Published On:May 4 2024
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SLMG Beverages Joins Forces with Coca-Cola and Dalmia Packaging to Launch Recycling Plant in Joint Venture

SLMG Beverages, a prominent franchise bottler for Coca-Cola in India, is set to establish a PET bottle recycling plant in a joint venture with Coca-Cola India and Maharashtra-based Dalmia Packaging. The new plant, which will require an investment of ₹90-100 crore, will focus on recycling food-grade plastic and have an annual capacity to recycle 36,000 tonnes of plastic. The plant will generate 24,000 tonnes of recycled plastic specifically to produce PET bottles, contributing to about 20% of its sales.

SN Ladhani, Chairman and Managing Director of SLMG Beverages, noted that India is approaching a pivotal moment in its use of recycled plastics. "In the next couple of years, the government will mandate all plastic product producers to use recycled plastics in their production lines," he said. In many Western countries, recycled plastic usage rates reach up to 50%, while in India, SLMG expects this number to be around 30%.

Ladhani explained that earlier, recycled plastic wasn't deemed safe for food-grade products, but with advancements in technology from Germany, Japan, and the US, recycled plastics can now meet the same quality standards as virgin plastics. This opens the door for greater use of recycled materials across the industry.

A significant challenge in plastic recycling is the collection of discarded plastic bottles. To address this, SLMG is relying on its JV partner, Dalmia Packaging, which has experience in plastic sourcing for recycling. The plant location has been identified between Lucknow and Kanpur, with machinery orders already in progress.

"We have written to the central government for similar concessions extended to recyclers in other industries. We expect to start production within two years," Ladhani mentioned.

In its push to professionalize operations and potentially enter the capital market in the next 2-3 years, SLMG has appointed Coca-Cola veteran Costin Mandrea as CEO. Mandrea has ambitious plans for the company, aiming to optimize operations by assigning specific Coca-Cola beverages to each bottling plant and using artificial intelligence to streamline the transportation of finished goods.

SLMG Beverages is a significant player in India's beverage industry, with seven plants and a capacity to bottle 41 crore beverages daily across Uttar Pradesh. The company supplies 90% of Coca-Cola bottles in the state, handles Coke's entire demand in Uttarakhand, and maintains a presence in Bihar and Madhya Pradesh. It serves over 300 million people through 1.5 million outlets and has a network of more than 1,500 distributors across these four northern states.

HBL





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