Investments: NexPoint invests in bioplastics firm PlantSwitch; BASF signs EUR5 bn loan facility to finance mega project in Zhanjiang

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US investment firm NexPoint has announced its investment of US$2 million in the early growth funding round of PlantSwitch, a bioplastics manufacturing company with a carbon negative production process that upcycles agricultural waste to produce biodegradable and compostable resins for single-use products. The investment is part of a total US$7.7 million raise in this early fundraise round, to which other institutional investors, along with NexPoint, subscribed.

PlantSwitch's mission is to "to replace all petroleum-based single-use plastic with plants" by manufacturing and distributing its uniquely compostable bioplastic resin. PlantSwitch's manufacturing process utilises agricultural waste products such as rice husks, wheat straw, and other cellulose rich byproducts in combination with a polymer to make sustainable bioplastics while upcycling agricultural waste.

In addition to its carbon negative production process, PlantSwitch's bioplastics are cheaper to produce and more compostable than comparable bioplastics, it claims. PlantSwitch, which was founded in 2020 by SMU Graduates Dillon Baxter and Maxime Blandin, has also recently closed on a 52,000-sq-ft manufacturing facility in Sanford, North Carolina, which will increase its production capacity.

NexPoint identified PlantSwitch at this early stage by leveraging its research capabilities and extensive network, and its investment demonstrates the firm's continued commitment to environmentally sustainable investment standards and support of early-stage companies with uncorrelated potential. NexPoint's investment, and this fundraise generally, will help the company continue to scale its production capacity, increase its marketing capabilities and help deliver products to existing and future customers.

PlantSwitch recently entered framework contracts with several nation-wide restaurant and grocery store chains which it will begin supplying as early as next month. As PlantSwitch scales, its founders expect growing its full-time workforce to over 50 employees by the end of 2024 and anticipate needing additional manufacturing space in the next few years.

"Some studies forecast bioplastic demand increasing from 4.9 billion pounds in 2022 to almost 13.9 billion pounds in 2027,” remarked Dillon Baxter, Co-founder/CEO PlantSwitch, "With that kind of demand increase, PlantSwitch's biggest priority is sustainable growth. We are confident that our product, our supporters like NexPoint, and our distinguished board can help PlantSwitch scale in a deliberate way that allows us to take advantage of demand conditions."

PlantSwitch has also recently received a US$4.94 million federal grant from the department of agriculture in the US.

In other news, German materials firm BASF says it is taking advantage of the currently low interest rate environment in China and has signed an approximately EUR5 billion syndicated bank term loan facility with a maturity of 15 years for its new site in Zhanjiang. The new site is currently under construction in Guangdong province. The loan will be provided by major Chinese banks and offers flexible repayment options to optimize BASF’s cash utilisation.

BASF is financing the new site with a combination of around 20% equity and 80% debt.

“By signing this bank term loan facility, BASF is implementing its strategy to finance the Zhanjiang project with funds from China,” said Dr. Dirk Elvermann, Chief Financial Officer of BASF SE. The company’s financial strength and proven track record of strong sales and earnings growth in China enabled BASF to obtain highly attractive financing conditions for the loan.

The Zhanjiang site is a major investment of BASF with up to EUR10 billion. It will be operated under the sole responsibility of BASF and will be the company’s third largest site worldwide, following Ludwigshafen, Germany, and Antwerp, Belgium.


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