Jul 19 2011
ECO Plastics, Europe's leading plastic bottle recycler, has raised £24m to drive expansion plans at its Hemswell recycling facility. The funds provide a solid financial platform for the company's exciting expansion plans, including their joint venture with Coca-Cola Enterprises - unveiled in March - which will more than double British production of food-grade recycled material (rPET) for soft drinks packaging.
The expansion funds include a £5m equity investment by Ludgate Environmental Fund Limited (LEF.L) and the previously announced £5m from Coca Cola Enterprises to form the joint venture, with the balance funded through new banking facilities. The funds will support the construction and operation of an expansion to ECO Plastics' existing plastics processing plant, as well as the investment required to build and operate the Joint Venture business that will supply rPET to Coca-Cola Enterprises over the next ten years.
ECO Plastics' Hemswell facility is already the largest and most sophisticated in Europe. The expansion, which secured planning approval in May, will increase overall processing capacity at the plant from 100,000 tonnes to 140,000 tonnes of plastic bottles per year, just under half the total collected in the UK last year. The expanded facility will be fully operational during 2012.
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."
The £5m investment by Ludgate Environmental Fund represents 8.6% of assets under management by the Fund. Bill Weil, Chief Investment Officer of Ludgate Investments Limited, 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."
Mary McNamara, chief executive of Commercial Division at Close Brothers said: "We're delighted to have played a key role in funding ECO plastics' exciting expansion plans. This further underpins our position as a soundly funded and well capitalised finance partner open to deliver structured finance solutions.