PepsiCo-backed plastic recycling fund invests US$6m in two Asian firms

SINGAPORE – The Circulate Capital Ocean Fund (CCOF), an investment fund dedicated to the alleviating the ocean plastic pollution crisis in Asia, has made its inaugural investments in two plastic recycling companies located in India and Indonesia for a total investment of US$6 million.

CCOF is a US$106 million fund that was established by Singapore based investment firm, Circulate Capital​, and is backed by several of the world’s leading companies, including PepsiCo, the first investor; Procter & Gamble; Dow; Danone; Unilever; and The Coca-Cola Company.

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By supporting the Fund, the investors commit capital towards advancing a circular economy, and further contribute technical and procurement expertise to help the portfolio scale and drive maximum impact.

CCOF’s first investments include companies at the fore-front of their industries, specializing in building markets to collect and recycle local plastic waste into raw materials that can become tradable commodities.

The Fund has invested in Mumbai-based Lucro Plastecycle, a homegrown Indian manufacturer that developed an integrated process to collect, sort and recycle difficult-to-manage flexible plastic for its own production of flexible products.

PT Tridi Oasis Group, an inJakarta, Indonesia, female-led, company specializing in recycling PET bottles into rPET flakes, which are used to manufacture circular packaging and textiles, will also benefit from the US$6m investment.

Circulate Capital said that the investments made by CCOF will help to build markets and circular plastic value chains that prevent plastic leakage and support local communities.

In addition, Circulate Capital revealed that it is supporting these companies to manage the direct consequences of the Covid-19 crisis on their businesses while also providing access to short-term lines of credit when possible.

The investment firm noted that the loan made to Tridi Oasis is 50% guaranteed by the U.S. International Development Finance Corporation in collaboration with the U.S. Agency for International Development.

The move is aimed at incentivizing investment in the recycling value chain to combat ocean plastic pollution, further de-risking the investment and demonstrating blended finance in action.

“If the current health and economic crisis has taught us anything, it’s that we need to future proof our local supply chains and economies,” explains ​Rob Kaplan, CEO, Circulate Capital.

“The resilience of critical infrastructure like waste and recycling goes hand-in-hand with protecting the health and livelihoods of our communities.

“By investing in small and medium-sized businesses that reduce plastic pollution and advance the circular economy we can build sustainable business that can endure through a crisis.”

Kaplan believes that India and Indonesia have a great opportunity to reduce the amount of plastic waste that leaks into the oceans, by investing in their highly fragmented waste and recycling industries.

“We are pleased to announce our first investments in Lucro and Tridi Oasis – two businesses at the fore front of plastic recycling, turning local plastic waste into an opportunity for the benefit of the environment,” added Kaplan.

Circulate Capital invests in and supports start-ups, organizations and SMEs across the entire plastic value chain, from innovations in material to advanced recycling technologies.

In addition, Circulate Capital notes that it recognizes that companies helping to prevent ocean plastic require more than financing.

As part of the investment in Lucro and Tridi Oasis, Circulate Capital will provide support to the companies through its network of partners to help them scale and connect with the supply chains of global manufacturers.

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