Circulate Capital, the Singapore-based investment management firm that finances innovations, companies, and infrastructure to prevent ocean plastic and climate change by advancing the circular economy, today announced that the Circulate Capital Ocean Fund (CCOF I) is investing in Deluxe Recycling Private Limited (Deluxe).
Deluxe is an Indian plastic recycling company that recycles challenging multilayer plastics (MLP), like sachets and Used-Beverage-Cartons (UBC) into new, valuable products, such as pallets and rickshaw seats.
By creating a market for MLP waste, the company expects to divert 34,000 tons of waste per annum from incineration or landfills by 2025, helping pave the way to a circular economy in India.
Typically considered of no value and very difficult to recycle, MLP waste is one of the most polluting forms of plastic packaging and, if it is collected at all, is used for fuel, incineration, or co-processing at cement plants, it said in a press statement.
How it works?
Deluxe has developed a scalable ecosystem for the collection of MLP by working with and paying a network of aggregators and small material recovery facilities (MRF) to collect and sort MLP waste. The company then uses proprietary, in-house developed technology to manufacture a variety of heavy, rigid products. In 2020, the company recycled 7,100 tons of MLP, making it one of the largest organized MLP recyclers in India.
Investment from the Circulate Capital Ocean Fund will allow Deluxe to expand to three new facilities across western and southern India, increasing its capacity three-fold.
Investment fund focussed on ocean plastics
The Circulate Capital Ocean Fund is the world’s first investment fund focused on ocean plastics in South and Southeast Asia, created in partnership with leading global corporations, PepsiCo, Procter & Gamble, Dow, Danone, Chanel, Unilever, The Coca-Cola Company, Chevron Phillips Chemical Company LLC and Mondēlez International. As Deluxe expands, its infrastructure can be leveraged to build a circular multilayer plastics market and accelerate the development of the sector as new technology is deployed, it said.
Deluxe supplies 90% of recycled seat board
Rob Kaplan, Founder and CEO of Circulate Capital, said, “Difficult-to-recycle plastics like sachets, food packing and plastic wrap have remained a global challenge in the waste management and recycling sector. Deluxe’s game-changing technology and entrepreneurial know-how has enabled the company to transform these multilayer plastics into valuable products at a scale not seen before in India. Deluxe currently supplies 90 percent of the recycled seat board market, which means nearly every rickshaw driver sits on a Deluxe-recycled seat.
"The dynamism and size of the Indian market present a huge opportunity for investment in the transition to a circular economy for plastics. Deluxe is firmly positioned at the forefront of this transformation and we’re proud to be supporting their growth,” Kaplan added
India generates 9.4 MT of plastic waste annually
The problem of plastic waste, especially MLP, is increasing in India, with the country generating 9.4 million tons of plastic waste annually. Only 60 percent of plastic waste is being collected, with 3.8 million tons leaking into the environment every year.
According to the Ellen MacArthur Foundation, the circular economy development path in India could create an annual value of Rs 14 lakh crore (US$218 billion) in 2030 and Rs 40 lakh crore ($624 billion) in 2050 in comparison to the current development scenario. It could reduce greenhouse gas emissions by 44 Circulate Capital along with significant reduction in air pollution, thus contributing to health and economic benefits for society.
Jignesh Shah, Co-Founder of Deluxe said: “At Deluxe, we see the potential to transform India’s MLP waste into a valuable mainstream raw material, incentivizing its collection and replacing the need to use virgin plastics.”
