(Yicai) Aug. 12 -- Ingka Group has invested in Re-Mall Environmental Protection New Material, a Chinese recycler of post-consumer packaging waste, marking the first circular investment in China by the parent firm of Swedish furniture giant Ikea amid recent rumors about asset sales.

Ingka's investment arm Ingka Investments has made a growth capital injection in Re-Mall to support the Shanghai-based company in increasing its recycling capacity and developing new products, the parent firm announced yesterday, without disclosing any figures.

China is one of the largest plastic markets in the world and has a pivotal role in finding circular solutions to tackle waste, with Re-Mall being one of the leaders in the field, Ingka noted. The Chinese firm produces premium-grade post-consumer recycled polypropylene used in storage boxes, containers, tableware, toys, cosmetics packaging, and woven textile products, it added.

"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," said Lukas Visser, head of circular investments at Ingka. "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."

The investment highlights Ikea's long-term commitment in China, said Pontus Erntell, president and chief sustainability officer of the company's country arm. "To meet our customers' needs for generations to come, we have both the responsibility and the opportunity to take a lead in accelerating the circular economy beyond Ikea, and the scale and innovation capabilities here in the Chinese market create significant opportunities for this transformation."

Ingka operates 39 Ikea stores and 10 shopping malls under the Livat brand in the Chinese mainland. However, according to market rumors circulating last week, it is considering selling all of its Livat malls, aiming to get CNY16 billion (USD2.2 billion) from the first three in Wuxi, Beijing, and Wuhan.

Ingka declined to comment on the rumors when contacted by National Business Daily on Aug. 8, but said that China has been one of its most important markets since entering 16 years ago and that it just opened new stores in Xi'an and Shanghai last year.

Editor: Martin Kadiev