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- 2 December 2021 17:13
Close the Loop shares soar 50% on ASX debut
Shares in Close the Loop Limited (ASX:CLG), an end-to-end solutions provider from design and manufacturing, through to collection and recycling of products, increased 50 per cent on very heavy trading to close at 30 cents a share on its first day on the Australian Securities Exchange (ASX).
The company, well known for its recycled products such as TonerPlas asphalt additives made out of used computer printer toner and waste soft plastics such as shopping bags that improve road quality and performance, became the first company to list on ASX that provides full circular-economy solutions – from design, manufacture, and collection through to reuse or recycling.
Close the Loop listed following the merger of two companies: Close the Loop, a resource collection and recycling company that sorts, processes, provides value-added services and recycles plastics; and O F Packaging, a provider of innovative, flexible and carton packaging, printing and related sustainability solutions.
Together the combined group provides end to end solutions for reducing waste to landfill and getting recycled content back into new products through operations in Australia, North America, Europe, Vietnam, China and South Africa. In FY21 Close the Loop Group reported revenue of $67.4 million and forecasts revenue to grow to $73.9 million in FY22.
Proceeds from a $12 million IPO will enable the company to scale its operations by upgrading machinery, installing new processing equipment for plastic washing and separation, increasing automation and funding acquisitions.
Close the Loop Chairman Greg Toll said, “We are delighted with the outcome of the IPO and the strong support shown by our new institutional and sophisticated investors. Our listing today on the ASX marks not just an important milestone for Close the Loop as we progress our next phase of growth, but the Company has become the first end-to-end ‘circular economy’ business to list in Australia. I would like to thank our existing shareholders for their ongoing support and warmly welcome our new investors to share in this exciting journey.”
Close the Loop Group has more than 250 enterprise customers in more than 20 countries including several Fortune 500 companies. It partners with 15 of the world’s largest print and print consumable OEMs, including Brother, Canon, Toshiba, Epson, HP and Xerox. It also provides innovative flexible and carton packaging, printing and related sustainability solutions to domestic and international customers of all sizes mainly in produce, snack foods, pet foods, bakery and horticulture markets.
Group Chief Executive Officer Joe Foster said, “Today Close the Loop becomes Australia’s most advanced vertically integrated design, manufacturing, collection and recycling company, that reduces waste to landfill and gets recycled content back into new products. Our award-winning packaging products and regenerative uses for plastics help companies stay ahead of evolving recycling guidelines and regulations.”
Close the Loop Group provides printing and packaging and related services such as digital printing and pouch manufacturing; gravure printing, flexographic printing and bag and pouch converting and packaging services. This is complemented by value-add services where it charges set fees per kilo or unit of plastic waste it collects and processes in the form of value added managed services, including logistics and materials recovery processes, delivering output streams consisting of granulated plastics, metals, and providing data analytics and business intelligence services as well as new products including TonerPlas and the rFlex range of injection moulded products. The company also sells recycled materials by grinding plastics and consumables into their base materials, and then selling these to plastic and metal brokers in the commodities market.
“With only two per cent of plastic packaging globally currently being recycled, customers need more effective and efficient recovery and take back or re-use of valuable product resources to increase their sustainability footprint. Coupled with the strong regulatory changes stipulated by governments around the world, we are excited about Close the Loop’s prospects and our ability to benefit from these key long-term global trends.”
Close the Loop is well positioned as the growing packaging and plastics consumables industries look to circular economy innovation and sustainability initiatives to stay ahead of evolving regulation and help companies build their social licenses to operate. These regulations include the European Union’s Waste Electrical and Electronic Equipment (WEEE) Directive to increase the amount of e waste recycled and to reduce the volume of electronic waste that goes to landfill, and the Chinese ban on importing mixed recycled plastic waste from other countries that has created a drive for domestic solutions in Australia, the United Kingdom, the United States and in Europe.
Locally, it is well placed to leverage certain packaging and recycling regulatory targets sought to be achieved by 2025 and which should help to create a more environmentally favourable circular economy. This is underpinned by the 2025 National Packaging Targets: 100% of packaging being reusable, recyclable or compostable by 2025; 70% of plastic packaging being recycled or composted by 2025; 50% of average recycled content included in packaging by 2025; and the phase out of problematic and unnecessary single use plastic packaging by 2025.