Caerphilly Council wants to recycle more domestic waste
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A factory employing more than 160 people near Caerphilly says it will move location if the local council opens a waste processing plant nearby.
A £20m plant to turn domestic waste into compost and fuel is planned for Duffryn Business Park, Ystrad Mynach.
Bergstrom Europe, which makes heating and air conditioning systems for motor vehicles, says it is worried about the effects of pollution and traffic.
Caerphilly Council said nearby firms "shouldn't be adversely affected".
The waste plant is planned for the old St Ives print works site on the business park.
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The businesses on the industrial estate shouldn't be adversely affected by what is proposed
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The plans have been approved by Caerphilly Council and approval is now being sought from the Environment Agency.
It would recycle domestic waste and turn it into compost and fuel.
But Bergstrom Europe has said it is worried about potential pollution, traffic and the perception of its customers if the waste plant opens.
The company's expansion plans have been put on hold while it looks for another site in the area and it is in talks with Caerphilly Council about relocation.
'Public debate'
Plaid Cymru councillors have demanded an extraordinary general meeting of the council to discuss the issues.
Allan Pritchard, Plaid's deputy leader on the council said: "I feel we need to get this issue into the open air for a public debate."
Caerphilly Council said the recycling centre would not cause problems for neighbouring firms.
A spokesman said: "The operation proposed for St Ives is entirely contained within the industrial unit.
"The businesses on the industrial estate shouldn't be adversely affected by what is proposed.
"It's true to say we are talking to local firms to allay those fears and it's true that some of those firms have requested a site search for other premises.
"That's being carried out although no decision on assistance for those firms has been made."