Saturday, May 18, 2024

H&M plots N.C. plant for recycled polyester


Sustainability makes strange bedfellows.

Climate activist Bono and Swedish fashion giant H&M Group, which is routinely criticized for churning out cheaply made clothing that quickly ends up in landfills, are jointly investing in a new North Carolina facility that will make recycled polyester. It will be H&M’s first U.S. factory.

Stockholm-based H&M had $22 billion in revenue last year and operates more than 4,000 stores. It has formed a company called Syre with Swedish investment company Vargas Holding, H&M said in a press release. Vargas has raised $20 billion in equity and debt since 2014 to invest in “green” companies, according to its website.

By the end of the year, Syre plans to polyester made from used textiles at the undisclosed N.C. site. Syre will reveal the plant location shortly, according to spokeswoman Emma Stjernlöf.

The new facility is also getting funding from TPG Rise Climate, an investment fund that Bono co-founded in 2016 with Texas-based private equity group TPG.

TPG and Vargas are committing about $60 million to build the N.C. facility, according to the London-based Financial Times.

The Economic Development Partnership of North Carolina referred questions to the N.C. Department of Commerce. Commerce spokesman David Rhoades said the department wasn’t aware of the project.

“The new venture Syre is an important next step on H&M Group’s journey to integrate circularity across our business,” H&M Group CEO Daniel Erver said in a press release.

The apparel industry emits 10% of global carbon emissions and produces 20% of wastewater, according to the United Nations Economic Commission for Europe.

The demand for production is at record levels as fast-fashion retailers such as H&M and Spain’s Zara and China’s Shein make clothes that are more affordable, and often less durable and easily discardable. The typical consumer buys 60% more items of clothing a year compared with 2000, but garments are kept half as long, the UN commission reported.

With a business model that’s based on getting new collections into stores as often as every month, H&M says it is aiming to make its clothes more sustainable rather than reducing production. In 2022, the company announced plans to double sales by 2030, but pledged that all materials will either be recycled or sourced in a more sustainable way by the same year.

The new N.C. plant is key to this goal.

“H&M Group has secured an offtake agreement with Syre worth a total of $600 million over seven years, covering a significant share of H&M Group’s long-term need for recycled polyester,” the press release states. Its main source for recycled materials now is plastic bottles, which doesn’t put a dent in textile waste.

The N.C. plant with Syre’s new technology and production processes will emit as much as 85% less CO2 than production of oil-based virgin polyester, Syre said.

Syre means “oxygen” in Swedish. And “sy” means sew, while “re” means again.


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