Mumbai, April 28, 2020: Circulate Capital, the Singapore-based investment management company focused on advancing the circular economy, today announced that the Circulate Capital Ocean Fund (CCOF), the world’s first investment fund dedicated to the ocean plastic crisis in South and Southeast Asia, has made its inaugural investments in two plastic recycling companies located in India and Indonesia for a total investment of US$6 million. The investment in India is in homegrown, manufacturing company LucroPlastecycle Private Limited (Lucro), who is an expert in recycling difficult-to-manage flexible plastic for its own production of similar flexible products such as shrink wrap and films and for sale as high-quality recycled plastic granules to manufacturers across the country.
The US$106 million CCOF is backed by several of the world’s leading companies, including PepsiCo, the first investor; Procter & Gamble;Dow; Danone; CHANEL; Unilever; The Coca-Cola Company; and Chevron Phillips Chemical. Not only do each of these investors commit capital to the solutions, but they also contribute technical and procurement expertise to help the portfolio scale and drive maximum impact.
As part of the fight to beat COVID-19, the UN Environment Program has urged governments to treat waste management as an urgent and essential public service to minimise health risks as well as environmental impacts and help millions of informal waste collectors as they face devastating outcomes. 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 is supporting these companies to manage the direct consequences of the crisis on their businesses while also providing access to short-term lines of credit when possible.
“If the current health and economic crisis have taught us anything, it’s that we need to future proof our local supply chains and economies. The resilience of critical infrastructures 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 businesses that can endure through a crisis,” explains Rob Kaplan, CEO, Circulate Capital.
The waste issue in India is significant, with large levels of waste generated ending up in landfills or the environment. India generates over 270 million metric tons of municipal solid waste annually[1] and of the estimated 70% collected, about 87% is disposed of in dumps[2]. Plastic forms a significant part of the problem, with the country generating more than 660,000 tons of plastic waste from 2017-2018[3].
“We are pleased to announce our investment in Lucro today. The waste and recycling industry in India is highly fragmented and lacks the funding required to effectively manage the waste generated, resulting in significant leakage of waste into waterways and the environment. Lucro is at the forefront of plastic recycling in India, turning local plastic waste into an opportunity and transforming plastic consumption from a linear to a circular economy. On behalf of our partners and investors – including many of the world’s leading corporations – we all look forward to supporting them as they grow and scale their business over the long term,” said Rob.
Based in Mumbai and with facilities in Gujarat, Lucro harnesses the possibilities of used plastic to produce high quality and innovative recycled-content products. The company is a leader in recycling locally-sourced flexible plastic to remake products and close the loop in plastic by transforming it from a linear to a circular economy.
Ujwal Desai, Co-Founder and Managing Director, Lucro, said, “We focus on films and flexible plastic that many others avoid because we believe there is inherent, the untapped value that can be realised by turning plastic waste into valuable products. The move from misuse to reuse of plastic can make a world of difference for the environment, for business and for the communities we work in.”
CCOF is also supporting Lucro with mentoring from its network of partners to help them scale and connect with the supply chains of global manufacturers.
“With Circulate Capital’s support, we will further grow and scale our business, with new collection centres planned to increase post-consumer sourcing and better support and organise the informal waste sector, as well as expand the range of our recycling processes to achieve our vision of becoming a global leader in recycled products. Our trademark Plast-E-Cycle™ process sets new standards for the industry, as we buy back and recycle flexible plastic from manufacturers, retailers, distributors, scrap aggregators and waste pickers, thereby closing the loop in plastic usage. The opportunity in this space is significant; with over 200 customers today, our business has grown 100 times in eight years,” said Ujwal.
Circulate Capital invests in and supports start-ups, organisations and small and medium-sized enterprises across the entire plastic value chain, from innovations in material to advanced recycling technologies. It seeks to mobilise catalytic capital into the waste management and recycling industry to prove that investing in this sector is scalable and can generate competitive returns while moving to solve the ocean plastic crisis.
[1]The World Bank (from the Circulate Capital investment handbook, pg. 41)
[2]“Status and challenges of municipal solid waste management in India: A review,” Rajkumar Joshi &Sirajuddin Ahmed, Cogent Environmental Science (2016) at pp 5
[3]Central Pollution Control Board India (2018)