<article><p class="lead"><i>France-based polymers trading company Emeraude <a href="https://direct.argusmedia.com/newsandanalysis/article/2227321">recently invested</a> in UAE-based recycled fabric manufacturer DGrade to facilitate its expansion into the recycled polymers market. </i></p><p><i>DGrade collects post-consumer polyethylene terephthalate (PET) bottles and uses them for producing recycled PET (rPET) at its plant in the Khalifa Industrial Zone Abu Dhabi (KIZAD). The rPET produced at the site is then used for manufacturing recycled fibres and goods, such as clothes and face masks. DGrade also plans to begin supplying rPET flakes and rPET pellets to customers in the fourth quarter of this year.</i></p><p><i>Benoit de Chanaleilles, managing director of Emeraude Green and sales director of Emeraude, tells Argus about the company's plans.</i></p><p><b>How is Emeraude's recent investment in DGrade structured and what's the strategy driving it? </b></p><p>The investment structure information is confidential at this point. Our strategy is to get our first footprint in rPET production. The production capacity of the plant is 20,000 t/yr, mixed between rPET from bottles and rPE from caps and closures. Our initial target regions are the Middle East and Europe.</p><p><b>Can you give more details and some background on Emeraude's expansion into recycled polymers?</b></p><p>Emeraude has been involved in promoting the reduction of thickness of plastic films for more than 20 years. Therefore, optimising plastic formulations and uses are part of our DNA. We have been involved in the rPE business. Collaborating with DGrade will give us a break into rPET business.</p><p>Our global strategy is to invest and promote all kinds of recycled materials. We wish to expand our product portfolio to all recycled polymers and reach a full range of recycled polymers.</p><p><b>What growth rates do you expect in recycled polymers and how much of your overall polymers business could you see it becoming?</b></p><p>According to the latest studies/market intelligence we work with, we sense that growth in the recycled polymers business will outpace that in the virgin polymers quite significantly, due to changing consumer behaviour, legislations and brand owners' commitment to integrate more and more recyclates. </p><p>Consequently, brand owners are looking for solutions to change their packaging conception and formulation. At this point so far, a lot of their pledges won't be achieved due to a lack of availability of high-end recycled materials, putting a lot of pressure on market demand. </p><p>Partnering with DGrade allows Emeraude to get into the manufacturing part of rPET, controlling the source. The intention is to learn fast about this business and on a longer term, and duplicate this business model in other territories where Emeraude operates. </p><p><b>What are your customers telling you about how their needs for recycled or more sustainable products are growing?</b></p><p>Our current customers — converters — are quite conservative in using recycled polymers due to its quality control and because of a lack of visibility on regularity of this new supply. Would it work on their production lines without any contamination/damage? Would it be food approved? These are the main questions we are facing.</p><p>There is a tremendous amount of work going on in detecting and promoting the right recyclables for the right application. We do believe that, thanks to our technical knowledge and experienced teams across the globe, we will be able to find the right partners in recyclates production that we will promote within our customers.</p><p>In the recent past, recycled polymers were used to lower production costs. Today, the market is changing. There is a shift from low-end to high-end quality. There is a need for high added value recycled plastics.</p><p><b>How do you see the take up of recycled polymers in emerging countries, where Emeraude has historically specialised? </b></p><p>For the time being, in emerging countries the main purpose of using recycled polymers is still to reduce the cost of production. We are confident that this trend will change in the near future and the demand for recycled polymers will increase due to international brand owners' commitments, consumer behaviour changes and local legislations will evolve to support this change.</p><p><b>How do trading margins for recycled polymers fare against those for virgin polymers?</b></p><p>In the long run, we expect to have equivalent margins for both recycled and virgin polymers. However, in order to reach that level, a lot of investment is necessary in the development of recycled polymers. There are still a lot of studies and testing to be completed in order to establish the trade regularity.</p><p><b>What are the biggest challenges you see for growing the share of recycled polymers in the global polymer markets?</b></p><p>One of the biggest challenges is the feedstock. Another big challenge is to reach the desired quantity with high regular quality.</p><p><b>What impact will new global virgin polymer capacity coming online have on the demand and economics for recycled polymers? </b></p><p>This will create new opportunities. Virgin and recycled polymers answer to different demand segments and applications. Providing both will allow us to have a better coverage of these businesses. We see recycled polymers as an additional business, not as a replacement.</p><p><b>Do you see opportunities for Emeraude in areas such as circular polymers from chemically recycled feedstock or bio-feedstock based polymers?</b></p><p>We do believe that chemically recycled feedstock will be produced by the main petrochemical industry players and we will be involved in promoting these products to our customers. Bio-feedstock based polymers are still new to us, but we are looking for opportunities to partner and promote efficient products in this field too.</p><p><b>Emeraude described itself as the "responsible polymers distributor". Can you expand on what this means to you and what other initiatives support that?</b></p><p>We believe in plastic's value even once it has been used. Our intent is to promote a circular economy and the four Rs in the plastic industry: Reuse, Reduce, Recycle and Reshape.</p><p>We also believe that we can accelerate this transition toward a more circular economy — we need to create awareness in and educate the younger generations. Initiatives like "Simply Bottles" by DGrade and "Protect your Planet" by Emeraude [awareness programmes in schools in Africa, the Indian subcontinent and the UAE etc] in association with local organisations when available, are examples of our local actions. Concretely, it's more than 300 schools reached in the last five years. </p><p>It's part of our sustainability strategy, in addition to our recycled products offering and investments in recycling initiatives.</p><p class="bylines">By Sam Hashmi</p></article>
