The incorporation of additional ingredients needed for processing in order to have optimal properties. These ingredients may include Additives to improve a polymer's physical properties, stability or processability. Compounding is usually required for recycled materials for the following reasons:

• Recycled materials are typically ground from parts that produce flakes. The compounding (pelletizing) process turns them into pellets that can be more easily handled by traditional plastics processing equipment.
• It allows Additives to be compounded into the recycled material to meet target application requirements.
• It allows virgin materials to be mixed with recycled materials to meet material specifications for performance and recycled material content targets.
• It provides a very important homogenization step. Recycled materials are usually a mix of many different grades of the same basic material. Even though the materials might be from the same family, differences in molecular weight, copolymer ratios, etc. can lead to a mixed material having poor homogeneity. The intensive physical mixing in a molten polymer that is achieved during extrusion can homogenise different grades of materials and even some types and amounts of foreign material that might not have been removed during the recycling process. (Adapted from Modern Plastics encyclopaedia 1995).