Closed Loop Partners announced a multi-million-dollar loan to LEI Packaging (LEI), a molded fiber packaging manufacturer based in Chisago City, MN. Provided by the firm鈥檚 Catalytic Capital & Private Credit strategy, the financing supported the construction of LEI鈥檚 newly completed second production facility, which is expected to use thousands of tons of post-consumer recycled fiber as feedstock.
Founded in 2014 by Paul and Katie Johnson, LEI has grown significantly over the past decade to supply farms and co-ops across the country with molded fiber egg trays and cartons made from recycled paper. The new facility, supported by Closed Loop Partners鈥� loan, now includes a de-trashing system that will allow LEI to process post-consumer recycled fiber bales for the first time, in addition to the post-industrial material it currently uses at its first facility.
This expansion comes as consumer and food brands, manufacturers, farms and agriculture customers increasingly look to paper packaging to support their circular packaging goals鈥撯�搈aking investment in fiber recovery and reprocessing infrastructure critical to keeping pace. The new facility positions LEI to meet rising demand for curbside-recyclable fiber packaging alternatives, while adding end-market capacity for recycled paper fiber and boosting U.S. supply.
鈥淎s more of the packaging industry looks to paper and fiber-based materials to support their circularity goals and meet regulatory requirements, we have to build the recycling infrastructure to support that shift,鈥� said Tazia Smith, CEO of Closed Loop Capital Management, the investment firm of Closed Loop Partners. 鈥淟EI is a strong example of a family-owned manufacturer investing in the equipment and processes needed to bring more recycled fiber into circulation, and we鈥檙e proud to support that growth.鈥�
The investment reflects Closed Loop Partners鈥� continued focus on backing the growth of domestic recycling infrastructure and remanufacturing capacity, and developing responsible end markets for recycled commodities. 鈥淲e continue to see the growing market opportunity for fiber packaging that can be recovered for remanufacturing, increase efficiency and reduce waste. Expanding our capacity at this point is critical to continue meeting market demand,鈥� said Paul Johnson, Co-Founder of LEI Packaging. 鈥淭he capital from Closed Loop Partners, and their team鈥檚 experience working with operators, helps us build the capacity to use even more recycled material and meet the demand we鈥檙e seeing from our customers.鈥�
Beyond the environmental case for molded fiber, the project is also expected to generate local economic impact, including approximately 20+ jobs and roughly 15 construction and development jobs tied to the new facility 鈥淟EI Packaging鈥檚 growth to date demonstrates the path to scale in the recycled fiber packaging space and reinforces the growing role of molded fiber as a viable, cost-competitive alternative to materials like foam,鈥� said Ray Hugel, Managing Director and Co-Head of the Catalytic Capital & Private Credit strategy at Closed Loop Capital Management. 鈥淲e are proud to back an independent, family-run manufacturer and provide them with the catalytic capital and network needed to support their expansion.鈥