Paper and packaging processing giant Visy has dropped multiple kerbside recycling contracts in Victoria, leaving councils uncertain about recyclable disposal.

The major processing company told at least two garbage disposal contractors it would no longer accept recyclables in February, citing difficulties caused by the recent plastic and paper waste import ban in China.

One of its contractors, Wheelie Waste, services 11 councils in western Victoria. Horsham Rural City Council in particular has said that it will stockpile its recycling, until a solution appears.

China was the dominant market for recycled plastic. The Institute of Scrap Recycling Materials figures show China used to import seven million metric tons of waste plastic and 29 million metric tons of waste paper annually.

[Related: Visy wins casual labour case]

Many countries including Japan, Australia and New Zealand have relied on China to take a lot of its waste plastics for recycling, and waste paper, while the EU and US also relied on the country to take plastic waste, including PET bottles.

About 30 per cent of Australian recycling was estimated to be sent to China, before the country banned 24 categories of recyclables and solid waste.

Visy warned the ban would mean existing arrangements would no longer be sustainable in a submission to a parliament inquiry into recycling last year, along with adding to stockpiling of product and risks of fires.

The company is one of Australia’s largest recyclers, it claims that in a year it processes 91,000 tonnes of plastic and 1.8m tonnes of paper and cardboard.

Visy is privately owned by the Pratt family and along with processing waste, produces paper and packaging material across 120 locations across Australia, NZ, Thailand and Vietnam with sales in excess of $5bn.

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