DEG invests in biodegradable packaging firm

30th March 2017 Jack Aldane

DEG, Germany’s development finance institution, has issued €500,000 to support the manufacture of eco-friendly packaging made from banana tree bark, pineapple and tomato plants.

Bio-Lutions is the biodegradable packaging company based in Hamburg that will use the funds to scale up its business in accordance with the German Federal Ministry for Economic Cooperation and Development (BMZ)’s Up-scaling programme. DEG and BMZ have together provided €4.5 million for the programme.

Christiane Laibach, member of DEG’s management board, said: “Bio-Lutions’ novel method for producing packaging material allows [the company] to offer a viable, eco-friendly alternative to plastic packaging.”

The company takes organic matter from tree bark and other plant life and reduces it to fibres that bind when mixed with water. Bio-Lutions packaging does not require chemical additives for production. Biodegradable packaging could become an alternative to plastic in India, where the government has imposed a ban in specific federal states.

DEG’s Up-scaling programme channels investment towards small and medium-sized enterprises (SMEs) that want to expand businesses with high developmental impact. Companies with financing needs that straddle microfinancing and more traditional, commercial lender financing are its primary target.

Testing of the product was carried out at a Bio-Lutions pilot plant in China before its operations moved to India in 2016, following the state ban on certain plastics.

The industrial plant that aims to produce only carbon-neutral products is planned for construction in Bangalore, India’s federal state of Karnataka. Bio-Lutions plans to partner with smallholders in Bangalore who can earn additional income from supplying organic matter to the plant. Bangalore produces copious agricultural waste due to its fertile land, which produces four harvests per year.

Eduardo Gordillo, managing director of Bio-Lutions, added that funding through the Up-scaling programme would allow the company to “considerably boost its production capacity in India, and thus make an important contribution to sustainable development there”.

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