Singapore-based investment management firm, Circulate Capital, today (11 January) announced that the Circulate Capital Ocean Fund (CCOF) is investing in an ‘innovative supply chain model’ for the management of plastic waste.
A unique 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 program; and
- Circulate Capital’s strategic investment and expertise in scaling innovation and driving growth.
With more than 124 million people – 45 percent of Indonesia’s population – living outside of the country’s economic centre in Java, and with more than 17,000 islands, it’s generally too expensive and difficult to collect waste from islands outside of the main population centres, according to Circulate Capital.
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.
This project has the potential to be a blueprint for best-in-class recycling and circular economy infrastructure across the region
Prevented Ocean Plastic Southeast Asia will combine the unique 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 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, Circulate Capital says.
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 1,000 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, Circular Captial says.
While the waste management and recycling systems in the major wastesheds 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.
72 percent 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 percent or less.
Increasing global demand
Commenting on the announcement, Daniel Law, CEO, Polindo, said, “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, “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…
“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, Circulate Capital says the centre has delivered benefits through job creation, plastic collection at scale and improved livelihoods of the waste workers and their community.