Page 47 - Plastics News May 2023

BUSINESS NEWS

ReCon2 Announces Partnerships with Sourceful Taking the Pulse of
and Bright Green Plastics
Plastics Industry M&A
Activity

Despite a challenging environ-
ment, buyers are still out there.
Deals are dependent on a com-
pany’s business performance
and the economic health of its
Recon² – a not-for-profit start-up company out of the University of end markets.
Manchester, UK – has partnered with On-Pack Recycling Label (OPRL)
Ltd and a cohort of sustainability-focused companies to further develop hile the plastics market is
a patent pending technology for quantifying recycled content in plastic Wfacing uncertainty fueled by
products and packaging. Sourceful and Bright Green Plastics are the inflation, interest rate hikes, and
two latest companies to join the cohort – which also includes ProAm- geopolitical issues that concern
pac, Reckitt, and Kraft Heinz. businesses and investors alike,
there is still significant demand for
urceful and Bright Green Plas- scale for HDPE, LDPE, PP and PET – high-quality companies from both
Otics will work with Recon² and can be assessed reliably, independent strategic and financial buyers, but
the University of Manchester to begin of processing steps, additives, and not all companies will be equally af-
trialling the technology on an industri- product type. The tracer molecule is fected by the challenging environ-
ally relevant scale across a number of also FDA and REACH approved and is ment.
packaging formats, such as flexibles invisible under ambient lighting. Is M&A activity still strong?
and bottles. At present there are no In conjunction with Recon², OPRL
widely available technologies that can are co-developing a trust mark certi- There has been a slowdown in
analytically determine the recycled fication and auditing system to inform M&A activity recently, given the
content of a plastic item. As new leg- customers about the post-consumer uncertainty in the markets, but for
islation in the EU and UK – such as recyclate (PCR) levels in plastics. business owners looking to exit,
the UK’s plastic tax – come into force, Recon²’s core technology explored the relevant information is their
such testing and assurance methods in these pilot trials will underpin this business’ performance as well as
will become critical. certification, thereby increasing cus- the health and outlook of the end
Recon² works by incorporating min- tomer confidence in products that markets that the company serves.
ute quantities of fluorescent “tracer” claim to meet important sustainability In addition, the ability for buyers
molecules into the plastic structure. targets. to raise capital for acquisitions is
These molecules enable the direct Wing Chan, CEO and Co-founder more difficult and more expensive
quantification of recycled content in of Sourceful, said: “We’re excited
plastics with a quick scan directly on to partner with Recon²to make this in the current environment, which
the surface, aiming to prevent any ground-breaking technology acces- is a further drag on the overall
wasteful additional processing steps sible to climate-conscious brands of M&A market. Specifically, the cost
and keeping costs low and speed all sizes. Investing in technologies like of capital for acquisition financing
high. The cohort claims that within this is critical to building transparency is meaningfully higher than it was
minutes, the recycled content of any and confidence in supply chains.” a year ago, which can have an im-
plastic product – thus far proven at lab pact on a buyer’s ability to meet a
seller’s value expectations.
PLASTICS NEWS 47
May 2023