Norfund, the Norwegian government’s primary investment vehicle for developing countries, has committed US$4 million to expand industrial polyethylene terephthalate ( PET ) recycling capacity in Vietnam, supporting Circular Plastics Company ( CPC ) as it scales food-grade recycled plastic production for domestic and export markets.

The fund assists businesses that create jobs, reduce poverty, and advance the transition to net zero in emerging markets. Its latest equity investment, while apparently modest, will finance capital expenditure and working capital for CPC Vietnam’s recycling plant. The facility, located outside Ho Chi Minh City, currently has an annual capacity of 31,000 metric tonnes of recycled PET flakes and 14,000 metric tonnes of food-grade recycled PET pellets.

The recycled material has been processed to meet strict safety and purity standards, enabling its reuse in food and beverage packaging, including new water or soft drink bottles.

Global demand for recycled PET is rising rapidly as manufacturers seek to reduce emissions and increase recycled content in packaging. In Vietnam, only about half of the PET bottles are estimated to be collected. That being the case, boosting recycling infrastructure is seen as critical to reducing plastic pollution and building a sustainable circular economy.

Commenting on the investment, Norway’s minister of international development Asmund Aukrust, says: “By scaling industrial PET food-grade recycling in Vietnam, Norfund’s investment is contributing to job creation and the reduction of plastic pollution. The investment shows how early-stage capital can help crowd in private financing for scalable, sustainable solutions.” 

CPC launched its first Southeast Asian recycling operations in 2019 and has been building its presence in Vietnam since 2023. The investment is structured through Singapore-based holding company Circular Plastics International. Vegard Benterud, investment director at Norfund, says CPC has demonstrated its ability to deliver large-scale facilities on time and on budget.

“Vietnam is at a pivotal moment in building a stronger circular economy,” CPC Vietnam chief executive officer Ruby La notes, adding that the investment will enable further capacity expansion and long-term industrial development.

By increasing PET recycling rates, the project is expected to reduce carbon dioxide emissions relative to virgin plastic production, while supporting job creation and strengthening sustainable value chains in one of Southeast Asia’s fastest-growing manufacturing hubs.