Circulate Capital Invests in ‘Prevented Ocean Plastic Southeast Asia’
Circulate Capital, the Singapore based investment management firm that finances innovations, companies, and infrastructure to prevent the flow of plastic waste into the world’s oceans and advance a carbon neutral circular economy, has announced that the Circulate Capital Ocean Fund (CCOF) is investing in Prevented Ocean Plastic Southeast Asia. This pioneering plastic waste collection and recycling company is developing and testing an innovative supply chain model for the management of plastic waste.
A partnership between PT Polindo Utama (Polindo), Bantam Materials Ltd (Bantam Materials) and Circulate Capital, Prevented Ocean Plastic Southeast Asia commits to strategically expand recycling infrastructure to underserved communities across Indonesia to prevent plastic leakage and support local livelihoods. The company’s ambition is to fill the gap in infrastructure by developing a scalable and sustainable model that sets the standard for industry best practice in Southeast Asia by leveraging:
Polindo’s 20 years of experience on the ground in establishing and managing plastic collection and aggregation infrastructure.
Bantam Materials’ access to premium markets and expertise in governance and traceability via its proven Prevented Ocean Plastic programme.
Circulate Capital’s strategic investment and expertise in scaling innovation and driving growth.
With more than 124 million people – 45% of Indonesia’s population – living outside of the country’s economic centre in Java, and with more than 17,000 islands, it is generally too expensive and difficult to collect waste from outside of the main population centres. The investment from CCOF will fund a network of 12 new high volume collection centres and three new aggregation centres to be established in select coastal communities in need across Indonesia, with a particular emphasis on Kalimantan and Sulawesi islands.
Prevented Ocean Plastic Southeast Asia will combine the strengths of each partner to deliver localised infrastructure providing certified and traceable premium quality recycled plastic to global markets, driving environmental, social and economic value from the bottle collector to the end consumer. Its model aims at streamlining logistics processes and enabling the pooling of collection volumes to maximise efficiency and reduce costs. Furthermore, the centres will be underpinned by the Prevented Ocean Plastic programme’s leading collection and recycling process, which is critical to enabling market access and securing premium prices for the recycled plastic that Prevented Ocean Plastic Southeast Asia will deliver.
Over a 10 year period, the venture estimates it will help prevent 400,000 tonnes of plastic from entering the ocean, avoiding 800 000 tonnes of GHG emissions while also creating 1000 direct jobs and supporting new income opportunities for thousands of bottle collectors.
‘The reality of trying to collect plastic waste across 17,000 islands has compounded the plastic pollution crisis in Indonesia – there are just too many logistical gaps and complexities within the recycling value chain,’ explained Rob Kaplan, founder and CEO, Circulate Capital. ‘We are excited to invest with Prevented Ocean Plastic Southeast Asia to build a unique network of collection and value addition to efficiently fill those gaps and meet the ready offtake market for high quality and traceable recycled plastic. This project has the potential to be a blueprint for best in class recycling and circular economy infrastructure across the region.’
Indonesia’s rapid population growth and economic development is contributing to an exponential increase in plastic consumption. While the waste management and recycling systems in the major waste sheds of Jakarta and Surabaya on Java Island are relatively established, smaller cities in Java and other islands across Indonesia lack efficient collection and recycling infrastructure, resulting in high levels of plastic pollution and greenhouse gas emissions. Some 72% of Indonesia’s total plastic pollution originates in rural regions and small to medium sized cities, yet collection rates in rural and remote regions are only 20% or less.
Commenting on the announcement, Daniel Law, CEO, Polindo, said: ‘We are proud to take our long term partnership with Bantam Materials to the next level thanks to Circulate Capital’s support. This partnership will enable us to develop waste collection infrastructure to meet the growing demand for traceable plastic while also supporting in need communities outside of Java. We believe there is an opportunity to overcome and optimise the complex collection and sorting logistics in remote areas of Indonesia, and in doing so, deliver better income opportunities and incentive models that help mobilise informal waste collection and reduce the plastic that enters the ocean.’
Raffi Schieir, director of Bantam Materials UK, said: ‘Prevented Ocean Plastic Southeast Asia has the opportunity to deliver substantial impact for in need communities across Indonesia who have never had access to recycling infrastructure. There is already an increasing global demand for high quality, traceable plastic as governments in Europe and international markets mandate the use of recycled plastic in packaging and products. By developing this infrastructure in line with the international quality and governance standards and following the fully traceable and trusted Prevented Ocean Plastic programme, we can lead the charge to transform Indonesia’s plastic waste management industry, prevent ocean plastic at scale and foster greater social and financial inclusion.’
Prior to receiving funding, the Prevented Ocean Plastic programme established a flagship collection centre in Bali to trial the business model. To date, the centre has delivered benefits through job creation, plastic collection at scale and improved livelihoods of the waste workers and their community.