Delta Capital, Daiwa invest $12.6m in Myanmar PET bottle recycler CPC

Myanmar-focused private equity firm Delta Capital Myanmar and Daiwa PI Partners have jointly invested $12.6 million in plastic bottles recycler Commercial Plastics Company (CPC).

The investment was made through Delta Capital’s Myanmar Opportunities Fund II and Daiwa PI’s Daiwa Myanmar Growth Fund. This is Delta Capital’s first control deal as also Daiwa Myanmar Growth Fund’s maiden investment, per a joint announcement.

“The investment will enable CPC to […] become the first food-grade bottle-to-bottle recycler in Myanmar with high operating standards, capable of producing US Food and Drugs Administration and EU Food Safety Authority compliant food-grade recycled Polyethylene Terephthalate (PET), and supply both domestic and overseas PET bottle converters and beverage manufacturers,” the announcement said.

The production, consumption and disposal of plastics have become a global pressing issue. Ellen MacArthur Foundation and the World Economic Forum have predicted that, by 2050, there will be more plastic than fish in the oceans.

In Myanmar, a country of 54 million people, it is estimated that approximately 2 billion PET bottles are consumed every year, equivalent to 40,000 metric tonne, according to the announcement. Myanmar is estimated to have a PET bottle collection rate of 64 per cent, compared to an average of 26 per cent in Southeast Asia, leading to more favourable opportunities for recycling in the country, it added.

CPC expects that post-expansion, it will collect and recycle over 20 per cent of the PET bottles produced in Myanmar and save over 15,000 metric tonne of carbon dioxide emission per year.
“With this additional investment, CPC will cement its leadership role in the Myanmar recycling market, push us higher up the value chain into food-grade recycled PET and help address this critical environmental issue,” commented Steven Granot, chairman of CPC.

Delta Capital Myanmar managing partner Nick Powell said: “We’re excited to be part of this business that will place Myanmar at the forefront of the global move towards full circle plastics recycling that will have a long lasting social and environmental impact.”

Powell told DealStreetAsia earlier that his firm focused on ESG (environmental, social and governance) investing with its $70-million second fund.

The firm has made nine investments including telecom company Frontiir and financial service firm Easy Microfinance. Delta Capital has raised two private equity funds and has $120 million in assets under management.

Daiwa PI Partners set up the Daiwa Myanmar Growth Fund in July 2019 with total committed capital of $30 million, targeting the consumer goods and services-related sector. Daiwa PI Partners has made six investments in Myanmar, including DO Microfinance, Frontiir, motorcycle rental service Rent 2 Own Holdings and ride-hailer Oway.

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