January 11, 2022
Singapore, 11 January 2022: 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, today announced that the Circulate Capital Ocean Fund (CCOF) is investing in Prevented Ocean Plastic Southeast Asia. This plastic waste collection and recycling company is pioneering and testing 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 develop a scalable and sustainable model that sets the standard for industry best practice in Southeast Asia by leveraging:
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 centers. 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 unique strengths of each partner to deliver localized 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 maximize efficiency and reduce costs. Furthermore, the centres will be underpinned by the Prevented Ocean Plastic program’s market-leading collection and recycling process. Prevented Ocean Plastic Southeast Asia will produce traceable recycled PET (rPET) that complies with international standards and is trusted by global brands.
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 challenges 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 address those challenges 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 Southeast Asia.”
Indonesia’s rapid population growth and economic development is contributing to an exponential increase in plastic consumption. While the plastic 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 .
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 optimize the complex collection and sorting logistics in remote areas of Indonesia, and in doing so, deliver better income opportunities and incentive models that help mobilize 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 program 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.