From the Sector

Indorama Ventures Public Company Limited, one of the world’s largest producers of recycled Polyethylene Terephthalate (PET) resin, announced the completion of the expansion of its recycling facility in Brazil, supported by a ‘Blue Loan’ from the International Finance Corporation (IFC), a member of the World Bank.

The recycling facility, located in Juiz de Fora, Minas Gerais, Brazil, is increasing its production capacity from 9 thousand tons to 25 thousand tons per year of PET made from post-consumer recycled (PET-PCR) material. The project is part of Indorama Ventures’ Vision 2030 ambition to continue building a sustainable global company, including spending $1.5 billion to increase its recycling capacity to 50 billion PET bottles per year by 2025.

PET is a unique and widely used plastic for water and soda bottles and the most recycled plastic in the world. Indorama Ventures, the world’s largest provider of recycled PET resin used to make beverage bottles, invested US$20 million to optimize its Brazil facility’s processes and acquire new equipment such as washing machines to help remove labels, grind bottles in water and reduce water consumption by 70%.

In November 2020, the IFC provided $300 million in Blue Loan funding to Indorama Ventures with the objective of increasing recycling capacity and diverting plastic waste from landfills and oceans in Thailand, Indonesia, Philippines, India, and Brazil—countries which are grappling with mismanaged waste and serious plastic waste in the environment. Blue Loan funds are certified and tracked for projects that support sustainable use of ocean resources for economic growth, improved livelihoods and jobs, and ocean ecosystem health. Indorama Ventures has secured a total US$2.4 billion in long-term sustainable financing from various financial institutions between 2018–2022 to support sustainability projects.

Dibella supports organic Fairtrade cotton farmers in sourcing non-GMO seeds for the next harvest.

Together with the Chetna Organic cooperative, Dibella has long supported Indian smallholder farmers, on whose fields the organic Fairtrade cotton for the company's sustainable contract textiles grows. To secure the livelihoods of the smallholders, Dibella is taking action this year with a special measure: at the beginning of the new growing season, the company pre-finances the procurement of the genetically unmodified (GMO-free) seeds.

The beginning of the monsoon season (June to September) marks the start of the cotton year in India. The small family farms where the organic Fairtrade cotton for the sustainable Dibella range is grown prepare their fields for sowing. The seeds needed this year come directly from their buyer Dibella. The company organised and co-financed the procurement of the seeds together with the Chetna Organic cooperative.

Ending the debt trap
"At the beginning of the cotton season, smallholder farmers are often forced to take out a loan to finance the seeds they need. For this, very high double-digit interest rates are charged in India, which can lead to excessive debt for families, especially when there are crop failures due to pest infestations or unfavourable weather conditions, for example," reports Simon Bartholomes, Purchasing Manager at Dibella. "We decided years ago to break this vicious circle by pre-financing the genetically unmodified seed. It is procured by our partner Chetna Organic and distributed free of charge to the farming families whose organic cotton is processed into our organic Fairtrade textiles after the harvest. This year we have allocated a sum of USD 50,000 for this purpose.

Win-win situation
This measure offers advantages for all parties involved: Through direct access to the seeds, Dibella enables the farmer families to have a more adequate livelihood. At the same time, the farmers benefit from the expertise of Chetna Organic staff, who support them in organic farming. Dibella, in turn, covers its annual demand for organic Fairtrade cotton with a right of first refusal. This gives the company full control over its entire supply chain, which starts at the cotton field.

Indorama Ventures Public Company Limited (IVL) and Carbios, a biotech company developing and industrializing biological solutions to reinvent the life cycle of plastic and textiles, announce the signing of a non-binding Memorandum of Understanding (MOU) to form a Joint Venture for the construction of the world’s first PET biorecycling plant in France.  

