A low cost process of making modified cellulosic materials by melt blending with at least 30% recycled and commingled plastic waste stream at higher temperature and pressure where at least 70% of plastics melts and encapsulate the filler. The plastic encapsulated filler can be used as a feed stock for continuous or discontinuous process of compression, extrusion, coextrusion and injection molded structural (e.g. profiles, stake, panel) and non-structural (e.g. sheet, thin-board) articles by mixing with a thermoplastic (e.g. polyethylene, polypropylene, polyvinyl chloride, polystyrene) or a hybrid mixture of said thermoplastics, bonding agents, plastic processing additives, impact modifiers, colorant and with/without a lightner.