Circulate Capital Ocean Fund (CCOF), which focuses on reducing Asia’s ocean-plastic crisis, has invested $6 million in two plastic recycling companies, one in India and the other in Indonesia, Singapore-based Circulate Capital said Tuesday.
This marks the investment debut of the $106-million CCOF that was announced in December. The fund plans to invest $2-10 million in around 20 to 25 companies in South and Southeast Asia.
Both recycling companies – Mumbai-based Lucro Plastecycle and Indonesia’s Tridi Oasis Group – specialize in collecting and recycling local plastic waste into raw materials for tradeable commodities, Circulate Capital said in a statement.
CCOF has made an equity investment in Lucro and extended a debt financing to Tridi Oasis, a representative of the company told DealStreetAsia. She declined to share details on the breakdown of each investment. She said the investments, including a short-term line of credit to Tridi Oasis to provide support during the COVID-19 viral outbreak, were intended to support the companies’ growth.
The loan to Tridi Oasis is 50 per cent guaranteed by the U.S. International Development Finance Corp. (IDFC), in a collaboration with the U.S. Agency for International Development (USAID) to incentivize investment in recycling to combat ocean plastic pollution, the statement said.
In addition, Circulate Capital is in discussions with all of the companies in its pipeline of potential investments about their short-term credit needs amid the virus-related slowdown and it is looking at ways to provide both direct and indirect support, the representative of the company told DealStreetAsia in an email.
Mumbai-based Lucro Plastecycle has developed a process to collect and recycle difficult-to-manage flexible plastic to produce its own flexible products, such as shrink wrap and films, and to sell as high-quality recycled plastic granules to manufacturers, the statement said.
Ujwal Desai, co-founder and managing director of Lucro, said the company saw untapped value in the films and flexible plastic other recycling companies tend to avoid.
“With Circulate Capital’s support, we will further grow and scale our business, with new collection centers planned to increase post-consumer sourcing and better support the informal waste-sector community, as well as expand the range of our recycling processes,” Desai said in the statement, noting the company already has more than 200 customers and has posted fast growth over the past eight years.
Indonesia-based Tridi Oasis specializes in recycling PET bottles into rPET flakes to make packaging and textiles, the statement said.
Dian Kurniawati, CEO of Tridi Oasis, said the company would expand its capacity for recycling local plastic waste and increase its customer base by tying up with international and local manufacturers to diversify its products.
Circulate Capital CEO Rob Kaplan said in the statement that the health and economic crisis posed by the COVID-19 outbreak has highlighted the need to support local supply chains.
CCOF’s investors include PepsiCo, Procter & Gamble, Dow, Danone, Unilever, The Coca-Cola Company, CHANEL and Chevron Phillips Chemical Co. All of its limited partners (LPs) are currently from the US and Europe, primarily from the fast-moving consumer goods (FMCG) and packaging industry.