Ester Industries targets late-2028 start for 45,000-tonne JV

Ester Industries Limited is targeting commercial operations in the last quarter of calendar 2028 for its Elite joint venture in Gujarat, designed to make about 45,000 metric tonnes annually of recycled polyester chips; Nike has signed a multiyear anchor offtake agreement, while land acquisition is expected by Q4 FY27.

What is Ester Industries building with Loop Industries?

Ester Industries is building Elite as a 50:50 joint venture with Loop Industries to chemically recycle polyester textile waste into recycled polyester chips. The Gujarat plant is planned to convert difficult-to-recycle textile waste into recycled dimethyl terephthalate, or RDMT, and recycled MEG, or RMEG, before polymerising those inputs into chips.

The facility is designed for annual output of about 45,000 metric tonnes of recycled polyester chips. Management said the front-end engineering design study is complete and Toyo Engineering India has been appointed for detailed engineering, advancing the project from design work to engineering execution.

Elite is separate from Ester Industries’ existing rPET business, which has installed capacity of 28,000 metric tonnes a year across Sitarganj and Hyderabad. Most output from those facilities is consumed internally for BOPET films with recycled content, while Elite is intended to process polyester textile waste through Loop Industries’ chemical-recycling technology.

When will Ester Industries’ Elite plant begin production?

Ester Industries is targeting commercial production from Elite in the last quarter of calendar 2028, subject to land acquisition, detailed engineering and financing steps. Management said land acquisition is expected by Q4 FY27 and, during the question-and-answer session, specified January or February 2027 as its expected completion window.

The land is near Bharuch in Gujarat and requires assembly of parcels from multiple sellers, according to management. Ester Industries said it initially approached Gujarat Industrial Development Corporation but could not secure a suitably sized parcel, then used an aggregator route that began in July 2025.

Management rejected the suggestion that the land process had delayed the project, retaining the late-2028 operating target. It attributed the extended acquisition process to multiple owners and transactions, rather than a single purchase within a government-developed industrial park.

Who has committed to buy Elite’s recycled polyester output?

Ester Industries says Nike has signed a multiyear offtake agreement as Elite’s anchor customer before the facility begins commercial production in late 2028. The company did not disclose Nike’s contracted volume, price or contract duration, so the capacity covered by Nike’s agreement cannot be calculated from the call.

Loop Industries has also secured a letter of intent from another unnamed global sports and athletic brand for potential purchases of up to 15,000 metric tonnes a year of Loop PET fibre-grade resin under a multiyear commercial framework. That potential volume equals one-third of Elite’s planned 45,000-tonne capacity, although management described it as a letter of intent rather than a final offtake agreement.

Management said the two customer arrangements cover a significant part of planned capacity ahead of production. The commercial interest comes as Ester Industries’ rPET sales volume rose 37.4% year on year to 1,437 metric tonnes in Q2 FY27 and rPET revenue increased 51% to Rs 18.4 crore, although the company primarily uses its rPET production internally.

How much will Elite cost and how will Ester Industries fund it?

Management estimates Elite’s project outlay at Rs 1,200 crore to Rs 1,400 crore for the 45,000-tonne facility. It said additional project debt would remain at the joint-venture level and would not be consolidated with Ester Industries.

Ester Industries reported investing Rs 7.1 crore in Elite during H1 FY27 as part of its equity contribution. In the call’s question-and-answer session, management said cumulative equity investment stood at Rs 50 crore, split equally at Rs 25 crore from Ester Industries and Rs 25 crore from Loop Industries; the two statements distinguish the H1 FY27 investment from cumulative funding.

Management said Elite had received in-principle approval for a term loan from an unnamed public-sector bank, with final sanction expected after a process of three to four months. It also said Loop Industries had private-equity funding commitments tied to milestones, including land acquisition and debt tie-up, rather than stating that all of Loop Industries’ equity cash was already available.

How will Elite affect Ester Industries’ earnings and accounts?

Management expects Elite to generate an earnings before interest, tax, depreciation and amortisation margin of 40% to 45%, which is a forward-looking management estimate rather than a reported result. It linked that estimate to customer contracts and pre-sold volume, but did not disclose projected revenue, profit after tax, cash flow or the timing of full-capacity production.

Ester Industries said Elite will not be consolidated line by line because the entity is a 50:50 joint venture. Instead, Ester Industries expects to recognise 50% of the joint venture’s bottom-line contribution, meaning Elite’s revenue and operating expenses would not be added directly to the company’s consolidated top line.

The project is being developed while Ester Industries manages a higher working-capital requirement. Consolidated borrowings stood at Rs 748.8 crore on September 30, 2026, compared with Rs 729 crore in March 2026, after net working capital increased by Rs 66.7 crore during H1 FY27.

What could affect Elite’s timeline and funding?

Elite’s last-quarter-2028 target still depends on completing land acquisition, detailed engineering and final loan sanction. Management expects land acquisition by Q4 FY27 and said final bank approval could follow the in-principle approval process in three to four months, but it did not disclose a final financial-close date or debt-equity mix for the Rs 1,200 crore to Rs 1,400 crore project.

Loop Industries’ equity funding remains relevant because management said its private-equity commitments are contingent on defined milestones. Ester Industries said it does not foresee a funding problem and that Elite does not require debt from Loop Industries, but progress on land acquisition and debt tie-up remains material to the stated equity-funding sequence.

Conclusion

Elite would give Ester Industries planned capacity of 45,000 metric tonnes a year in chemical recycling of polyester textile waste, alongside its existing 28,000-tonne annual rPET capacity. Nike’s multiyear anchor agreement and the separate potential commitment for up to 15,000 tonnes a year provide early commercial support, while the project’s Rs 1,200 crore to Rs 1,400 crore cost makes financing execution central to delivery.

The next disclosed milestones are land acquisition by Q4 FY27, final term-loan sanction following the indicated three-to-four-month process, and detailed engineering by Toyo Engineering India. Management’s late-2028 operating target will depend on completing those steps and on Loop Industries obtaining the private-equity funding linked to project milestones.