By Ron Shinn
Advanced Drainage Systems Inc. (ADS) has become North America’s largest recycler but has an ambitious goal to grow much bigger in order to have more reprocessed material for its own products.
ADS, based in Hilliard, Ohio, has recycling plants in North and South America. In December, it acquired privately owned Jet Polymer Recycling, based in Fort Payne, Alabama, which included three plants in Alabama and Georgia with capacity to recycle about 100 million pounds a year.
With the acquisition, publicly owned ADS now recycles about 650 million pounds of high-density polyethylene (HDPE) and polypropylene (PP) a year. The goal is to use 1 billion pounds of recycled resin annually by 2031.
“It is an ambitious goal, but our team thinks we can do it,” said Nicole Voss, director of sustainability at ADS. “At this point, we are tracking a little ahead of our plan.” The growth will come from expanding in-house recycling and possibly from additional acquisitions, she said.
ADS both reprocesses baled material in-house and buys ready-to-use HDPE pellets and flake from recyclers. The resin is used in its water-management products, including pipe and stormwater collection and storage products as well as on-site septic system products.
In its most recent Sustainability Report for fiscal 2021, which ended March 31, 2021, ADS reported it purchased 510 million pounds of recycled plastics. Overall, 47 percent of the resin ADS used in 2021 was recycled and 53 percent was virgin. That was down from 51 percent recycled resin used the previous year. Voss attributed the reduction to lack of availability of recycled material and lower prices for virgin resin.
ADS is believed to be the biggest user of recycled plastic in North America as well as the biggest recycler.
In its most recent earnings report released in May for the year ending March 31, 2022, ADS reported it purchased more than 1.3 billion pounds of resin but did not break down recycled vs. virgin. The company reported net sales of $2.8 billion, up 39.7 percent from a year earlier, and net income of $275 million, up from $226.1 million a year earlier.
ADS Recycling is the company’s vertically integrated in-house recycling operation.
ADS, founded in 1966, started buying recycled resin for its products more than 20 years ago to reduce overall resin costs, but the company did not talk much about it.
The company also started in-house recycling more than 20 years ago to guarantee availability and quality of recycled resin.
Using recycled material is now a selling point as companies and governments adopt green principles and look for sustainable products.
In fiscal 2021, ADS estimated 66 percent of pipe revenue derived from re-manufactured products.
ADS uses both post-consumer and post-industrial material. Exact percentages were not available.
ADS sources recycled material from more than 500 suppliers in North America. “Our internal reprocessing capability meets a little over half of our demand,” Voss said. “For the rest, we buy recycled pellets or flake from other recyclers. We are always working really hard to forge new partnerships for recycled content.”
She said ADS frequently reminds suppliers that it is taking a single-use plastic jug that has a one-year lifespan and a 28 percent chance of hitting the recycling stream on average and turning it into a product with a lifespan of 50 years to 100 years that is fully recyclable at the end of that life. “It is a real story – that the material is going into a durable product that is helping alleviate stormwater concerns and address climate change issues,” Voss said.
ADS will not likely try to ramp up in-house reprocessing enough to meet its total demand for material, so it will continue buying reprocessed material. “We will expand our internal recycling and as more pellets come available, we will purchase them as well,” Voss said. “We think those are going to grow in tandem.
“It works well the way it is now with buying a portion of it already reprocessed,” she said.
To meet the 1 billion pounds per year goal, ADS plans to recycle more PP, is considering ways to use HDPE that contains fiber or even metal and may purchase certified recycled material derived from pyrolysis.
“We will have to see how the pyrolysis market plays out, so I don’t know yet,” Voss said. “We prefer mechanically recycled material because there is less impact on the environment, but if we cannot get to our goal because of a lack of mechanically recycled material, we will look at other options.”
The possibility of sourcing material that contains fiber or metal is an interesting concept for ADS because these materials fall into the “hard-to-recycle” category.
“Recycling this material is something we would never tackle on our own, but if other companies have the capability and know-how, we might partner with them,” she said.
PP is also often considered difficult to recycle and Voss said ADS is trying to show MRF operators it has value. “We are trying to show them that there is value if they sort PP out,” she said. “We are really pushing for that.”
ADS joined The Recycling Partnership’s PP coalition, which is looking for ways to capture PP for mechanical recycling. “Capturing this valuable material and not letting it just get processed back to a monomer is important,” she said. “If you can mechanically recycle a plastic, there are less greenhouse gas emissions than if it were coming from virgin material.”
ADS has also partnered with Cyclyx International, which is trying to source and prepare low-value scrap plastics for chemical recycling. Cyclyx was founded by Agilyx and ExxonMobil Chemical.
“Exxon is looking at it from a chemical recycling standpoint, but I think they also want to make sure they are not taking the easily mechanical recycled parts of their stream through a chemical pyrolysis process,” Voss said. “That is counterintuitive. It takes more energy. That is not the best way to do it.”
ADS is also active in the U.S. Environmental Protection Agency’s America Recycles Pledge to address challenges to the recycling system.
The decision to use recycled resin and then start in-house recycling were business decisions, but ADS has a strong ethos to be a sustainable company. The company is active in organizations that promote diverting plastic from landfills and supports local community projects to increase recycling.
“One of the pillars of our company is recycling,” Voss said. “Some of that is self-serving because we want more plastic to recycle. But increasing the recycling rate and adopting circular economy practices are the right things to do.”
The company’s most recent sustainability report points out that “Our experience in incorporating recycled materials into our products has fundamentally changed – and ultimately shaped – our approach to environmental stewardship and the way the industry views and uses recycled plastic in construction projects.”
Voss said recycling has also become a focus for investors. “Our board asks what are we doing to be a sustainable company,” she said. “We recycle more than a half-billion pounds of plastic a year. That’s huge. That is a lot of plastic we are keeping out of landfills.”
Ron Shinn, editor
