Pact share price slides despite Woolies recycled packaging deal

What is this new partnership all about?

| More on:
man doing stocktake at supermarket

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Pact share price is in the red today 
  • The recycling company will supply sustainable packaging for Woolworths from recycled plastic 
  • The deal involves a multimillion investment in local recycling and manufacturing 

The Pact Group Holdings Ltd (ASX: PGH) share price is in the red today despite a planned partnership with Woolworths Group Ltd (ASX: WOW).

The recycling company's share price is down 0.96% so far today, currently trading at $2.07. For perspective, the S&P/ASX 200 Index (ASX: XJO) is 0.16% higher in late morning trade.

Let's take a look at the deal between Pact and Woolworths.

Pact to work with Woolworths

The two companies are planning to work together to replace 18,000 tonnes of new plastic with local recycled plastic each year. This is forecast to reduce carbon emissions by 25,000 tonnes.

Pact will supply sustainable packaging made from recycled plastic for Woolworths products including milk bottles, meat trays, and drink bottles.

The partnership involves a multimillion investment in local recycling and manufacturing, according to the companies.

Pact CEO and managing director Sanjay Dayal said consumers and businesses are demanding recycled and recyclable plastic packaging. He added:

Plastic packaging that is designed effectively, that is recyclable and recycled properly in Australia can be used again and again, creating a truly local circular economy for plastics.

Woolworths uses recycled plastic when there is no viable alternative to plastic. Further commenting on the plan, Woolworths format and network development managing director Rob McCartney said:

We're working hard to remove plastic from packaging like our bakery trays, however it can be necessary to protect quality and food safety in some products – which is why replacing it with recycled plastic is the next best thing.

Pact share price snapshot

The Pact share price has lost more than 41% in the past year, while it has fallen 18% year to date.

In the past month, Pact shares have leapt nearly 9%.

For perspective, the benchmark ASX 200 index has shed about 8% in the past year.

Motley Fool contributor Monica O'Shea has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.
Materials Shares

Rio Tinto share price tumbles on CEO bombshell news

The mining giant is now looking for a new leader.

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Materials Shares

What's going on with the Fortescue share price today?

This mining giant is making changes to its leadership.

Read more »

Happy construction worker at a building site with a group of workers at the background.
Materials Shares

After its result, does Macquarie rate James Hardie shares a buy, hold or sell?

The company announced its FY25 earnings on Wednesday.

Read more »

Miner and company person analysing results of a mining company.
Materials Shares

Fortescue shares fall on Iron Bridge blow

Iron Bridge is taking longer to ramp up than planned.

Read more »

Three miners looking at a tablet.
Materials Shares

Buy Rio Tinto shares for a 23% return

Let's see which broker is tipping this mining giant as a top buy.

Read more »

A bricklayer peers over the top of a brick wall he is laying with a level measuring tool on top and looks critically at the work he is carrying out.
Materials Shares

Brickworks shares have surged 15% in a month. Are they still good value according to Macquarie?

Here's what this broker has to say about the stock.

Read more »

A man checks his phone next to an electric vehicle charging station with his electric vehicle parked in the charging bay.
Materials Shares

Are Pilbara Minerals shares too cheap to ignore?

A leading broker has given its verdict on this beaten down lithium miner.

Read more »

An unhappy man in a suit sits at his desk with his arms crossed staring at his laptop screen as the PointsBet share price falls
Materials Shares

Does Macquarie rate James Hardie shares a buy, hold or sell?

The company is set to report FY25 earnings this week.

Read more »