After lower-than-expected revenues, Hampden waste plant needs to borrow $10M

The group representing 115 Maine communities that send their waste to a new plant in Hampden has made a loan of $1.5 million to the facility to help it make improvements after its first six months of regular operations brought in lower-than-expected revenues.

Since starting commercial operations near the end of last year, the Coastal Resources of Maine plant has struggled to bring in revenue in part because it still doesn’t have the state permits that are necessary to resell two different products — plastic fuel briquettes and cellulose pulp — that it makes from the waste it receives. 

It hopes to receive those permits soon, but the delay has forced it to pay fees to landfill those products rather than receive income from selling them, according to Director of Community Services Shelby Wright. In addition, the company has struggled to sell some baled recycled goods because China started turning away many imports of them in 2018.

The plant also had the “additional stresses” of having to close for about a week in late March in order to invest in protective gear for its workers and implement new safety protocols in response to the coronavirus pandemic, Wright said.

The company is now seeking to borrow more than $10 million to help pay for a series of upgrades it has identified as necessary, Wright said. In addition to making improvements to its machinery to better handle the waste it receives, the plant needs to stock more belts, motors and other supplies needed for maintenance and hire more workers, Wright said. It now employs 52 people plus a handful of temporary workers. 

“We’ve been operational since November and gotten a taste of how everything is,” Wright said. “We’ve discovered things that need tweaking and that we need to redesign. We’re starting to get our heads around a solid maintenance schedule. It’s just to fine tune the intricacies of what is a very complicated line to produce.”

Coastal Resources of Maine will also use those borrowed funds to pay back the $1.5 million loan it has received from the Municipal Review Committee, the organization that represents the waste disposal interests of the 115 Maine communities stretching from the midcoast to Aroostook County. 

In February, the committee’s board agreed to grant the “short-term loan” out of an existing account meant to address contingencies in the Hampden plant’s operations, according to Executive Director Michael Carroll. The funds are expected to be repaid by mid-June. 

While the Municipal Review Committee and Coastal Resources of Maine still do not have a clear picture of how the coronavirus pandemic has affected the waste stream since the virus was confirmed in Maine two months ago, both groups said that they have noticed some changes. 

Deliveries of commercial waste to the Hampden facility seem to be “way down,” according to Carroll. At the same time, the prices Coastal Resources can earn from selling off recycled plastic goods has dropped, Wright said. 

On the other hand, it is receiving better prices now for recycled paper fiber, which could be at least partly related to the new demand for toilet paper and cardboard.

And as some communities have stopped trying to separate recyclables at their local transfer stations, the Hampden plant has seen an overall uptick in the amount of bottles, cans and cardboard that it receives mixed in with the trash of those communities. 

“We are producing and moving more cardboard than we ever have,” Wright said. “It could be all the Amazon boxes. It could be the extra recycling people are putting into the waste. There is no way to really pin down why, but we are definitely seeing an uptick.”