FE Green PET secures RM150 million in sustainable financing from HSBC Malaysia

FE Green PET (M) Sdn Bhd (FE Green PET), a wholly-owned subsidiary of Taiwan’s Far Eastern New Century Group (FENC); a prominent player in sustainable materials manufacturing, has secured RM150 million in green and sustainability-linked financing from HSBC Malaysia. This marks FENC’s global debut in green and sustainability-linked financing and will fund the expansion of FE Green PET’s recycled polyethylene terephthalate (rPET) resin production plant in Melaka. The initiative will not only support the construction phase but also the post-commercial operation of the project.

FE Green PET’s recycled polyethylene terephthalate (rPET) resin production plant in Hicom Pegoh Industrial Park in Alor Gajah, Melaka. (Photo Credit: Far Eastern New Century Corporation)

rPET can be produced from used plastic materials such as used plastic bottles and containers. Part of the loan proceeds will be used to finance the acquisition of industrial land and recycled PET (rPET) production equipment for the plant’s initial construction phase. The plant will have the capacity to produce 50,000 metric tonnes of rPET from Post-Consumer Recycled (PCR) content annually.

This strategic investment not only showcases the increasing trend of Taiwanese companies investing in Malaysia, amidst supply chain shifts but also reinforces FE Green PET’s dedication to sustainable practices. The plant will contribute to waste reduction by transforming waste into value-added products for food-grade rPET*, for some of FE Green PET’s globally recognised clients, including leading beverage brands. 

This investment aligns well with Melaka's Industrial Booster initiative and will play a pivotal role in bolstering the state's vision of transforming into a green state economy hub, with well-developed infrastructure enabling fast global imports and exports.

“The collaboration between FE Green PET and HSBC signifies a stride towards a more sustainable future, promoting a circular economy and responsible manufacturing practices.Through the cross-border collaboration with the parent company; Far Eastern New Century in Taiwan, FE Green PET (M) Sdn Bhd in Malaysia and HSBC’s offices in both Malaysia and Taiwan, the deal highlights our ability to leverage our international network to connect clients with key opportunities offered by sustainable finance”, said Shreyas Krishna, Head of Global Trade Solutions, HSBC Malaysia. 

"We have been deeply rooted in the Malaysian market for 30 years. Malaysia is not only a key hub for our ASEAN operations but also represents our long-term commitment to local development. The commissioning of our new Melaka plant will accelerate the implementation of the 'bottle-to-bottle' circular system, supporting Malaysia’s green transition and resource recycling, while further connecting regional and global supply chains in pursuit of low-carbon development", said Donald Fan, President, FENC. 

The Sustainability-Linked structure aligns KPIs with FENC’s sustainability strategy and initiatives. This framework enhances pricing as sustainability targets tied to FENC’s ESG efforts are achieved. Key focus areas encompass Renewable Electricity Consumption and Recycled Water Consumption.  

FENC is the world's largest green recycler of bottle grade polyester. Since 1988, the company has been committed to environmentally friendly recycling processes and product development, with production facilities in Taiwan, Japan, Vietnam and the United States. In line with efforts to consolidate its leadership in the ASEAN PCR industry, which focuses on reusing materials discarded by consumers, FENC is looking to replicate its successful model in Malaysia.

The RM150 million in green and sustainability-linked financing from HSBC Malaysia will fund the expansion of FE Green PET’s rPET resin production plant in Melaka. (Photo Credit: Far Eastern New Century Corporation)

FE Green PET distinguishes itself through cutting-edge technology that transforms locally sourced PET bottles into high-quality rPET resin. By employing advanced techniques including sorting, cleaning, decontamination, and pelletising, high-value rPET resin is produced, ensuring both environmental sustainability and product quality.