Plastics company expands recycling capacity

The company is moving into a 20,000 sq ft building, close to its current 11,000 sq ft premises in Sherburn in Elmet, near Leeds, at the end of the year, to cope with increased demand for its services.

Cromwell, which was established in 1983, runs a thriving recycling division, recovering used packaging for both its own use and for its production partners. The recycling side of the business has seen 40 per cent growth in the past year.

The company also produces a range of refuse sacks, bags and other waste management products.

The move for the recycling division comes after the company expanded its production warehouse and office facilities after receiving a £1m commercial loan from HSBC.

Its new 30,000 sq ft premises in Sherburn Enterprise Park allow it to accommodate 3,000 pallets, up from 2,000 on the previous site.

James Lee, managing director of Cromwell, said: “We were at full capacity with more stock than we could cope with.”

The move coincided with the company winning an exclusive sales and distribution agreement to develop biodegradable plastic products with China’s biggest modifier of plastics.

The agreement sees Kingfa helping Cromwell to develop biodegradable and compostable food waste sacks, which it aims to sell to local authorities for household waste.

Cromwell has so far committed over £40,000 in the product’s research and development. Mr Lee said sales of the bags would add about £500,000 to its £9m turnover this year, a figure which is expected to double to £1m in 2012.

The European Landfill Directive is driving the growth.

“The UK still has to meet its biodegradable waste to landfill target of 35 per cent of 1995 levels by 2020,” Mr Lee said.

“The European Commission has stated that it plans to review these targets to phase out biodegradable waste to landfill altogether from 2020-2025.”

He added: “Food waste collection is such a large part of what goes to landfill so it needs to be treated separately.

“We have separated glass and paper from household waste and there have been some challenges with plastics. However, the next big one is food and people will need some sort of receptacle to store and collect that food waste.”

Cromwell’s turnover has more than doubled from £4m in 2001. It is expected to grow by a further 10 per cent in 2011.

The company helps companies to identify recyclables and separates from their waste stream.

The recycling division collects waste packaging, including polythene film, bags, covers, and various types of hard plastic containers, from 150 companies in a wide range of industries from food and pharmaceuticals to retail and agriculture.

The recycled material is then used to produce specialist waste sacks and other products which it supplies to over 500 clients in six markets: local authority, waste management, janitorial and facilities management, healthcare, automotive and industrial.

Sales staff are divided into teams which specialise in these sectors.

Another growth area is plastic gloves. “It’s something we have identified that most of our customers buy,” said Mr Lee. “It’s an easy add-on product for our existing customers and we expect that to add about £500,000 to our turnover this year.”

In 2009, Cromwell started exporting used packaging. It now ships the packaging to Eastern Europe and China where it is recycled and then shipped back and sold to customers in the UK.

Export sales account for 80 per cent of the total 5,500 tonnes of waste recovered and about 10 per cent of total company turnover.

In addition, the company exports its products to Denmark, New Zealand and Ireland.

Cromwell, which employs 30 staff, has seen year-on-year growth in export sales of 50 per cent.

“Two years ago we realised we needed to get into the export market and this area has been a big growth area for us,” said Mr Lee.

The waste recycling market has continued to grow during the recession and economic downturn, enabling Cromwell to expand.

“We are fortunate in that we are not selling luxury goods,” said Mr Lee. “We are at the dirty end of the market with waste sacks and it’s something that people continue to need.”

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