Paper and plastic packaging manufacturer Mpact is set to build a new polyethylene terephthalate (PET) recycling facility in South Africa, with an investment of around ZAR350m ($32.96m).

The new PET facility, which will be part of Mpact Polymers, will be constructed in Wadeville of Germiston, close to the firm’s existing plastics manufacturing facilities.

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The Industrial Development Corporation (IDC) has granted a ZAR210m ($19.7m) loan for the facility, as well as ZAR30m ($2.82m) for a 21% stake in Mpact Polymers.

PETCO, Ekurhuleni Metro and the Department of Trade and Industry (DTI) are also supporting Mpact in developing the project.

The new facility will annually process about 29,000t of PET plastic bottles, thereby producing 21,000t of new raw material.

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"Mpact is starting a new venture that will add an important dimension to our business."

Processing 29,000t of PET bottles amounts to savings of approximately 180,000m³ of landfill space every year.

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The new facility is slated to commence operations in the second half of 2015.

Mpact noted that the new investment could create around 1,000 direct and indirect jobs.

Mpact CEO Bruce Strong said: "Mpact is starting a new venture that will add an important dimension to our business.

"It is an excellent fit with our strategy and will enhance our position as a leading beneficiator of recyclables in South Africa.

"The ZAR350m that Mpact is investing in plastic recycling and the ZAR765m investment we announced in March this year for upgrading our Felixton paper mill are tangible evidence of our commitment to exploiting sound growth opportunities."

PET is generally used for carbonated soft drinks, bottled water and other food packaging.