Umasree Texplast has entered into a joint venture (JV) with Brazil-based Packem to make Flexible Intermediate Bulk Container (FIBC)/Jumbo Bags from rPET/PCR with an investment of US $15 million (approximately Rs. 120 crore) for a new plant in Gujarat to support the circular economy and Make in India.

Umasree holds a 49% equity in Packem Umasree Pvt. Ltd., the JV, and Packem, which recently became the first Brazilian company to produce 100% sustainable FIBC/Jumbo Bags made of PET/PCR (rPET), will hold 51%. Packem Umasree will be the first company in India to start producing FIBC/Jumbo Bags made from 100% rPET/ PCR (Recycled PET) with the concept of Bottle to Bag.

“We chose to form the joint venture with Packem because it is a young and energetic company with a vision for the future. India is a strategic location to serve the global market and we have been operating in this market since 2005. We have launched a 100% recycled and recyclable product and we felt Packem is a perfect fit with our philosophy of sustainability,” said Punit Gopalka, CEO, Umasree.

The new production unit to come near Ahmedabad will produce 100% sustainable FIBC/Jumbo Bags and is expected to create about 700 jobs. The plant will help India become self-reliant as well as emerge as a hub for exports of the bags.

“This new facility in Asia will take Packem to global markets that are already served today by Umasree, in PP bags, especially the USA, Canada and Europe. We have been Umasree’s business partners for over 10 years, and it was this relationship of trust that enabled the Joint Venture to further strengthen this partnership,” said Eduardo Santos Neto, CEO, Packem.

The global FIBC market is led by five countries: India, China, Vietnam, Turkey, and Mexico. In 2021, these countries exported 250 million units, with India accounting for 50% of that volume. At least two per cent of the global FIBC/Jumbo Bag market will be able to immediately replace the polypropylene product with recycled PET/PCR bags and this replacement will increase over the years.

“Our rPET big bag will bring great environmental and social benefits to India, in addition to direct jobs. It is estimated that every metric tonne of recycled plastic will create three local jobs for the collection and recycling industry. In addition, our project will create local demand for post-consumer PET bottles, with a positive impact on oceans, rivers and the environment in general,” said Marcos Spitzner Filho, CFO, Packem.

The company will reuse 100% of the rPET FIBC/Jumbo Bags and help reduce virgin plastic from agribusiness and industry. The special technology for the production of high-performance fabrics from recycled rPET/PCR is exclusive to the Austrian Company Starlinger, the world leader in the production of machines for raffia plastic packaging and recycling equipment for plastics.