Its Indiana plant is in bankruptcy. But recycler says $1B Georgia plant on track

Brightmark LLC announced plans in April for a nearly $1 billion plastics recycling center in Upson County, between Macon and Columbus, that would be far larger than its Indiana facility.

San Francisco-based Brightmark LLC has said its planned 2.5 million-square-foot recycling facility in Thomaston could keep some 400,000 tons per year of plastic from ending up in landfills, incinerators or left floating in waterways. Recycling reduces the need to drill fossil fuels to manufacture new plastics, the company has said.

Credit: Handout

Credit: Handout

Brightmark LLC has said it plans to hire 200 people at the Georgia facility, with construction to start this year.

“We are optimistic about the future of the Thomaston facility and believe it will play a crucial role in our overall plastics business,” Brightmark LLC CEO Bob Powell said in a written statement. “We look forward to our continued partnership with the Thomaston community.”

The company said it is in the process of obtaining required air permits.

Indiana issues

Brightmark Plastics Renewal LLC, and several related companies tied to the Indiana facility, filed for bankruptcy protection in Delaware on Sunday listing between $100 million and $500 million in assets, and debts within the same range.

The Indiana facility, called a “circularity center,” is a fraction of the size of the one planned in Georgia. In court filings, Brightmark Plastics Renewal said the Indiana facility has failed to generate enough revenue to fund its operations or to pay off its $172 million in secured debt.

In a court filing, the chief restructuring officer appointed to oversee the Indiana operation said he was told it would require more than $100 million in additional investment over several years to reach sustained profitability.

Credit: Courtesy of Brightmark

Credit: Courtesy of Brightmark

Brightmark Plastics Renewal appointed a company called SSG as an investment banking adviser during the bankruptcy process and to find a buyer.

“Given the debtors’ financial condition, an orderly but expeditious sale of the assets is critical to maximizing recoveries for all creditors,” the company said in a court filing Monday.

Bankruptcy court filings said prior to the petition that Brightmark LLC had been considered as a potential “stalking horse” bidder for the debtors’ assets. A “stalking horse” is a prearranged bidder or buyer of a company in bankruptcy and one seen as providing the minimum bid to buy the assets and provide at least some compensation for creditors.

But filings say that bidding will be opened to other parties.

The Indiana facility has not reached peak operations and has been hit by costly setbacks and changing market conditions.

“Despite achieving mechanical completion over three years ago and producing the product for approximately two years, the debtors have been unable to generate substantial revenue,” the filing said.

‘Strong partner’

State and local officials in Georgia offered Brightmark LLC $73.6 million in tax breaks, grants and other incentives in exchange for the company’s commitment to invest nearly $900 million and hire about 200 people at an average wage of more than $51,000.

About half the package is from the state and is largely contingent on Brightmark LLC delivering on its jobs and investment goals before it receives the incentives.

A state project development grant of $500,000, for instance, has not been provided to the company because terms required it to show its Indiana facility was “operational and producing salable product in commercial quantities.”

“From the beginning, Georgia’s focus was on protecting the taxpayer by making the grant contingent on the viability of Brightmark’s Indiana facility,” a Georgia Department of Economic Development spokesperson said. “We look forward to hearing from the company on how their plans for the Georgia facility would be different than Indiana.”

Clean tech jobs have been a focus of Georgia’s business recruiters, and the state has landed many high-profile prospects, including a Hyundai Motor Group electric vehicle plant. But not all have panned out, including a proposed $2.6 billion battery factory that was scotched earlier this year.

Slade Gulledge, executive director of the Thomaston-Upson Industrial Development Authority, said the company has kept the agency informed about its recent financial situation and the authority expressed confidence in the company’s commitments.

Gulledge called Brightmark LLC “a strong partner.”

“We remain optimistic about the future and look forward to continuing our collaboration to bring sustainable development and economic growth to our community,” he said in an email.

Powell, the CEO and a Georgia native, said the bankruptcy filing “allows us to take control of our future.”

Credit: Special

Credit: Special

In a statement, a Brightmark LLC spokesperson said “the challenges faced by the [Indiana] facility are unique to its circumstances.”

“We have learned valuable lessons that we are applying to ensure the success of the Thomaston project,” the statement said. “We are moving forward with the development of the Thomaston facility as envisioned.”

An earlier attempt by the company to build a similar facility in Macon ended after community pushback related to environmental concerns and worries about how diesel fuel would be one of the products created through the recycling process.

Powell said in an interview last year that no fuel will be produced at its Thomaston plant.