Stockholm (NordSIP) – In a significant move for the circular economy, Ingka Investments (the investment arm of Ingka Group, which operates around 90% of IKEA’s global retail business) has made its first-ever circular investment in China by injecting growth capital into Shanghai-based Re-mall, a post-consumer plastic recycler.
Re-mall specialises in recycling consumer packaging waste and employs proprietary techniques to produce highly transparent recycled polypropylene (rPP)—a rarity in the global plastics recycling industry. These premium-grade pellets are used to manufacture products such as containers, tableware, toys, cosmetics packaging, and woven textiles for leading brands. The company operates a facility in Jiangxi province, strategically positioned to source plastic feedstock from major urban centers in the Yangtze and Pearl River Delta regions.
This is the first Chinese company to join Ingka Investments’ Circular Investment portfolio, established in 2017 with a clear mandate: invest in technologies and capacity expansions targeting materials where recycling infrastructure is insufficient, including plastics, textiles, mattresses, wood, and food waste. Earlier this year, Ingka revealed plans to commit €1 billion toward recycling infrastructure globally, with a focus on building mass circularity and reducing millions of tonnes of CO₂ emissions. This latest move into China aligns seamlessly with that strategy.
“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,” Lukas Visser, Head of Circular Investments at Ingka Group, said, underscoring the strategic impact.
From the China leadership, Pontus Erntell, President & Chief Sustainability Officer at IKEA China, framed the decision as part of a longer-term vision: “This investment by Ingka Investments demonstrates our long-term commitment in China. … The scale and innovation capabilities here in the Chinese market create significant opportunities for this transformation.”
“We are happy to welcome Ingka Investments as a strategic partner in our mission to accelerate the circular economy in plastics … Together, we aim to transform plastic waste into valuable resources, contributing to a cleaner planet and a more responsible future,” added Re-mall’s CEO, ZHU Kuan.
While the deal is widely framed as a sustainability milestone, questions remain over the scale of its potential impact. China generates over 80 million tonnes of plastic waste annually, and even with Re-mall’s planned expansion, its output is likely to remain modest in proportion to the size of the challenge. Without parallel reductions in virgin plastic production, both within IKEA’s supply chain and the broader consumer goods sector, the long-term effect on overall plastic waste volumes may be limited.
Another consideration lies in the consistency and quality of recycled feedstock. Producing high-grade recycled polypropylene requires clean, well-sorted waste streams, which can be difficult to source reliably in many parts of China. This, combined with market volatility, poses a challenge to economic viability. Virgin plastics, especially when oil prices are low, can be significantly cheaper than recycled alternatives, raising questions about the sustainability of market demand without strong policy incentives.
The investment also invites scrutiny over the risk of “circular washing”, in other words using recycling initiatives to enhance environmental credentials without addressing the root causes of overproduction and overconsumption. Transparent lifecycle data, including emissions, water use, and energy consumption from the recycling process, will be crucial in substantiating environmental benefits. Moreover, the Chinese waste management sector is subject to shifting regulations and geopolitical pressures that could influence foreign investor operations.
Finally, for IKEA, this move will be judged not only on its financial and environmental returns but also on whether it is complemented by design and material-use strategies that reduce the company’s reliance on plastics altogether. These questions do not diminish the strategic importance of the investment, but they do highlight the complexity of transitioning to a truly circular plastics economy—especially in markets with fragmented recycling systems and dynamic policy environments.
This article was written with the help of AI; edited and fact-checked by the NordSIP team.
