Eco-packaging player Papyrus to make banana-fibre products from waste for Egyptian Government

Papyrus (ASX:PPY), a manufacturer of biodegradable packaging and liquid fertilisers using nothing but agricultural waste from banana farms, has won a contract with the Egyptian government to build its second manufacturing plant in the jurisdiction. 

The company’s share price climbed 8% to 5c in the first hour of trades on the back of the news. 

Worth noting is that this agreement comes just before COP27 kicks off in Egypt later this month; COP27 will be the 2022-iteration of a UN-aligned global climate conference attracting government figureheads and industry heavyweights. 

Methane mitigation

The deal, which for all intents and purposes is a bit of an eyebrow-raiser, is maybe more logical than one would immediately predict.

Decomposing waste from banana farming (bananas that don't make the cut, chopped down trees post-harvest, banana skins) causes methane emissions, and methane emissions have been the subject of numerous global pledges in the last twelve months.

Methane, the main constituent of natural gas, is a more potent greenhouse gas than carbon dioxide.

Methane emissions from Australian agriculture, for instance, are one of the main factors that promoted carbon soil farming projects into Australia's carbon trading offset schemes in the first place.

So, from that point of view, the Egyptian Government's interest in banana-fibre biodegradable packaging is understandable.

Two-part contract

All in all, the company’s contract with Egypt is composed of two parts: 

1. The sale of equipment needed for a banana fibre manufacturing plant to the Egyptian government, and,

2. An offtake agreement with the latter for the purchase of biodegradable packaging created at the facility. 

Papyrus believes the offtake component of the contract could eventually fetch the company up to US$1.5m. 

Curiously, the company signed an agreement with Egypt’s Ministry of Military Production earlier this year, which is referred to as the ‘Cooperation Protocol Roadmap.’ 

2,000 30-egg trays per hour

This is not the first plant Papyrus will build in Egypt. It already has one in the Sohag region, which uses banana farming waste to create both biodegradable packaging, and, liquid fertilisers. 

Earlier this year, Egyptian government officials visited the existing plant as part of a publicised visit. 

The company advertises its Sohag plant as possessing the capacity to push out 2,000 30-egg trays per hour, made from fibre created by waste products collected during banana farming. 

Papyrus, for that reason, targets regions with established banana farming sectors to further develop its expansion strategy. 

Papyrus to train workforce

“This is an exciting step towards realising the enormous potential of the Papyrus technology,” Papyrus MD Ramy Azer said. 

“Banana plantation waste is a key environmental issue in Egypt and throughout Africa as it produces significant methane emissions when it decomposes…we are thrilled to have the opportunity to work with the Egyptian Government.”

“Papyrus will provide the technology and training towards [the Government’s] goal of managing the waste from Egypt’s banana industry."