Dialog to venture into post-consumer plastics recycling industry
11 Aug 2021
Oil and gas player Dialog Group Bhd’s is planning to venture into the post-consumer plastics recycling industry, its first investment in the downstream petrochemicals business.
In a stock exchange filing today, Dialog announced that its wholly owned Dialog Corporate Sdn Bhd inked a memorandum of understanding (MoU) with Diyou Fibre (M) Sdn Bhd (DFMSB) yesterday (Aug 10), which outlines an understanding between the parties to set up a special purpose vehicle (SPV) that will build, own and operate a food-grade recycled polyethylene terephthalate (recycled PET) pellets production facility.
The facility will use recycled PET flakes as raw material to produce food-grade recycled PET pellets. “The SPV will sell food-grade recycled PET to food and beverages customers,” Dialog said.
Dialog said it will have a 51% equity interest in the SPV, while DFMSB will hold 49%. According to Dialog, DFMSB is an established recycling and manufacturing company in Malaysia, with over 30 years of experience in the post-consumer plastics recycling industry.
The total investment outlay in the venture is estimated to be about US$25 million (about RM106 million), which Dialog plans to finance using internal funds and borrowings.
“The proposed venture will serve to meet the increasing demand for food-grade recycled PET materials resulting from the drive by the international community to support a circular economy,” it said, adding the recycling of plastic wastes into feedstocks for the production of packaging materials for the food and beverage industry under this MoU further supports its initiatives and contribution towards making a positive impact on the environment.
“The proposed venture will be a continuation of the initiatives by Dialog to achieve business sustainability and to fulfil its environmental, social and governance (ESG) agenda through commercially viable ventures.
“Dialog remains committed to its core values and key strategies of a sustainable business by capturing opportunities and mitigating risks through its diversified portfolio,” it added.
Dialog’s share price closed two sen or 0.78% higher at RM2.59 today, giving it a market capitalisation of RM14.62 billion.
Source: The Edge Markets
