- ALPEK informed it has acquired CarbonLite LLC's PET recycling and pelletizing facility in Reading, Pennsylvania, US
- It adds around ~40% to the installed capacity of rPET, and reaffirms Alpek as the largest PET recycler in the Americas
- We reiterate our BUY rating, in light of a favorable environment along with shareholder value creation strategies
ALPEK informed that it has acquired CarbonLite LLC's PET recycling and pelletizing facility in Reading, Pennsylvania, US. The transaction represented an investment of US$96 million (~4% of the company's market value), with no debt, and subject to customary conditions precedent.
CarbonLite's Reading site is completely outfitted with brand new equipment, including state-of-the-art curbside bottle handling, wash lines and a solid-state polimerizer, which enables production of food-grade pellet which is needed for bottle-to-bottle recycling. The site has a bottle-to-flake and flake-to-pellet capacity of 115,000 tons and 49,000 tons, respectively, making it the largest integrated rPET facility in the Americas. The site is expected to conclude its commissioning process and begin production ramp-up in 3Q21.
POSITIVE implication: We consider this to be favorable news for Alpek, since it not only adds around ~40% to the current installed capacity of rPET to 394,000 tons, but also reaffirms Alpek as the largest PET recycler in the Americas and achieves the goal of supplying customers with 25% rPET content by 2025. Likewise, this strategy is aligned with the Company's long-term strategic growth plan pillar of fostering a Circular Economy. We reiterate our BUY recommendation, in light of an environment that continues to be favorable, hand in hand with long-term shareholder value creation strategies.
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