Packem and Umasree enter into joint venture
The partnership aims to produce sustainable big bags in India
Companies invest US$ 15 million in new plant for PET/PCR made big bags
After announcing investments to become the first Brazilian company to produce 100% sustainable big bags made of PET/PCR (rPET), Packem signs a joint-venture with Umasree Texplast Private Limited to build a second production unit for PET bags, this time in India.
“This new facility in Asia will take Packem to global markets that are already served today by Umasree, in PP bags, especially the United States, Canada and Europe. We have been Umasree’s business partners for over 10 years and it was this relationship of trust that enabled the joint-venture and the joint investment of US$ 15 million in the new facility, being 51% Packem and 49% Umasree,” says Eduardo Santos Neto, CEO of Packem.
The transaction was assisted by MNSS Advisors, which acted as financial, legal and tax advisor to Umasree, and by the law firm Trilegal, which handled Packem’s interests.
The future sustainable PET/PCR big bag facility is expected to create about 700 new jobs in India, which is the largest producer and exporter of big bags in the world. “Our rPET big bag will bring great environmental and social benefits to India, in addition to direct jobs. It is estimated that every ton of recycled plastic will create three local jobs for the collection and recycling industry. In addition, our project will create local demand for post-consumer PET bottles, with positive impact for oceans, rivers and the environment in general,” points out Marcos Spitzner Filho, CFO of Packem.
Umasree’s CEO, Punit Gopalka, said he chose Packem because it is a young, energetic company with a future vision. In addition, he highlights India as a strategic location to serve the global market, in which it has been operating since 2005 and, for the first time, with a 100% recycled and recyclable product.
Gopalka sees a lot of potential in the new product. “End users and governments are pressuring manufacturers to identify a new product that is environmentally sustainable,” he points out. The global Flexible Intermediate Bulk Container (FIBC) market is led by five countries – India, China, Vietnam, Turkey and Mexico – which in 2021 exported 250 million units, with India accounting for 50% of that volume. “We predict that at least 2% of the global big bag market will be able to immediately replace the polypropylene product with PET/PCR big bags and that this replacement will increase over the years,” Umasree’s CEO bets.
Packem has started this month the delivery of the first batches of sustainable big bags to Yara do Brasil, with whom it signed a partnership earlier this year for the construction of the first Brazilian plant to manufacture this product. According to Packem, this is the greatest innovation of the last years in the segment of packaging for agriculture. According to Packem, this is the greatest innovation of the last years in the segment of packaging for agriculture. “Packem’s goal is to develop the circular economy of packaging for the sector. These are the first 100% bag-to-bag projects in the world and will see the big bags used in the field processed and recycled to be made into big bags again. We will reuse 100% of the rPET big bags and this clearly demonstrates our commitment to eliminate virgin plastic from agribusiness and industry, using recycled plastic taken from farms and the environment as a whole,” highlights Spitzner Filho.
The special technology for the production of high performance fabrics from polyester/PET PCR is exclusive to the Austrian Starlinger, world leader in the production of machines for raffia plastic packaging and recycling equipment for plastics. Packem’s first sustainable big bag facility is located in Aurora (State of Santa Catarina), next to its current headquarters, with installed capacity to produce 6.4 million units of big bags per year.
Packem has units in Santa Catarina, Minas Gerais and Rio Grande do Sul, employs over 1000 people and produces 6 million units of big bags per year. With the rPET project, it will create more than 400 new direct job vacancies. Packem’s commitment to sustainability intensified in late 2019, when it was purchased by the current owners. Renewed, the company decided to invest heavily in ESG shares to differentiate itself in the market.
Packem and Umasree enter into joint venture Umasree has been at the forefront of providing customized big bag solutions for over 15 years. It is based in Ahmedabad city, in the state of Gujarat, India, and produces 3.5 million units of big bags per year. The world is changing and to meet climate change targets there is a growing demand for solutions to reduce the carbon footprint. With the launch of the rPET project in India, Umasree aims to benefit from new technologies and contribute significantly to the environment by providing sustainable packaging solutions to its customers worldwide.