Archwey Plastic Recycling Company Winds Down Operations; Singapore HQ Staff Let Go and Pursue Unpaid Salary Claims

23 Aug, 2023

Archwey Plastic Recycling Company Winds Down Operations; Singapore HQ Staff Let Go and Pursue Unpaid Salary Claims

Archwey, an engineering group that introduced eco-friendly alternatives to single-use plastic items and made a grand entrance with its global headquarters in Singapore just a year ago, has taken an unexpected turn by entering into voluntary liquidation. The company's operations have ceased not only in Singapore but also in its home country, the Netherlands, where it was initially founded in 2015. Notably, satellite operations located in China, Australia, Vietnam, the United States, the United Kingdom, and Spain have also been shuttered, as sources revealed to Eco-Business. This course of action has left a global workforce of around 70 employees facing uncertain futures.

Archwey had inaugurated its international headquarters in Singapore in July of the previous year, with ambitious goals to combat plastic pollution by crafting products from plastic waste. Its innovative products, crafted from a material known as Bluewave, derived from ocean-bound plastic, marine plastic, and post-consumer plastic sourced from heavily polluted rivers, aimed to make a significant environmental impact. The company's clientele included prominent brands such as Levi's, Under Armour, and Selfridges. It also formed collaborative partnerships, like the one with Singapore's EDPR Sunseap, to develop floating solar panels using recycled plastic materials.

However, recent developments paint a different picture. A leaked recording obtained by Eco-Business disclosed that Sjoerd Fauser, the company's Chief Executive Officer, had communicated the decision to close Archwey's Singapore office to the staff on August 18. This closure comes with the unfortunate baggage of unpaid salaries for some employees and outstanding debts to suppliers, as revealed in documents accessed by Eco-Business. A former employee's now-deleted social media post highlighted the concerns about non-payment of August salaries. Another ex-employee attested to the recurrent delays in salary disbursement and the failure to contribute to Singapore's compulsory savings plan, CPF.

In response to these financial challenges, a segment of the Singaporean workforce has taken legal routes by initiating salary claims through the Tripartite Alliance for Dispute Management, a platform designed to address wage-related conflicts. Staff members have been directed to liaise with the appointed liquidator in order to settle remaining wages and unresolved expenses.

Sjoerd Fauser, who was previously recognized in the Eco-Business A-List 2022, played a pivotal role in Archwey's inception, originating from the Netherlands in 2015. Initially starting as a supplier of recycled plastic hangers under the brand Arch & Hook, the business expanded over time. Archwey gave rise to another subsidiary named Shieldler, focusing on recycled plastic products for the healthcare sector. Additionally, the company's recycled plastic pellets, branded as PlasticBean, were used in various manufacturing processes.

Despite promising beginnings, Archwey's journey was not without obstacles. The company enjoyed significant partnerships with prominent consumer brands like Nike, Gucci, Coca-Cola, Unilever, Procter & Gamble, and petrochemicals giant Borealis, suggesting a strong project pipeline. However, internal discord with investors and challenges in cost-cutting during an economically challenging environment are cited by Fauser as the reasons behind the company's unexpected demise. The lavish expenditure on operational expenses, including upscale office spaces in Singapore and Amsterdam, are noted as contributing factors to the financial predicament.

Interestingly, Archwey's downfall comes on the heels of Sjoerd Fauser's involvement in a "VIP lane" arrangement granted by the Dutch government to supply essential medical items at the onset of the Covid-19 pandemic. This arrangement reportedly facilitated advance payments for importing medical gear like breathing apparatus and face masks.

The challenges faced by Archwey are reflective of a broader trend in the recycling industry. Falling prices of virgin plastic have placed considerable strain on recycling firms worldwide. In Europe, recycling plants have been forced to shut down, while others are selling recycled plastic at reduced rates to avoid accumulating excessive stock. Similarly, recycling firms in Asia have also been grappling with financial challenges due to sluggish demand for recycled materials, leading to constrained cash flows.

In summary, Archwey's venture, marked by a promising start and celebrated ambitions, ultimately succumbed to internal disagreements, financial complications, and challenging market dynamics. This turn of events serves as a stark reminder of the complexities inherent in sustainable business endeavors and the volatile nature of the recycling industry.