Ingka Investment expands into China as recycling market innovation capabilities grow

Ingka Investments, the investment arm of Ingka Group, IKEA’s largest retailer, has announced a growth capital investment in Shanghai Re-mall Environmental Protection New Material, a recycler of post-consumer packaging waste in China.

This marks the first Chinese investment for Ingka Investments in its Circular Investment portfolio and complements its existing minority holding in Morssinkhof Rymoplast, a European recycling company that limits carbon footprint through plastic recycling.

Pontus Erntell, president and chief sustainability officer at IKEA China, says: “This investment by Ingka Investments demonstrates our long-term commitment in China. To meet our customers’ needs for generations to come, we have both the responsibility and the opportunity to take a lead in accelerating the circular economy beyond IKEA, and the scale and innovation capabilities here in the Chinese market create significant opportunities for this transformation.”

Tackling challenges

Re-mall produces transparent recycled PP (rPP) using proprietary technology, offering materials for applications including storage boxes and containers, tableware, toys, cosmetics packaging, and woven textile products. Its recycled plastics are incorporated into blue-chip companies’ products.

The recycler aims to overcome challenges faced by the plastics recycling sector, including contamination from food residues and labels, degradation of material quality across recycling cycles, high processing costs, and volatile market demand, which can slow the adoption of recycled materials.

The investment will support Re-mall in increasing its recycling capacity and developing new products.Ingka Group is focusing on materials with high carbon footprints and limited recycling infrastructure. The move aligns with Ingka’s strategy to invest in companies that prevent waste or supply of recycled materials.

Lukas Visser, head of circular investments at Ingka Group, says: “Re-mall’s strong supplier network and partnerships with leading Chinese food delivery service providers are already allowing them to create impact at scale for the local recycling market. By investing in Re-mall, we want to amplify this impact to help address a global plastic waste problem and contribute to the circular economy transition.”

Zhu Kuan, CEO of Re-mall, adds: “This marks a milestone in our journey to scale sustainable solutions globally. Together, we aim to transform plastic waste into valuable resources, contributing to a cleaner planet and a more responsible future.”

Technology development

Re-mall produces premium-grade post-consumer rPP and is exploring and building closed-loop solutions with their value chain partners. It is also producing highly transparent pellets from post-consumer food packaging waste at scale.

The Chinese company uses physical recycling to convert polyolefin food packaging waste into plastic with properties similar to virgin plastic. It has developed automated sorting equipment for packaging waste, combining visual recognition with digital systems to boost sorting efficiency.

Re-mall shares that during the processing stage of physical recycling, “through deep cleaning, high-precision sorting, melt filtration and other processes, the quality and safety problems of traditional recycled materials are solved.”

“The new collaboration will accelerate the development of a high-quality circular economy in the plastics sector. Together, we aim to drive innovation and sustainable development globally.”