(Yicai) Aug. 12 -- Ingka Group has invested in Re-Mall Environmental Protection New Material, a Chinese recycler of consumer packaging waste, marking the first circular-economy investment in China by the parent company of Swedish furniture giant Ikea amid Livat mall sale rumors.

Ingka's investment arm has made a capital injection into Re-Mall to support the Shanghai-based company in increasing its recycling capacity and developing new products, the Leiden-based firm announced yesterday, without disclosing the size of the deal.

China is one of the world’s largest plastic markets and has a pivotal role in finding circular-economy solutions to tackle waste, with Re-Mall being one of the leaders in the field, Ingka noted. Re-Mall produces premium-grade recycled polypropylene used in storage boxes, containers, tableware, toys, cosmetics packaging, and woven textiles, 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, according to 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,” he said.

Ingka operates 39 Ikea stores and 10 shopping malls under the Livat brand in the Chinese mainland. Market rumors last week said Ingka is considering selling all of its Livat malls, aiming to pocket CNY16 billion (USD2.2 billion) from the sale of 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 it 16 years ago and that it just opened new stores in Xi'an and Shanghai last year.

Editor: Martin Kadiev