ECO Plastics in £24m funding boost
Recycling company ECO Plastics has raised £24m to expand its Lincolnshire facilities. Finance was provided by several sources, including Coca Cola Enterprises and Ludgate Environmental Fund.
ECO Plastics said expansion to its Hemswell recycling facility would more than double British production of food-grade recycled material (rPET) for soft drinks packaging.
Funding sources include a £5m equity investment by Ludgate Environmental Fund and a previously announced £5m from Coca Cola Enterprises to form a joint venture.
The remaining £14m has been funded through new banking facilities.
With the cash boost, the company said it will construct, equip and operate an expansion to ECO Plastics’ existing plastics processing plant.
It will also use the investment to build and operate the joint venture business that will supply rPET to Coca-Cola Enterprises over the next ten years.
Peter Gangsted, chairman of ECO Plastics, said: "We will recycle used British packaging in Lincolnshire, for re-use in packaging sold in Britain. This represents an important milestone for both the drinks manufacturing industry and the recycling industry. We are delighted that the markets have recognised the value of this model. The UK sustainable packaging market has huge growth potential and our expansion will make ECO Plastics a world leader."
Ludgate Environmental Fund will join SAM Private Equity and Disruptive Capital Finance as investors in ECO Plastics.
The £5m investment by the London-based fund represents 8.6 per cent of assets under its management.
Bill Weil, chief investment officer of Ludgate Investments, said: "Ludgate Environmental Fund is delighted to have co-funded this expansion and is very pleased to work alongside the strong management team at ECO Plastics. The relationship with the joint venture business formed with Coca-Cola Enterprises gives us huge confidence in the future of ECO Plastics and the PET reprocessing industry in the UK.
"This deal is an important step for the future of ECO Plastics in a regulatory environment where increasing recycling rates and landfill taxes highlight the importance and benefits of greater resource efficiency."
KPMG advised ECO Plastics on the deal.
