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Polybuild project co-ordinator Rob Owen said the company planned to build a research and development site in Oamaru to "upcycle" plastic from the Waitaki Resource Recovery Park into a composite material.
Using even low-grade plastics, the company would produce building materials that could eventually be made around the country.
The materials used would include low-density polyethylene, used in bottles, shopping bags, and plastic wraps, polypropylene, furniture, luggage, toys, polystyrene, hard packing, refrigerator trays and CD cases and other plastics including acrylic, nylon and fibreglass, along with a fine aggregate such as ground glass, sand, quarry dust, or crushed steel slag, Mr Owen said.
The technology was pioneered in Russia and had been used in small-scale operations internationally, but if it could be produced on a large scale, it could be a win for New Zealand environmentally.
"The whole big deal with plastics isn’t in developing countries, it’s here - now," Mr Owen said.
"There’s nowhere for our plastic to go, and you’re not talking small amounts. You’ve got to do something that burns huge amounts of plastic if you’re going to recycle it within our economy. And it’s got to go somewhere - we intend it to go to building houses.
"In North Otago, we will be designing and manufacturing the products. At this stage we’re about the material [but] once you’ve made the material, you have got to make something from it. That’s what the R&D site in Oamaru is all about.
"The way you’re doing your recycling there, we don’t have to put a wash plant in, because it’s all coming to us clean. So we can take a whole lot of cost out of it."
The Oamaru material was preferable to Dunedin’s recycling, as it was hand-sorted and clean, with lower levels of contamination.
Waitaki Resource Recovery Park trust manager Dave Clare said demand for recycling had its ebbs and flows, but "long term, there will need to be major, major, major changes".
"The Chinese have made the world sit up and say ‘this plastic thing is something we can no longer pretend we’ll fix’," he said.
"They have stopped the plastics, because of the contamination. Essentially, they became the rubbish tip of the world."