IKEA acquires minority stake in Dutch plastics recycling facility

SPOKANE (Scrap Monster): IKEA, the furniture retailer has decided to acquire minority stake in a Dutch plastics recycling plant. The acquisition of 15% stake in Morssinkhof Rymoplast is part of company’s strategy to extend control across its supply chain. The investment is expected to help the company become more sustainable.

Pia Heidenmark Cook, Ikea’s acting chief sustainability officer noted that this is the company’s first investment with the recycling industry. The investment will help the company to source more high quality plastic as feedstock and secure the supply of recycled plastic. Further, the investment is intended to help the Dutch recycling plant to develop its capabilities. However, it is feared that major investments like the one by IKEA could lead to domination of entire supply chain, thereby hurting small companies operating in these segments. However, IKEA turned down the criticism, saying that the company has no plan to buy up recycling companies and that the current investment is in line with its approach to the circular economy. The company aims minimal usage of raw virgin materials, Cook added.

According to IKEA Group Sustainability Strategy for 2020, the company has committed itself to take a lead in turning waste into resources. The targets include developing reverse material flows for waste materials and ensuring that key parts of the company’s products are easily recycled. IKEA aims to have all plastic material used in its home furnishing products to be 100% renewable or recycled by August 2020. It is assumed that 90% of the company’s total sales value will come from home furnishing products. IKEA’s investment in the plastics recycling plant is based on this goal.

The investment by the Swedish furniture giant is the latest in the series of diversified business moves. It is considered to be a part of IKEA’s strategic plan to invest in innovative technologies and companies that could deliver positive sustainability and commercial benefits. In August last year, the company had invested in Romania’s forestry sector, taking over 12,800 hectares of forests in Iasi and Neamt counties through IRI Investments, the subsidiary that controls its portfolio of forests. IKEA currently controls nearly 50,000 hectares of forest land in Romania. In its ‘People and Planet Positive Sustainability Strategy for 2020’, the company aims to source 100% of its wood, paper and cardboard from sustainable sources. Prior to that, it had also invested in new wind energy project in Poland.

Morssinkhof Rymoplast is one of Europe’s largest producers of high grade recycled raw materials. With seven processing facilities across the Europe, the company is a leading supplier of regrinds, regranulates and compounds. The company focuses on recycling of PE film, HDPE, PP, PS and PET. It supplies recycled raw material to other companies, thereby helping to reduce their carbon footprint.

IKEA is a multinational group that designs and sells ready-to-assemble furniture, kitchen appliances and home accessories. It is the world’s largest furniture retailer since 2008. As of December last year, IKEA owns and operates 392 stores in 48 countries.