Replas says most of its range of 200-plus products are now made with plastic waste from hospitals - including Grampians Health, St John of God and Bendigo Health.

"For us it doesn't really mean much at all. There's a mountain of plastics out there to recycle," general manager Paul Hone said.

"Yes, REDgroup was one of our suppliers, but we actually take more hospital waste than supermarket-collected waste.

"We'll be able to source other materials quite easily."

The NSW Supreme Court ordered on Monday that REDcycle's parent company - RG Programs and Services - be wound up.

Benjamin Carson of Farnsworth Carson was appointed as liquidator.

Coles and Woolworths were partners in the scheme and on Friday offered to take back the plastic until it can be "viably processed for recycling".

Replas said the demise of REDcycle was sad - but they could see it coming.

"It was a victim of its own success," Mr Hone said.

"REDcycle was a great idea and an iconic brand.

"It was printed on lots of pieces of packaging and it captured the imagination of the general public.

"But it got to the point where they should have said: 'Stop, we have nowhere for this to go'.

"The public was continuing to provide more raw material than they were ever able to recycle.

"It's a shame because it has absolutely dented the public's trust."

Mr Hone said Replas had more success with hard plastic than the soft variety usually collected in supermarkets.

"Soft plastic is usually quite contaminated. There might be paper and little bits of aluminium in there," he said.

"I've even seen dead cats and bongs that people have put in their recycling.

"But we took the soft plastic because it was the right thing to do.

"Hard plastic hospital waste is much easier to recycle.

"We don't use anything that has had blood on it - or has been touched by patients.

"A lot of it is packaging such as blister packs.

"Plastic hospital curtains also have to be thrown out after a certain amount of time, so they are recycled too."

Replas also has a Carrum Downs operation but Mr Hone said 80 per cent of their products were made in Ballarat.

He said their biggest customer was the City of Casey, which had a strong commitment to outdoor furniture, bollards and other items made from recycled plastic.

Ironically, Mr Hone said the City of Ballarat was one of their smallest.

"Councils and the state and federal governments could easily make a difference to the amount of plastic going to landfill," he said.

"A requirement should be put in procurement policies that there must be a percentage that must be made from recycled goods and that provide a community benefit.

"For many government bodies, the only requirement or measurement they have is the cheapest price."

As an example, Mr Hone said bollards made from pine would be cheaper than the recycled version.

"But a recycled plastic bollard would last three times as long," he said.

"The disadvantage of plastic generally is that it survives in the environment for a long time - but for our outdoor products, that is actually its strength."