Based on and subject to the comprehensive terms set out in the MOU, Indorama Ventures plans to mobilize about €110 million for the Joint Venture in equity and non-convertible loan financing , pending final engineering documentation and final economic feasibility studies. Both parties have acknowledged their mutual support for the implementation of the project and their intent to finalize contract documentation before end 2023.

Subject to the successful performance of this first plant in France, Indorama Ventures confirms its intention to potentially expand the technology to other PET sites for future developments.

Under the agreement signed June 1, Carbios, which filed for plant permitting in December 2022, should acquire 13ha land from Indorama Ventures’ existing PET plant at Longlaville and expects to be granted permits by Q3 2023, allowing start of construction by end of 2023 and targeted commissioning in 2025.  The land surface offers the possibility to double capacity. Pursuant to this MOU, Indorama Ventures shall ensure 100% of output repolymerization and both partners shall collaborate to secure feedstock supply.

The total capital investment for the new plant is re-estimated to be around €230 million, taking into account recent impact from inflation. Project costs shall be financed by the sums mobilized by Indorama Ventures, the French State and Grand-Est Region subsidies available for the project , and by equity capitalization of the Joint Venture by Carbios. Part of Carbios’ equity injection into the Joint Venture shall be financed by a portion of Carbios’ current cash position (i.e. €86 million as of 30 April 2023). Carbios is actively examining the best options to finance its remaining equity injection into the Joint Venture and will choose the most appropriate solution and timeline based on market conditions.

The project is part of Indorama Ventures’ Vision 2030 ambition to build on its leadership as a global sustainable chemical company. The company’s ESG commitments include spending $1.5 billion to increase its recycling capacity to 50 billion PET bottles per year by 2025 and 100 billion bottles per year by 2030. To meet these goals, Indorama Ventures, the world’s largest producer of recycled PET resin used in beverage bottles, is investing in new recycling technologies, including advanced recycling, in addition to expanding its global footprint of mechanical recycling sites, including two in France.

Carbios has developed a disruptive enzymatic depolymerization technology that enables efficient and solvent-free recycling of PET plastic and textile waste into virgin-like products with an aim to achieve true circularity. Carbios has ambitious plans to become a leading technology provider in advanced recycling of PET by 2035. After successful ongoing operations in its demonstration plant in Clermont-Ferrand in France, Carbios has been collaborating with Indorama Ventures for over a year to assess the commercial and technical feasibility of the technology. The world’s first industrial-scale enzymatic PET recycling plant at Longlaville will have a capacity to process about 50,000 tons of post-consumer PET waste per year, including waste that is not recyclable mechanically, equivalent to 2 billion PET colored bottles or 2.5 billion PET trays.

The Sustainable Apparel Forum takes place on 10 May 2022 in Dhaka, Bangladesh, bringing together government ministers and advisors, the European Union, UN bodies, brands, global fashion campaigners, brands, manufacturers and industry leaders.

This year’s SAF, the third such event, aims to establish Bangladesh as one of the world’s most responsible apparel sourcing destinations. That’s why senior government representatives will be speaking and in attendance, listening to the needs of industry and what needs to be done to take Bangladesh garment production to the next level.

Senior representatives from globally renowned recycling and renewable energy companies will also be in attendance as well as exhibit their sustainability and green technologies, products and solutions under the same roof.

The SAF will showcase opportunities for much-needed green financing in the industry.
Issues under the spotlight will include climate action, environmental social & governance (ESG) and green finance, purchasing practices, circular economy, and regulatory reforms.

