Chinese recyclers battle for bottles in Japan’s plastic market
Surging demand sees prices of used containers double over last 12 months
FUKUOKA — Discarded plastic bottles are so ubiquitous that it’s difficult to imagine Lin Qi Qian’s problem: He can’t source enough of the waste to keep his recycling factory running at full capacity.
President of Chinese-owned recycler Dafa Japan, Lin says the company’s 29,000-sq.-meter facility in Fukuoka, on Japan’s southern island of Kyushu, can recycle 5,000 tons of bottles monthly but is currently handling only 2,000.
“Our site used to be overflowing with bottles, but not now. We have plenty of room for more,” Lin said, adding that the high quality of Japanese bottles makes them easy to process, hence their popularity with recyclers.
Since China banned plastic waste imports in 2017, the country’s recyclers have scrambled to get their hands on the around 600,000 tons of bottles that Japanese discard each year, with several companies setting up recycling facilities in Japan.
“The battle for Japan’s … plastic bottle waste will start soon,” said Sun Ziqiang, the Chinese president of Japanese recycler Asei.
“The amount of plastic suitable for recycling is limited,” he said, noting that the surge in investment had also resulted in a doubling of the price of used bottles over the past year to around $0.32 per kilogram.
Asei, which closed its recycling factory near Shanghai in 2018, has relocated to Japan, investing $6.4 million in two plants near Tokyo. They are expected to start full-scale operation later this year with a combined monthly output of 1,500 tons.
Japanese companies such as Daiei Kankyo Holdings are also increasing efforts to carve out a larger share of the plastic recycling market. The group expects to double production capacity with the opening of a new $13.8 million plant in Osaka Prefecture next year.
“This is not a rubbish dump, this is a resource for us,” said Lin, pointing to a pile of plastic bottles weighing several tons at the Fukuoka plant.
In addition to the $9.2 million Dafa Japan has invested in Fukuoka, Lin said the company has also spent $18.4 million on two other facilities in Saitama Prefecture near Tokyo. The plants will be able to handle a combined total of 8,000 tons a month. Plans are in the works for a fourth facility in south-central Japan.
The recycling process starts by removing foreign objects such as metal or cigarette butts, after which the bottles are washed, dried and shredded. Bottle caps are cut into small pieces then separated by color.
“We turn the bottles into plastic flake, which we sell for about 80 yen ($0.74) per kilogram,” said Lin.
A subsidiary of Ningbo Dafa Chemical Fiber, China’s largest fiber producer, Dafa Japan ships roughly 60% its flake to China, where it is spun into fiber and distributed to clients such as fast-fashion retailer Uniqlo and Ikea, the world’s largest seller of home furniture and accessories.
To offset the rising cost of plastic bottles, Lin said the company was also trying to ramp up production of more profitable plastic pellets, which have wider usage compared to plastic flake because they are easier to mold.
A potentially devastating problem for plastic recyclers in Japan is the chronic labor shortage. While the country has relaxed work visa requirements for 14 different job categories, the recycling industry, which employs about 630,000 people, has been overlooked.
The issue, says Asei president Sun, stems from the industry’s lack of lobbying clout, as most Japanese recyclers are small- to medium-size operations.
“The recycling industry needs to form alliances with major companies to deal with pressing issues, including the labor shortage,” Sun said.