James Cropper Looks to U.S. for Growth in Recycled Packaging

James Cropper Plc, the British papermaker established in 1845, said it may gain business in the U.S. after it unveils a new facility today to recycle disposable coffee cups as high-quality paper products.

The new plant will allow Kendal, England-based James Cropper to recycle 1 billion coffee cups a year to produce packaging and shopping bags for luxury brands such as fashion company Fendi SpA, Chairman Mark Cropper said in a telephone interview. The facility was formally opened by Queen Elizabeth II this morning in a visit to Cumbria.

“Rather than having to buy pulp from overseas, we built this plant to have our own supply,” Cropper said. “We can be more stable in our cost base.”

The technology to separate plastic coating from paper fiber may stop 40 percent of 2.5 billion paper cups from going to landfills or being burned each year in the U.K., the company said. The system may lead to opportunities in parts of the U.S. where packaging products must have a proportion of recycled inputs.

“It’s really important for our luxury business that we now have this technology in place,” Cropper said. “We can meet the recycling-content need with no decline in quality.”

The shares rose 2.5 percent to 251 pence as of 1:15 p.m., the biggest intraday gain since March 20.

Robert Sanders of Westhouse Securities Ltd., the only analyst covering the company who shares his research with Bloomberg, had a buy recommendation on the stock at June 26 with a target price of 300 pence.

James Cropper exports to more than 50 countries and papermaking accounts for about 70 percent of its revenue.

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