Speakers of the SAF include Dr Tawfiq-e-elahi Chowdhury, Bir Bikrom, adviser to the Prime Minister of Bangladesh on power, energy and mineral resources; Salman F Rahman, MP, adviser to the Prime Minister of Bangladesh on private industry & investment; Tipu Munshi, MP, commerce minister of Bangladesh; Begum Monnujan Sufian, MP, state minister for labor and employment of Bangladesh; Saber Hossain Chowdhury, MP, chairman of parliamentary standing committee on ministry of environment, forest and climate change of Bangladesh;  Anna Athanasopoulou, head of unit for social economy & creative industries European Commission;  Barbara Bijelic, financial sector and regulatory engagement lead centre for responsible business conduct, OECD;  Lindita Xhaferi-Salihu, sectors engagement lead, UNFCCC; Gagan Bansal, global material innovation & strategy manager, H&M; Javier Santonja Olcina,  regional head, Bangladesh & Pakistan, Inditex; Faruque Hassan, president, Bangladesh Garment Manufacturers & Exporters Association (BGMEA); Dr Mark Anner, founding director, Center for Global Workers’ Rights and also professor, Penn State University, USA; Ayesha Barenblat, founder and CEO, Remake;  Najet Draper, vice president research, Better Buying; and  Tuomo Poutiainen,  country director, Bangladesh, ILO.

Indorama Ventures Public Company Limited (IVL) was awarded “Best Sustainability-Linked Transaction & Best ESG-Linked Financing Deal of the Year” for its THB 10 billion Sustainability-Linked Bond (SLB) issued in November 2021.

The award was announced at the 15th Best Deal & Solution Awards 2021 by Alpha Southeast Asia, an institutional publication focused on investment in Southeast Asia. This recognition marks IVL's commitment to sustainable growth and ESG performance as a global leader in the chemical industry.

Yash Lohia, Chairman of ESG Council at Indorama Ventures, said, "This award reflects our long-standing commitment to sustainability and creating opportunities for investors to take part in the positive transformation of the chemical industry. This award confirms that financial markets value our ambitious sustainability and ESG efforts towards a more sustainable future.”

IVL's THB 10 billion issuance sets a new benchmark as the largest SLB transaction in Thailand and the first offered to both institutions and high-net-worth investors. The financial instrument is linked to the company's sustainability goals of reducing GHG emissions intensity by 10% by 2025, increasing recycling of PET bale input to 750,000 tons per year by 2025, and achieving 25% renewable electricity consumption in 2030.

IVL appointed Bangkok Bank, Kasikorn Bank, Krungthai Bank, Siam Commercial Bank, and the Bangkok branch of HSBC as as arrangers and bookrunners for the green transaction.

• From fossil to renewable materials: Members advocate policy analysis and focused implementation of the renewable carbon strategy

The members of the Renewable Carbon Initiative (RCI) (www.renewable-carbon-initiative.com), founded in September 2020, have joined forces to shape the transition from the fossil to the renewable age for the chemical and materials industry. This means spreading the concept of renewable carbon and developing new value chains based on renewable carbon as a feedstock.

In the meantime, several activities have started from which future members can benefit as well. First and foremost is the kick-off to comprehensive policy analysis. What influence will forthcoming regulation have on chemicals, plastics, and other materials? When and where should the renewable carbon idea be emphasized and referred to?

The policy analysis will examine pending policies in the European Union – and a later expansion to America and Asia is planned as well.

A particular focus will be placed on upcoming policies and regulations and how they impact renewable carbon. The members are currently deciding on where to start specifically, but questions that may be considered are: What does the new climate law and the “Fit for 55-Package” mean for chemicals and materials? What can be expected from REACH and microplastics restrictions? How relevant is the “Sustainable Products Initiative” and the coming restrictions for Green Claims? Circular Economy, Zero Pollution and Sustainable Financing are keywords of the future European landscapes, which might become very concrete for chemistry and materials in the next few years. To what extent the concept of renewable carbon for materials is considered in policy already and how it could be further introduced in future legislation are two of the main questions investigated in the working group “Policy”.

This working group is open to all members of RCI. Policy experts provide the respective analysis as a foundation, organising discussions between members of the policy group and plan meetings with policymakers to introduce the Renewable Carbon concept.

Additional working groups have been created, one with a focus on communication, the other looking at the development of a renewable carbon label. In early September, a renewable carbon community will be launched as a starting point for even more interaction between the members, to discuss strategies, create new value chains and start project consortia.

