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IPO Watch: Close the Loop becomes the latest sustainable packaging company on the ASX, gains 55pc
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Close the Loop (ASX:CLG) is one of over 150 companies to IPO on the ASX in 2021 but is one of only a handful of ASX companies in the sustainable packaging space.
The company listed on the ASX is actually a merged entity comprising of the original Close the Loop company – a resource collection and recycling company that recycles plastics – and OF Packaging, which provides packaging solutions.
Close the Loop raised $12 million at 20 cents per share and closed 50% higher on its first day.
Close the Loop (ASX:CLG) share price chart
ASX IPO ‘the start of a tremendous journey’
Speaking with Stockhead on his way to ring the bell at the ASX headquarters, Close the Loop CEO Joe Foster said it was a big day but there was a lot to look forward to post-IPO.
“It’s pretty exciting all around here at the moment,” he said.
“Raising capital allows us to take this new business on a journey, a journey towards making it successful and concentrating in the circular economy as we see some great opportunities.
“We’ve identified some key equipment that we’re going to purchase to focus on e-waste. We’ve also identified some key businesses for acquisitions and also we’re looking at some additional equipment for the North American business.
“We believe the listing on the stock exchange is going to bring the start of a tremendous journey.”
Foster says his company has benefited from increasing awareness about the environmental damage caused by landfill waste, particularly plastic and initiatives by governments requiring recyclable packaging.
“APCO – an Australian Government initiative – has issued a target by 2025 to have all packaging recyclable, reusable and compostable and 70% of all plastic must be recyclable with recyclable content up to 50%,” he said.
“Sustainable packaging has been number one target for a long time and we’re happy with the regulatory tailwinds in Aus and around the world which has helped us put the message out and all get involved in the circular economy.”
Other sustainable packaging companies?
Close the Loop is not the only company in the sustainable packaging and recyclable plastics space.
Another is SECOS (ASX:SES). Although this company is more focused on end products plastics are used in – with dog waste bags being one example – it has also seen solid demand for its products and more than tripled in the last two years.
Among other stocks, Integrated Green Energy Solutions (ASX:IGE) recycles plastics and turns the residue into road-ready fuels. Leaf Resources (ASX:LER) produces sugars from biomass that could replace the petrochemicals used in plastic bags.
