It has been stated throughout the technology section of this report that there is no such thing as a typical WPC feedstock that should be used to manufacture a specific WPC product, there is no right or wrong process to use and there is no specific process that should be used to manufacture a specific product. There is a wide range of factors that need to be taken into account and include:

• The availability and cost of raw materials (polymer, wood and additives)

• Whether or not to use recycled materials

• Whether to compound in-house or to buy in pre-compounded pellets

• The end use of the product (decking, fencing, door profiles, etc)

• The product performance requirements

• What processing equipment a potential manufacturer currently owns

• The technology / manufacturing background or expertise of the company

• Whether or not to purchase a license and a turnkey installation and, if so, which one As a result, there are too many variables to allow exact costs for a WPC manufacturing process to be stated. These must be examined on a company-by-company basis prior to any decision being made on whether or not to enter the WPC market. The following information does, however, provide some guidance on typical manufacturing costs based on current UK prices. The figures quoted are taken from a number of earlier sections of this report, unless otherwise stated. The principal raw materials required are:

• Virgin Polymer97

o LDPE (£500/tonne) o

HDPE (£500/tonne)

o PVC (£350/tonne)

o PP (£580/tonne)

• Recyclate (costs are directly affected by the cost of virgin polymer)

o LDPE (£140 - £170/tonne of clean uncontaminated baled film up to £400 - £450/tonne of compounded pellets)

o HDPE (£150 - £170/tonne of clean uncontaminated baled film up to £400 - £450/tonne of compounded pellets)

• Wood o Sawdust (£100/tonne) o Wood Flour (£200/tonne)

• Ready to use, compounded WPC pellets (£700 - £1,200/tonne) Unless compounded WPC pellets are being used which will have a predetermined formulation, the feedstock formulation can vary significantly in terms of the percentage and type of wood filler used; the polymer resin used and whether it is 100% virgin material or includes a proportion of recyclate. Consideration must also be given to what additives will be required. This will also have an impact on costs. Recent discussions 98 with potential manufacturers of WPCs have indicated that, currently, WPC raw material costs alone range between £0.7 - £0.9/kg. This, however, is based on virgin polymer and wood flour. Material cost savings could be made by considering, for example, recycled plastic and wood fibre in another format.

The manufacture of WPCs is a step-by-step process from raw materials to final end product. The stages of the process, based on an extrusion technique, and associated costs are as follows:

• Raw materials handling (sizing, drying)

o Polymer (£250K)

o Wood (£50K - £100K)

• Formulation / blending (£50K - £100K)

• Processing (£120K)

• Tooling / dies (£10K - £100K)

• Cooling (£20K - £40K)

• Finishing (£10K)

This gives a total of £500K - £750K. This assumes, however, that all of the equipment has to be purchased. It may be that a plastics processor already has extrusion equipment that, with modification, could be used to manufacture WPC, so costs would be significantly less. These costs also assume that each step in the process is carried out in-house. If, for example, precompounded WPC pellets were used to manufacture the product then the first two steps of the process would not be required, saving on capital expenditure. Input material costs, however, would be higher. Baled LDPE recycled film is a relatively low cost material but will require further processing (e.g. shredding or grinding), hence initial capital expenditure will be required for equipment to cover the first two steps of the process. Costs will also be different if other processing techniques, for example injection moulding, are used. These examples re-iterate the need for costs to be examined on a company-by-company basis.

Another route that could be considered is the purchase of a license and a turnkey installation, which would be recommended for a company starting up from nothing and looking to enter the market quickly. Two technologies that fulfil these criteria are the Strandex process (£750,000 plus £20,000 for a die) and the EIN process (£1,000,000). Other licenses are available for the production of WPC pellets (e.g. the Fasalex process and the Techwood process) Actual processing costs will be very company specific and will be directly influenced by factors such as company overheads, fixed and direct costs and the impact of formulation and application on production rates (window profiles will be slower than decking, higher wood contents result in faster output rates, etc).

A typical example of the costs of manufacturing a product such as decking is shown below99. These data refer, however, to manufacturing in the USA wher the cost structure will be different to that in the UK and the rest of Europe. They give, however, an indication of the processing parameters that will allow WPC production to be economically feasible.

Raw Material Formulation:

• 55% wood, 34% HDPE recyclate

• 3% EBS/ZnST lubricant, 8% other additives

Processing Details:

86mm conical extruder at an output rate of 1600 kg/hr or 429 metres/hr Total costs = £2.17 per metre or £0.60 per kg.

Davis-Standard recommends that, for a WPC production line to be economically feasible, the costs must not exceed £600 per tonne of end product. Using the raw material costs quoted above, this will not be achieved in the European market at the moment.

Consideration should also be given to the costs involved in the transport of raw materials, which will depend on the material format (e.g. the transportation of plastic film is less efficient than the transportation of pellet) and of the end product itself. The costs involved in the distribution and marketing of the product will also have to be taken into account.

The European WPC market is embryonic and, as a result, there is little in the way of direct costs for WPC products or their comparison to competing materials. In the USA, however, WPCs are valued at approximately £1000/tonne at least, although this will obviously vary depending on the factors outline above. This allows these materials to compete at the mid-price range of their target markets. In the UK and the rest of Europe, raw material costs are based on virgin polymer and wood flour and, as a result, are high. This means that the products will be closer to the high end of the market. That said, however, developments in WPC processing mean that foamed composites, for example, are technically feasible, which require less input material, thus reducing costs.