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DOW Enters Into Partnership to Launch Recyclable Food-Contact Film

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Dow Inc. (DOW - Free Report) and Bolloré have partnered for a pilot project for using recycled content in new food-contact packaging applications, which can again be recycled after use.

Bollore’s OXBTEC_RCB (Recyclable Circular-Based) barrier shrink film uses Dow’s high-quality circular polymers that are sourced from a feedstock made from 100% plastic waste and are developed using advanced recycling. The pioneering technology breaks down used plastic and then re-polymerizes it into virgin plastic that can be used in new food-contact applications.

This gives a new value to plastic beyond its shelf-life by redirecting it from landfills and incineration. Additionally, the barrier shrink film supports the fight against food wastage by prolonging the shelf-life of food. The product has been granted the BRC accreditation for all its phases, from manufacturing and distribution and has met all hygiene and safety regulations. The advanced recycling processes also come with the advantage of reducing roughly 1.5 tons of carbon dioxide per ton of plastic recycled compared to incineration of un-recycled plastics.

The path-breaking film is to be first launched in the U.K. in September 2021. Yorkshire Packaging Systems, a long-established partner of Bolloré, will exclusively distribute the product. Cranswick, a leading supplier of meat and poultry, will also incorporate it into its packaging of its whole bird products.

Dow is enthusiastic about the partnership with Bolloré, Yorkshire Packaging Systems, and Cranswick to launch the revolutionary product. It is highly dedicated to taking significant strides to accelerate a circular economy for plastics, as well as to fulfill the EU’s target of converting all plastic packaging into reusable content by 2030. With the partnership, Dow takes another leap forward in realizing its circularity goals introducing more packages containing circular polymers derived from plastic waste.

The launch of the shrink film is another vital step in Dow’s efforts to meet its new-set sustainability targets, which include reducing net annual carbon emissions by 15% from its 2020 baseline by 2030. The company is also enabling 1 million metric tons of plastic to be collected, reused, and recycled by 2030, thereby reducing waste. By 2030, the company intends to make 100% of its packaging applications reusable and recyclable.

Shares of Dow have rallied 22% in a year compared with the industry’s growth of 19.7%.

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In the last-quarter earnings call, the company said that it expects earnings momentum from additional improvements in consumer spending, industrial production, and international travel moving ahead. With the ongoing global economic recovery, Dow noted that it is well placed to continue capturing value with its differentiated materials science portfolio and participation in fast-growing markets.

The company’s estimated earnings growth rate for the current year is pegged at 403%.

Zacks Rank & Stocks to Consider

Currently, Dow carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Methanex Corporation (MEOH - Free Report) , Aperam (APEMY - Free Report) , and Avient Corporation (AVNT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Methanex has a projected earnings growth rate of 422.8% for the current year. The company’s shares have grown 75% over a year.

Aperam has a projected earnings growth rate of 429.8% for the current year. The company’s shares have surged 117.5% over a year.

Avient has a projected earnings growth rate of 75.2% for the current year. The company’s shares have climbed 72.3% over a year.

In-Depth Zacks Research for the Tickers Above

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