Yes Recycling enters administration two months after official opening

Administrators have given potential buyers until tommorow to bid for a “ground-breaking” recycling plant which collapsed into administration less than two months after its official opening. 

The Yes Recycling plant, in Glenrothes, Fife, co-owned by Morrisons and backed by £1.6m investment from Nestlé, was billed as a “major step forward” in the battle to create a closed loop for hard to recycle plastic and stop tens of thousands of plastic being shipped overseas.

However, its financial troubles have heightened fears that lack of support from cash strapped local councils and poor co-ordination among companies and governments could prove a disaster for industry backed efforts to create a new era for plastic recycling.

The plant opened its doors in September last year with the intention of turning 15,000 tonnes of plastic a year into a form of plastic sheet called Ecosheet but despite the added fanfare of an official opening in February this year, has struggled to attract material and is said to have never operated at full capacity.

Now administrator Grant Thornton is trying to find a buyer for the site, with the Scottish government being urged to step in to support the estimated 60 workers whose jobs have been put at risk.

The Grocer understands the administrator has spoken to “several” interested parties, with a formal deadline for bids tomorrow.

Alongside Morrisons and Nestle, the site had other powerful backers including Zero Waste Scotland and Lloyds Bank but its problems come amid wider questions over the viability of “problematic” plastic recycling schemes.

Pioneering

In February, The Grocer revealed another pioneering scheme by major food companies to set up kerbside collections for thousands of tonnes of plastic has run into difficulty because of the financial squeeze on local authorities.

Several councils that had been lined up to take part in the scheme withdrew despite support from companies including fmcg giants Unilever, Mondelez, Nestlé and PepsiCo, who launched the Flexible Plastics Collection pilot in May last year.

That trial see them working with authorities to ensure the recycling of ‘flexible’ plastics such as plastic bags, confectionery wrappers, foil and plastic film.

The crisis over the future of the Yes plant is being seen as another significant blow to the industry war on plastic.

Julie Tait, restructuring director at Grant Thornton and one of Yes Recycling’s joint administrators, said: “This is a disappointing outcome for all those associated with the company, and our immediate priority is to support the company’s 60 employees while we assess the company’s financial position and seek a buyer for its business and or its assets.”

Tait said the remainder of the Yes Recycling Group, headquartered in Buckinghamshire, is unaffected by the Scottish business going into administration.

The UK government’s company registry showed that at the end of October, Yes Recycling owed creditors £3m.

Morrisons declined to comment.