Britain's Closed Loop Recycling, the Dagenham, England-based plastic bottle recycler, has been bought out of administration by a Dubai-based investment group, according to reports.
Euro Capital, which owns packaging interests in Birmingham, England, acquired Closed Loop in a pre-pack deal for an undisclosed sum, has renamed it Euro Closed Loop Recycling and pledged to invest in the business going forward.
Chris Dow, Closed Loop's chief executive, is staying on in the same role in the new venture, while the plant's 130-odd jobs are said to be secure.
Closed Loop is said to have gone into administration last week after suffering losses, driven in part by lower oil prices which have made recycled plastic less commercially viable.
It warned last month that it was facing administration since customers had cut back on buying recycled high density polyethylene material.
Wrap, the waste charity organization, had a crisis meeting recently to try and save the business in its then-existing form, but those talks appear to have come to nothing.
In a statement Dow said: “We are delighted that Euro Capital has come on board. The number one priority for us and our investors is to continue to support the Dairy Roadmap in the [United Kingdom].
“In the last eight weeks the industry has shown real commitment to recycled content. This deal offers the potential for the supply chain to meet this obligation of 30 percent recycled content, but this will only happen if the retailers enforce this through the whole of the supply chain.”
Closed Loop had invested heavily in its Dagenham plant, kicking off a 12 million pound ($18.3 million) development program in the second half of 2013.
However despite posting a 4 percent rise in sales that year to 15.4 million pounds ($8.2 million), according to the latest accounts filed with Companies House, the firm recorded a loss of 154,000 pounds ($234,000), due largely, it said, to high raw material costs. That figure compared with a profit in 2012 of 1 million pounds ($1.5 million).
According to trade website Resource Efficient Business Closed Loop's bank, Allied Irish, and investment outfit Foresight Group, which had financial interests in the company, are expected to be the main losers as a result of the pre-pack arrangement.
