Spanish textile recycler Recover has secured a new $100 million in minority equity capital investment with a view to accelerating its global expansion.
The sustainable investing business within Goldman Sachs Asset Management (Goldman Sachs) alongside majority shareholder STORY3 Capital Partners led the funding round.
Recover will also use the investment to boost its production capacity, allowing more rapid adoption of sustainability initiatives by leading brands and retailers.
Recover serves some of the largest and most recognisable retailers, brands and vendors in the world, including, among others, Primark, Inditex, C&A, Revolve and Lands' End, according to a recent press release.
Recently, Recover has announced the official opening of its new facility in Bangladesh to expand its manufacturing capabilities and accelerate its efforts to transform the fashion industry.
Recover's proprietary recycled cotton fibre reduces the carbon and water intensity of the apparel supply chain, addressing the apparel sector's contribution to one of the world's largest sources of environmental degradation.
Recover estimates that the new investment places it on a path to increase its production to over 350,000 tonnes of recycled cotton fibre per year by 2026, saving up to 5 trillion liters of water annually - equivalent to the drinking water consumed by over 4.5 billion people each year - and allowing for significant reductions of carbon emissions, energy and land use relative to conventional cotton fibre, based on industry research.
"We are excited to invest in Recover's growth to accelerate scaled production and the continued development of its technologies," said Letitia Webster, head of Sustainability for Private Investing at Goldman Sachs Asset Management Division.
As part of the transaction, Webster will join the Board of Directors of Recover.
"Recover is helping create a sustainable future by solving a colossal environmental issue and we are overjoyed to partner with Goldman Sachs to accelerate our growth," said Alfredo Ferre, fourth-generation family steward and CEO of Recover.
Ben Malka, operating partner at STORY3 Capital Partners and executive chairman of Recover, stated, "Recover has perfected the art and science of scaled production of sustainable recycled cotton fibre over more than 70 years across multiple generations of the Ferre family in Spain. Today, Recover offers a solution grounded in proprietary IP that provides cost-competitive, maximum-performance recycled cotton fibre for both rotor and ring-spinning applications."
Operating in the $50 billion cotton market, Recover is a leading innovator and category-defining business that has experienced rapid growth. The company has opened new manufacturing hubs in Pakistan and Bangladesh, with additional hubs in Bangladesh and Vietnam due to open in the near term.
"For change to happen at scale across the fashion industry, we need partnership and collaboration with innovators like Recover," said Lynne Walker, director of Primark Cares, Primark.
"As we increase the use of Recover's recycled cotton fibre in Primark products, this investment will enable us to meet our pledge to make more sustainable fashion affordable to millions of customers," she added.
Peter Comisar, managing partner of STORY3 Capital Partners and former partner of Goldman Sachs, said, "We are incredibly proud that our collaboration with Recover has enabled the business to dramatically scale since our acquisition in 2020. Over the coming years, we will see radical transformation of large industries with sustainable solutions. Recover is uniquely positioned to be the global leader in sustainable cotton fibre and we are excited to partner with Goldman Sachs on the next phase of Recover's evolution."
What opportunities in Bangladesh
The Spanish recycled cotton fibre producer Recover came forth with this initiative as being the second largest apparel exporter, Bangladesh produces about 4 lakh tonnes of garment cutting waste annually, which is locally known as "jhut", of which, only 5% can be recycled at four mills, according to industry insiders.
This garment waste has gradually been gaining a foothold in the apparel world because of its usefulness in manufacturing high-end items. Most global fashion brands are now shifting to recycled yarns in producing apparel products. Such items produced from recycled yarn hold only 5% of the global market.
The global fashion giants H&M and Inditex have set goals of using 100% recycled or sustainable fibres by 2025-30 in readymade garment production.
According to the company website, it is the second out of three recycle hubs for this company, where it has plans to set up another six recycle units.
The Bangladesh facility comes fully equipped with Recover's proprietary machinery, as well as RColorBlend installation, Recover's innovative technology that provides fibre blends with colour, with a lower environmental impact, said a press release.
Located in Dhaka, the new manufacturing hub is an integral part of Recover's strategy for growth and scalability with its recent partnership with STORY3 Capital, a leading alternative investment manager. This new facility helps Recover support the surging global demand for sustainable fibres, and circularity in the textile and fashion industry.