The Renewable Carbon Initiative (RCI) is a dynamic and ambitious group of interested parties. Membership numbers have now more than doubled since the launch almost a year ago, with RCI now boasting 25 members, 6 partners and over 200 supporters. It welcomes all companies that are on the way to transform their resource base from fossil to renewable.

Focus on Sustainability and Climate Change

Passion for Cotton: The 35th International Cotton Conference Bremen starts on 25 March in the Hanseatic city’s historic Town Hall. But before subject-specific questions are discussed in depth in the individual sessions, the concise and inspiring keynotes by leading business experts from science and industry will draw attention to the current trends and challenges in the industry at the start of the conference. A large part of the presentations is shaped by the current discussion on environmental and sustainability issues and the resulting consequences for the global economy.

Climate Change and Sustainability

“Climate change - a storm in a teacup?” asks Kai Hughes, Executive Director of the International Cotton Advisory Committee, Washington D.C., USA, in a provocative speech. The aim of his presentation is to work out the challenges of climate change especially for agriculture and cotton production. This should form the basis for later discussion on concrete approaches and solutions within the cotton community.

With his lecture “The HUGO BOSS sustainability programme ... and what our customer has to do with it” Andreas Streubig, Director of Global Sustainability at Hugo Boss AG, Metzingen, Germany, rolls up the textile value chain from a different angle, starting at the consumer level. As a representative of a premium brand for women's and men's clothing, Streubig discusses sustainability as a strategic element of the corporate strategy and provides information on how elements of the strategy are being implemented at Hugo Boss.

Rüdiger Senft, Head of Sustainability at Commerzbank, Frankfurt am Main, Germany, looks at the changing role of banks in financing the cotton market. In addition to a general introduction to the topic of sustainability and banking regulation, Senft's presentation deals with the financing of the cotton trade from a social and ecological point of view.
The opening session on 25 March is hosted by Bill Ballenden, founder and owner of Dragontree, Swindon, UK, an online auction platform for the cotton trade. As a former cotton manager for Louis Dreyfus in Europe and Asia, Bill Ballenden has many years of experience in the industry.

Cross-Cutting Issues: Digitalisation, Gender, Value Chains

The subsequent session in the conference programme with the headline “A Wider View” is devoted to currently defining trends and important cross-cutting issues in the industry. This goes far beyond classic cotton themes.

A lecture by Mark Messura, Senior Vice President, Global Supply Chain Marketing for Cotton Incorporated, Cary, North Carolina, deals with the role of cotton in an increasingly digitally controlled supply chain. Significant keywords here are faster delivery times, vertical integration, transparency and traceability.

The presentation by Roger Gilmartin, Managing Director of Tri-Blend Consulting, Charlotte, USA, entitled “The secret recipe for timely, cost-optimised and high-quality cotton clothing” promises exciting and enlightening insights. Tri-Blend Consulting conducts studies on the performance of different cotton varieties during the entire consumption process to the finished yarn and evaluates them from an economic point of view.

Amy Jackson, from the Better Cotton Initiative, London, UK, presents ICA Liverpool's “Women in Cotton” initiative. With this commitment, the initiative aims to increase the influence of women in the cotton industry and give them a stronger voice, for example by building networks in cooperation.

Navdeep Singh Sodhi, International Strategic Management Consultant at the Gherzi Textile Organisation, Switzerland, gives an insight into the current development of the value chain for cotton, textiles and clothing in Africa. Looking ahead to the coming decades, also in view of population growth, Africa is seen as having a high potential for building economic structures to improve income and prosperity.

Thomas Schneider, Professor at the University of Applied Sciences in Berlin and active in the field of production planning and control, textile materials and materials testing will host the session. A leading light in his field, Thomas Schneider has more than 30 years of experience in scientific and application-oriented research in the textile and fibre sector, including at the Fibre Institute Bremen e.V.