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Supply chains on alert over the closure of major plastics supplier Qenos

Qenos Closure

Speculation surrounding the future of Qenos – Australia’s biggest plastic and chemical manufacturer – continues to grow, with hundreds of jobs at risk and supply chains set to feel the impact, especially in the plastic category.

Following multi-million dollar losses over the past couple of years, attributed to high gas and energy prices, Qenos – which is owned by China National Chemical – has reached a deal to sell the company to property developer Logos, according to The Australian.

This has led to speculation that Qenos is planning to shut down before the end of the year, with the company’s industrial sites believed to be at the centre of the deal.

A permanent closure of the sites in Altona, Melbourne and Botany, Sydney – which has already been shut for over a year – could lead to the loss of 700 manufacturing jobs, while experts have warned Australia’s plan to increase plastics recycling could be hit hard.

The National Plastics Plan 2021, set out by the federal government, is targeting 70 per cent recycling rates by 2025, plus 20 percent average recycled content within plastic packaging.

Small manufacturers that buy from Qenos have been treated “with contempt”, says The Australian, who also reported that the company has refused to give any advice in writing about its future plans, leaving smaller buyers unsure of the security of their own supply chains.

Speaking exclusively to the publication, Aleks Lajovic, managing director of Impact International who is a long-term customer of Qenos said, “With our products, we have two approved grades (of plastic) that we can use – one is manufactured here in Australia, by Qenos, but the other one is imported. But now we have to switch to the imported grade – and we’ve done that and we have that supply chain set up.

“But it weakens us as a business. And also we want to be supporting Australia, and buying plastics from an Australian company with stricter environmental regulations. And their quality has been really, really good.”

In Australia, there are only two companies that produce the resin required to make complex plastic products; Qenos and Viva Energy.

Also speaking to The Australian, recycling industry expert Helen Millicer said the closure of Qenos could have a  “catastrophic impact on the broader Australian chemicals industry – but particularly on plans to improve recycling rates”.

She added that the loss of Qenos’s two production plants would make it “almost impossible to establish an end-to-end recycling industry for plastics.” 

Meanwhile, speaking live on Sydney news and talk radio station 2GB, broadcaster Mark Levy highlighted the impact of Qenos’s closure on the country’s plastics recycling plan.

 “In 2022, Qenos launched a feasibility study with Cleanaway to break down up to 100,000 tonnes a year of packaging into its chemical components then back to a resin for future use,” Levy said.

“100,000 tonnes is the same weight as two Sydney Harbour Bridges, that is a lot of recycled plastic. But because it looks like Qenos is shutting down, well we can forget about it. That 100,000 tonnes of plastic will now end up in landfill.”

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