Two months after its opening, Yes Recycling goes into administration. Potential purchasers have till tomorrow to submit bids for a “ground-breaking” recycling facility that went into administration less than two months after it had been inaugurated.
The Glenrothes, Fife, Yes Recycling facility, co-owned by Morrisons and supported by a £1.6 million investment from Nestlé, was hailed as a “major step forward” in the fight to develop a closed loop for difficult-to-recycle plastic and stop the export of tens of thousands of plastic bottles.
However, its financial difficulties have heightened concerns that industry-backed efforts to usher in a new era for plastic recycling could fail due to a lack of support from cash-strapped local councils and poor coordination among businesses and governments
In order to produce Ecosheet, a type of plastic sheet, the plant first opened its doors in September of last year. However, despite the added fanfare of an official opening in February of this year, it has reportedly never operated at full capacity and has struggled to attract material.
The Scottish government is being urged to intervene to help the estimated 60 employees whose jobs are in jeopardy as administrator Grant Thornton seeks a buyer for the property.
Administrator has spoken to “several” interested parties
The site received strong backing from Morrisons, Nestle, Zero Waste Scotland, and Lloyds Bank, but its issues are part of a larger debate over the profitability of “problematic” plastic recycling programmes.
The Grocer reported in February that another innovative plan by large food firms to set up kerbside collections for thousands of tonnes of plastic has run into trouble because of the tight budgets faced by local governments.
Despite backing from businesses including FMCG behemoths Unilever, Mondelez, Nestlé, and PepsiCo, who launched the Flexible Plastics Collection trial in May of last year, some councils that had been set up to participate withdrew.
In that trial, they cooperated with the government to ensure that “flexible” plastics, such as plastic bags, candy wrappers, foil, and plastic film, were recycled.
Another major setback in the industry’s fight against plastic is thought to have been dealt by the crisis surrounding the Yes plant’s future.
“This is a disappointing outcome for all those associated with the company,” said Julie Tait, restructuring director at Grant Thornton and one of Yes Recycling’s joint administrators. “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.”
According to Tait, the administration of the Scottish company has no impact on the remaining members of the Yes Recycling Group, which has its headquarters in Buckinghamshire.
Yes Recycling owes creditors £3 million as of the end of October, according to the UK government’s corporate registry.
With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.