accelerate the recovery. “Luck comes when opportunity meets preparation,” observed Steve Russell, Cabka VP of Sales and Marketing.
“We’re excited to celebrate this event,” Russell said. “And I really truly thank you not just for attending, but for being there and being patient with us, putting up with some of our delays, the challenges we caused you, your customers’ frustrations, your operational frustrations. From the bottom of our heart, we really thank you for being here.”
Forces at play shaping the future of plastic packaging
Tim Litjens, Cabka CEO, remarked that various forces at play are driving the future of plastic packaging. “We have, of course, corporates that are pushing their sustainability agenda that not just in Europe,” he said. “We see a lot of that now in the United States as well. We also have consumer preferences, pivoting towards more sustainable packaging.”
“We also have legislation changing and a set that’s not just in Europe,” he added, noting mandatory recycled content legislation taking effect in that continent. He also noted the growing importance of ESG initiatives. “There’s a whole lot coming at us,” he continued. “We’re starting to see that now here in the United States as well. And the question is, what is that eventually going to do to us as an industry?”
Recycled plastic packaging: a growing demand for recycled content will be “inevitable”
He reflected on the dramatic change in the marketplace from last year, when prices for both recycled and virgin material were through the roof. “And 12 months later, the market is upside down,” Litjens remarked. “Almost nobody is buying recycled plastics, because virgin is dirt cheap. At the same time, I think we need to start looking ahead.” Based on the trends he mentioned, he believes over the next five or ten years, that a growing demand for recycled content products will be inevitable.
“Today, especially if you’re after some of the bigger contracts, you’ll always have somebody representing the sustainability department of your customer,” Litjens said. “And if you do not tick that box, doesn’t matter how good your price is, doesn’t matter how good your product is, you’re not going to sell. So, of course, every sale still primarily happens on the right economics. But if you do not take the sustainability box, it will not fly. And this is something that has really caught good traction over the last couple of years.”
For Cabka, over 85% of its material consumption is recycled content. It translates into roughly 250 million pounds of plastic waste diverted annually. It is a powerful sustainability story. While the current low prices of plastic resins have dampened demand, the longer-term use case for recycled content is extremely strong and will be critical to helping companies achieve their reuse aspirations.