Fast-moving consumer goods conglomerate Hindustan Unilever Ltd is set to pick up a minority stake in recycling and engineered plastics manufacturer Lucro Plastecycle Pvt. Ltd, which is backed by investment firm Circulate Capital.
HUL’s board has approved acquiring a 14.3% stake in the Mumbai-based company, according to a stock exchange filing. It didn’t disclose the financial terms.
“The investment aims to strengthen plastic circularity by increasing the availability of recycled content for flexibles, providing a roadmap for businesses to move towards sustainable plastic packaging and address the challenge of hard-to-recycle flexible plastic,” HUL said in the filing.
Lucro Plastecycle is a waste management, recycling and product manufacturing company founded in 2012 by Saumil Dinesh Desai and Ujwal Desai. Some of its flexible packaging products include films, shrink wraps, automotive covers, retails bags using recycled granules from flexible plastic trash.
VCCircle's data and research platform VCCEdge showed Lucro Plastecycle's net sales had risen 57% on year in 2023-24 to Rs 84.8 crore while net profit tripled from the previous year to Rs 6.6 crore.
“This investment by HUL paves the way for increasing our recycling capacity, driving large-scale commercial adoption of post-consumer resin and setting a new benchmark for sustainable plastics,” said Lucro managing director Ujwal Desai.
Circulate Capital, the Singapore-headquartered environment-focused investment firm, had invested $4.79 million (around Rs 37.5 crore) in the company in 2020 through its Circulate Capital Ocean Fund. The Ocean Fund followed up with a second round of funding in Lucro for an undisclosed amount in 2022.
The Ocean Fund invests in startups that solve ocean plastic crisis in South and Southeast Asia. Circulate Capital Ocean Fund has a corpus of $106 million with PepsiCo as one of the first Limited Partners (LPs) in the fund. Other LPs include major companies including The Coca-Cola Co, Unilever, Procter & Gamble, Dow, Danone and CHANEL.
In December 2023, Circulate Capital marked the final close of its Circulate Capital Ocean Fund I-B at $76 million, bringing its total assets under management to $255 million
Earlier this year, another Circulate Capital-backed firm, waste management company Srichakra Polyplast India Pvt. Ltd, raised Rs 80 crore ($9.2 million) in fresh capital from family office GreenGen Capital, Mission Street Pte Ltd, Niveshaay Alternative Investment Fund, and Action Tesa Family Office, VCCircle had reported.
