GURNEE, ILL. (June 21, 3 p.m. ET) -- Minority-owned plastics recycler Midwest Exchange Enterprises Inc. -- which has largely been an industrial recycler -- is expanding into food-grade post-consumer PET.

The expansion -- which is expected to be completed by March -- will increase the size of Midwest’s recycling operations from 80,000 square feet to 120,000 square feet, and give it the ability to produce almost 7,000 pounds of recycled food-grade PET per hour, or about 50 million pounds annually.

Midwest said it has not decided yet on the exact site for its new PET recycling plant. But a spokesperson for the company said it most likely will be in a 40,000 square foot building next to the company’s current recycling plant in Gurnee, Ill., 40 miles north of Chicago.

Midwest also is considering a site in Pleasant Prairie, Wis., roughly 15 miles north of Gurnee.

Midwest currently has a PET wash and dry operation and grinds PET, low and high density polyethylene and polypropylene in Gurnee, where the company is headquartered. Approximately 90 percent of the 43 million pounds of plastic it reprocessed in 2011 was post-industrial, and its sales were around $24 million.

“Our goal is to eliminate our country’s dependency upon foreign virgin PET resin by ... manufacturing recycled PET resin from local sources of PET plastic [in order to] produce enough food-grade rPET to sustain the local companies’ needs,” said President and CEO Alex Casillas, who founded the company in 1994.

“No longer will local materials need to be sold off-shore to be reprocessed,” he said. “We will keep the work and our resources in the United States, employing more of our community and encouraging local job creation.”

Midwest said its plant will use equipment from Italian recycling equipment manufacturer Amut SpA, whose North American operation is based in Woodbridge, Ontario.

Casillas visited the PetStar SA de CV food-grade PET recycling facility in Toluca, Mexico, before selecting Amut as a supplier.

“The equipment cleans the materials extremely well and will meet and exceed our clients’ requirement,” Casillas said. “The Amut technology has been proven across North American in a wide variety of operations using different materials [ranging] from land-fill reclaimed bottles in Mexico to the mixed stream of Ontario, Canada.”

The technology will help Midwest minimize its use of energy, water and chemicals, he said.

“Amut’s technology and innovation provide for a cost efficient recycling plant,” Casillas said.

Casillas said the drivers behind the expansion were to reduce the carbon footprint of packaging materials and to help companies in North America close the loop for recycling, by enabling them to use more recycled PET in their packaging.

“What excites me most is the opportunity to create a totally closed-loop recycling solution,” said Anthony Georges, president of Amut North America. “We can reduce our demand on virgin plastics through recycling, and thereby reuse the plastic again to make another new product which will close loop in the recycling process.”

Casillas believes the market for recycled PET in North America is growing.

“When you evaluate what is happening here in North America, you see the demand for rPET increasing especially in the thermoforming market. Grocery stores and large chain stores are demanding rPET to be used in more consumer packaging more and more every day.”

A case in point: The Canadian Grocers Initiative, adopted last year, mandated that most thermoformed food packaging be made from PET.

“This commitment ... will result in a plastic water bottle and container market that is made of 100 percent RPET, [provide a] ‘green’ alternative for consumers, and an environmental breakthrough leading to a substantive reduction in the carbon footprint of packaging in this important consumer product sector,” Casillas said.

Casillas also said that the company’s new RPET manufacturing facility will allow Midwest to diversify its strategic marketing plan by manufacturing recycled resin for local production and selling food-grade recycled PET resin to food and beverage packaging companies.