Veolia, the France-based group specialized in what it calls ‘optimized resource management’, has completed the purchase of the Dutch recycler and compounder AKG Kunststof Groep. The acquisition is Veolia’s next step in the pursuit of its goal to further expand its presence in the raw recycled materials market. But why AKG?

AKG, which operates out of Vroomshoop (the Netherlands), is a custom manufacturer of a broad assortment of high-quality polypropylene (PP) recyclates, which are sold to plastics processors. The company sources as raw materials either pre-processed plastic flakes with a high PP content, mainly derived from commercial, industrial or household waste or PP production scraps, collected from manufacturers of PP products. In 2014, with 53 employees based in Vroomshoop (Netherlands), AKG recycled 37,000 tons of plastic.

Because of quality and purity issues, the company originally only accepted PP from industrial sources. However, as more and more producers started recycling their scraps themselves, the supply started to dry up, leaving AKG with no choice but to turn to post-consumer waste. Currently, the post-consumer fraction of the PP (i.e. household recyclables) used by the company now accounts for up to 90% of the raw materials used.

Post-consumer waste streams, however, are by no means as pure or as traceable as industrial waste streams. And separating PE from PP presents a challenge to recyclers everywhere. Hence, in order to maintain the quality of its products, AKG has had to develop various creative solutions. These included the development of a sophisticated—and patented—separation system based on a technology called Magnetic Density Separation, which now operates at industrial scale.

Under the Veolia umbrella, AKG will become a Center of Expertise, specializing in the field of PP recycling, compounding and manufacturing. AKG’s Vroomshoop facility, with its well-equipped laboratory, highly developed formulation skills and of course its advanced separation technology, will be the cornerstone for the expansion of Veolia’s European platform of recycled raw plastic materials manufacturing.

According to Antoine Frérot, Chairman and Chief Executive Officer of Veolia, the acquisition of AKG is a logical step in Veolia’s strategic transformation and development. “Our growth on new thriving markets and our ability to provide solutions for the recovery and production of raw recycled materials have demonstrated the Group’s ability to turn the waste of some into resources for others, by encouraging the implementation of a circular economy from waste collection to treatment, and now to recycled materials manufacturing,” he declared.

Veolia has been active in the Netherlands for over 40 years, providing a range of sustainable energy and water utility services to both Dutch industrial and municipal clients.

In Leeuwarden, a city in the northern part of the Netherlands, for example, together with other local parties, Veolia, together with a number of other local parties, has established a pilot project to study the generation of bioplastics from the sludge recovered from wastewater treatment facilities.

The acquisition of AKG Kunststof Groep from the private equity fund Wadinko N.V will further expand the presence of Veolia in the Netherlands, and its already existing operations in the province of Overijssel. Under the terms of the transaction, Wadinko N.V will retain a minority share in AKG and will have a seat on the supervisory board.