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LyondellBasell Industries N.V. LYB and AFA Nord, a prominent agricultural film recycler, have agreed to form a 50:50 joint venture to recycle post-commercial flexible secondary packaging waste.
LMF Nord GmbH, the joint venture company, intends to construct a mechanical recycling plant in Northern Germany to convert Linear Low Density Polyethylene (LLDPE) and Low Density Polyethylene (LDPE) waste into quality recycled plastic materials for use in flexible packaging. Production is scheduled to begin in early 2025. The feedstock for LMF Nord GmbH will be supplied by TM Recycling GmbH, a sister company of AFA Nord.
This joint venture will supply recycled LDPE and LLDPE materials and complement the CirculenRecover line of high-density polyethylene and polypropylene products currently offered by the company. As part of its integrated hub strategy, which involves investing upstream to offer feedstock from diverse plastic waste streams, it advances the company's efforts in advanced recycling. The company maintains its position as customers' preferred partner owing to its effective range of products.
The new recycling facility is anticipated to generate 26,000 tons of recycled LDPE and LLDPE grades annually, which LyondellBasell will market under its CirculenRecover family of materials for usage in a range of applications, from stretch films to collation shrink films. The CirculenRecover product line consists of a variety of mechanically recycled materials that are currently employed in a variety of applications, from electrical equipment to suitcases and detergents for laundry bottles.
Shares of LyondellBasell have gained 1.2% over the past year compared with a 8.9% rise of its industry.
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The company, on its first-quarter call, said that it anticipates a slight increase in global demand driven by usual seasonal trends. The demand for transportation fuels is expected to increase over the summer, supporting oxyfuels and refining margins. Delays at the beginning of industry-wide capacity expansions for polyethylene in North America are likely to lower new market supply and support polyethylene margins.
In order to keep pace with the market expectation, LyondellBasell estimates operating Intermediates & Derivatives assets at 80%. It expects to modestly raise global olefins and polyolefins operating rates to 85%. The company will continue to monitor the impact on petrochemical markets in the second half of 2023 of shifting global monetary policies and strengthening economic conditions in China.