Recent M&A activity in the Recycling Industry may Indicate a bullish 2022

An Israeli company has created and proven the success of an innovative one-step plastic bag recycling process that is eco-friendly and profitable. Alkemy (TSXV: AKMY) (TSXV: AKMY.WT) has emerged in recent years as the leader in plastic recycling by turning plastic waste into profit. A recent acquisition of Oceansix, a German-based company specializing in developing technologies and product solutions from recovered materials, has set Alkemy on a path to significant global expansion and growth.  

Recycling Plastics

Plastic waste is a worldwide problem, with 91% of plastic remaining unrecycled due to economic feasibility. Unrecycled plastic waste is destroying the planet by polluting water sources, with more than 8 million tons of plastic leaking into the ocean each year, where it breaks down into miniscule pieces. These particles of plastic have recently been discovered in the air, water, soil, animals, fish, and even the human body.  

Five trillion plastic bags are being produced internationally each year and left in dumpsites, with no sign of slowing down. In the next ten years, it is predicted that plastic will continue to be produced at a significantly faster rate. Alkemy has created a process to turn that waste into usable products including industrial-grade surface protection and sealing systems for a wide range of uses.

Alkemy

K.B. Recycling Industries Ltd, doing business as Alkemy, an environmental technology company founded in Israel, has redefined recycling with advanced plastic mining solutions. The company has created a unique process to recycle plastic bags and sheets that had previously not been considered viable for recycling, making them the first company to mine a pollutant for raw materials

Alkemy’s sustainable process allows the company to use plastic waste to make the finished products at half the cost of traditional methods, yielding 30% operational margins. Alkemy’s one-step process is called “waste-to-product” and produces marketable finished products, currently focused on the construction disposable plastic product market.

In the company’s first three years of operations, they were able to secure 70% of the market share in Israel with their first product line. The construction plastics market is expected to be valued at $125 billion by 2026, with Alkemy being the leading manufacturer in that growing market. The company will also be able to enter numerous other markets as they begin to manufacture a variety of other products, including all finished plastic products where virgin plastic is not mandated by quality requirements.

Recent Mergers and Acquisitions

Alkemy is making strategic moves to expand its market share into new regions. One recent move Alkemy has set into motion is an acquisition of Oceansix, a German-based environmental technology company. The promising agreement will provide Alkemy with a significant footprint in the European market.

Oceansix has agreed to introduce Alkemy to European customers, provide market analysis, advise on research and development, and provide potential locations for future production sites. Together, the companies will bring new focus to the development, production, and sale of finished plastic goods. The new products will be extruded from plastic films recovered from plastics used by consumers, creating innovative solutions to the problem of plastic waste in Europe.

Alkemy plans to establish factories worldwide through co-investment with global recycling companies. Alkemy will bring to the table their unique knowledge and processes as they aim to set up more plants at dumping sites. The company, with the help of acquisitions and partnerships, will be able to tap into a gigantic supply of raw materials that can be processed for economically viable plastics.

Market Impact

Unrecycled plastic presents a huge challenge for the world, and current recycling industry practices contribute little due to a lack of profitability. Alkemy offers a real and profitable solution to this global problem. The company is growing and expanding into a market where demand is at an all-time high because governments are setting aggressive plastic recycling targets, including the European Union’s mandate that all member states recycle 50% of plastic by 2025.

Alkemy has set their sights on being able to recycle 99% of the plastic that goes into dumps. Their recent acquisition of Oceansix represents the amplification of a strong growth trajectory for the company that is likely to increase as their global footprint expands.

Conclusion

Alkemy’s unique process for reducing the burden of toxic waste while maintaining profitable operations sets them apart from competitors in their industry. Their innovative technology and recycling processes are growth engines that will ensure the long-term growth of both the company and the sustainability industry as a whole.

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