CarbonLite files for bankruptcy protection

CarbonLite Holdings LLC, the world’s largest recycler of plastic beverage bottles, has filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the United States.

The filing pertains to all three of the company’s facilities, in California, Texas and Pennsylvania, as well as to its California subsidiary, PinnPack Packaging.

Production at all these facilities will continue as usual without interruption, as will payment of all employees. Layoffs are not under consideration. There will be no stoppage of supply to CarbonLite’s customers during the reorganization period.  

Pandemic pressures

Pressures directly related to the coronavirus pandemic contributed to CarbonLite’s decision to reorganize. This included temporary production slow-downs caused by employee illness, the low price of virgin plastic relative to rPET, and a nine-month delay in the grand opening of the company’s new Pennsylvania facility caused by travel restrictions that held up equipment commissioning by European manufacturers. 

“We’ve chosen to take this necessary step during a time of unprecedented challenge and expect to emerge from reorganization even more strongly positioned for the future,” said CarbonLite Recycling CEO Leon Farahnik.

“Our customers, all of whom have steadily increased their commitments to the use of recycled plastic in their products, have expressed confidence in this process and our carefully considered decision.” 

Advanced robotics

CarbonLite has also incurred heavy capital expenditures for the recent expansion of its Dallas facility and construction of its 270,000 square-foot plant in Reading, Pennsylvania, which launched limited production in October 2020. This plant is outfitted with advanced robotic systems and is the largest standalone bottle-to-bottle recycling facility in the world. Its grand opening is planned for this spring. 

The company says it also plans to renegotiate contracts with customers.

CarbonLite Recycling supplies all major beverage companies in North America including Coca-Cola, Nestle Waters North America, PepsiCo and other global beverage brands. It opened its first plant in Riverside, Calif., in 2012, followed by plants in Dallas and Reading, Penn. When the Reading plant is fully operational, CarbonLite will recycle over seven billion plastic bottles annually. CarbonLite is a signatory to the Ellen MacArthur Foundation’s global commitment to a circular economy.