Indonesia's Bumi Baru Plastik plans polyolefin recycling capacity expansion: exec

Indonesia's PT Bumi Baru Plastik (BBP) plans to expand its recycling capacity, co-founder Kunal Nathani told Platts, part of S&P Global Energy Oct. 16.

Bumi Baru Plastik is an Indonesia-based polyolefin recycler, relying predominantly on post-consumer feedstock, which is 100% locally sourced.

According to Nathani, BBP's current production capacity is 600 metric tons per month and is set to increase to 1,600 mt/month by Q1 2027, and subsequently to 2,600 mt/month by Q4 2027.

Nathani said that the capacity expansion project will be partially funded by an investment of an undisclosed amount from Circulate Capital.

"With the additional capacity, we will see additional profitability ... it unlocks the capital to develop deeper engagement with feedstock suppliers and customers," Nathani said.

He added that BBP also plans to direct the investment toward improving its water treatment system. "We are trying to keep our water [usage] in a closed loop as much as possible," Nathani said.

Nathani expects that the capacity expansion will also enable BBP to expand into export markets.

"For now, we are solely focused on the domestic market as 100% of our output goes to [fulfilling] domestic demand ... [establishing a regional presence] is a visible path in the next 12-24 months," Nathani said.

Looking ahead, Nathani anticipates that the recycled polyolefins market will continue to be primarily cost-driven in the near term.

"The ESG side of things have taken a backseat for the past couple of years, now it is very much about a cost metric," Nathani said.

"Everything links to US and European policy, which is now very oil friendly ... sustainability is not [seen as] very critical, and large corporations have adjusted their stances based on that," he added.

While uncertain about the global sustainability agenda due to current geopolitical volatility, Nathani remains optimistic about the recycling industry in the long run. He signaled a readiness to supply customers where demand exists.

"Now we are just on our surfboards, waiting to ride the wave when it comes," Nathani said.