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Sustainable Plastics: Inter IKEA purchases stake in New Zealand start-up

Sustainable Plastics: Inter IKEA purchases stake in New Zealand start-up

15 June 2023

This article was originally published on Sustainable Plastics


Inter Ikea Development B.V. is investing in an Auckland, New Zealand-based start-up called Nilo Ltd. that has developed technology to create non-toxic adhesives from waste plastics. Specifically, it has developed a binding agent able to replace the urea formaldehyde currently used as an adhesive to make engineered wood products such as plywood, particle board and medium-density fibreboard.

The companies have entered into a development and access agreement under which, among others, Inter IKEA is acquiring a 12.5-percent stake in Nilo. It will also have a seat on the company's board.

IKEA has long worked to lower formaldehyde emissions associated with its products. The company banned the use of formaldehyde in the paint and lacquer used on its products years ago. Earlier this year, the European Union (EU) implemented a restriction on the use of formaldehyde under the REACH Regulation, due to the potential health risks associated with formaldehyde from consumer articles.

Nilo’s binder is combined with wood chip to produce a recyclable particle board in a heated press, but can also be used to make MDF, OSB and plywood. The binder also has a lower carbon footprint than urea formaldehyde.

"The investment in Nilo shows our commitment to working with innovative startups that can support and help accelerate the Ikea material innovation agenda. Nilo's approach to the creation of this adhesive shows real potential, and we are hopeful the collaboration will be mutually beneficial," said Andrew McIntosh, innovation partnership leader for Ikea and the new Nilo board member. “The performance and physical qualities show promise and we want to support Nilo and help develop the adhesive with a mutual ambition to get it into scaled trials.”

Nilo was founded six years ago with the aim of tackling the problem of plastic waste. 350 million tonnes of plastic waste are generated every year. Nilo’s team of chemists and engineers have created technology that is able to repurpose this plastic waste.

"Our team has worked tirelessly on this, and to have our technology recognised by one of the world's leading firms with deep expertise in the wood-based board market provides huge validation of what Nilo has created," said Glen Willoughby, CEO at Nilo. “The knowledge and expertise Inter IKEA will bring will help Nilo progress our technology immensely.”

He added that Nilo’s vision extends beyond urea formaldehyde to utilise the enormous volumes of plastic waste of grades and types currently not readily recycled to create a range of price and performance competitive adhesives for use in different industrial applications.

Additionally, the end-of-life products created with Nilo adhesives will also be able to be reprocessed into new products, an essential for the circular economy, he said.

Inter Ikea Development B.V., registered in the Netherlands, is part of the Inter IKEA Group, which includes Inter IKEA Systems B.V., IKEA of Sweden AB, IKEA Supply AG and IKEA Industry AB related businesses. Inter IKEA Holding B.V. is the holding company for the Inter IKEA Group.

Other financial backers in Nilo include Icehouse Ventures and K1W1 Ltd., both investment firms, and Clare, a philanthropic investment and giving organisation. They are all based in New Zealand. SDG Impact Japan Inc. of Tokyo, which invests in sustainability efforts, is also an investor in the company.