Recycling firm to shut, 35 jobs lost, as SA government ignores plea for help over soaring power bills

UPDATED: A family business in Kilburn faced with paying $180,000 a month for its power will close, costing 35 staff their jobs.

Stephen Scherer is to close his business, PGS Plastics due to the raising price of electricity. Picture: MATT LOXTON

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A FAMILY business in Kilburn has made the “heartbreaking” decision to close its doors after 38 years, leaving 35 employees out of work, because of higher costs and soaring electricity prices.

In the past 18 months, Plastic Granulating Services managing director Stephen Scherer said his electricity bill of about $80,000 a month had spiked to $180,000 a month.

“It was totally unsustainable for a business our size,” he said. “It was heartbreaking.”

The specialised recycling company converted industrial and consumer waste back into raw materials that could be used to build irrigation pipes and flowerpots, and manufacture new automotive batteries.

The business wanted to evolve and take lower-grade waste using new technology it developed over two years to make its operations more efficient and use less power.

Despite no drop in demand, rising costs meant the company wasn’t making sufficient profit to borrow the $1.3 million it needed to implement the new technology. It applied for grants and won $300,000 from Green Industries SA but was unable to secure the other $1 million in time.

“We did get half the money offered to us a few days ago, which was too little, too late,” Mr Scherer said.

In the past 18 months, Plastic Granulating Services managing director Stephen Scherer said his electricity bill of about $80,000 a month had spiked to $180,000 a month.

“We are also bitterly disappointed that our approaches to the State Government for financial support to restructure and expand the business have failed.”

Business SA Industry and Government Engagement executive director Anthony Penney said he would not be surprised if more businesses closed, especially with energy prices set to rise from July 1.

“We’ve got pages and pages of businesses that are struggling to pay or to cope with the exorbitant costs of electricity,” he said. “We want to make sure government is fast tracking any (grant) application that they do receive.”

SA Council of Social Service chief executive Ross Womersley said jobs lost in this situation had big flow-on consequences for jobs in other industries.

“We’re extremely hopeful this ends up being a limited number of businesses. If it turns into a massive number, then our employment statistics are going to skyrocket,” Mr Womersley said.

Energy Minister Tom Koutsantonis said the business closure was extremely disappointing news, and the Automotive Transformation Task-force was working with management to ensure displaced workers were aware of available support.

“Many Holden supply chain businesses have been hit hard in recent months and our thoughts are with the business owners and the workers,” he said. “We are doing everything we can to bring down prices for business.”

Opposition environment spokesman David Speirs said households pay for recycling through the solid levy waste that flows onto their council rates.

“They will be furious that as a result of the Weatherill Government’s failed energy policies an important recycling business is going bust,” he said.

“If the Weatherill Government allows this local company to close then we will have the disgraceful situation where plastics that SA households want recycled are shipped overseas for processing before being shipped back to Australia.”

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