International Market Due Diligence for PET Bottle to Polyester Fibre Technology

Objectives

Anthesis prepared a commercial market due diligence report for a client planning to invest in an innovative PET  plastic recycling technology in India.

The report provided an independent review of the availability of PET bottles globally, with a more in-depth focus and coverage of PET bottles availability in India. It reviewed the international competition in the manufacturing of sustainable polyester yarn made from used plastic bottles, plus the demand and pricing in the global polyester and recycled polyester fibre market.

Project

Anthesis prepared a commercial market due diligence report for an investor group that was considering an investment in PerPETual Global Technology Ltd (PGTL). PGTL owns a proprietary, fully commercialised technology to convert PET plastic flakes into polyester filament and potentially other products using its own patented process. Its first operational plant is in India.

The investment aimed to expand the existing demonstration facility in India, as well as potentially expanding operations worldwide.

The project involved:

• Providing a high-level global view of the availability and flows of PET bottles as the input material.
• A comprehensive understanding of the Indian PET bottle recycling market and relevant input into the client’s financial model to evaluate the risks and opportunities with this investment.
• Commercial benchmarking of PGTL’s chemical recycling process against existing mechanical recycling processes, as well as against direct competition from other producers of chemically recycled PET (rPET).
• Commercial benchmarking against other indirect competition from other innovative fibre-to-fibre textile recycling solutions.
• A comprehensive understanding of the international market for recycled polyester fibre for textiles and the competition with virgin polyester in the market.

Services

Anthesis’ commercial market due diligence report provided the client with:

• An understanding of the market conditions in India, including the availability of used PET bottles for recycling, prices for recycled PET flakes, and the quality of recycled PET flakes.
• A view of the competitive advantage outlined by the management team in India in comparison to existing modes of rPET production, as well as with regard to supplying the textiles sector with recycled polyester.
• An understanding of the prices of different qualities of recycled PET chips and filament made by conventional manufacturers and those of recycled products known in the market.
• An evaluation of key aspects within the financial model focusing on input flake price and sales price of product(s).

Impacts

The client received a concise executive summary with infographics presenting key elements of the complex market analysis, key trends and drivers and conclusions describing future market volumes, level of competitive pressures and pricing implications in the PET bottle recycling and polyester fibre markets.

The commercial due diligence found:

• Continued growth demands in the international PET bottle recycling market due to environmental pressures and increasing efforts to introduce formal collection systems in India and other developing countries.
• Growing demand for rPET from mechanical and chemical recycling, as well as increasing demand for bio-based products and emerging closed loop textile recycling from the apparel sector.
• Demand for rPET outstripping supply in the apparel sector, in particular demand for high quality fibres able to directly replace virgin polyester.
• Increasing commitments from the apparel sector to increase its use of sustainable fibres and consequently considerable growth in the global demand for rPET.
• Complex international supply chains shaped by key brands and fibre buyers relying on fibre mills to ethically source suitable recycled materials and comply with respective standards.
• Limitations in existing mechanical recycling technologies which were being replaced by environmental chemical recycling processes.

Project Impacts

The project provided the client with key commercial information for the recycled polyester market, including input availability and costs of PET bottle waste in India along with international demand for rPET filament yarn, output pricing, competitive pressures and market drivers.

The client decided to further develop the existing PET recycling operation in India and expand into the global market. PerPETual has already increased the capacity of its existing plant by 30 percent and has started work to further expand capacity by 250 percent.