The Secos Group Ltd (ASX:SES) share price soared more than 250% in early trade after completing a commercialisation deal with Woolworths Group Ltd (ASX: WOW) for its compostable bag range. The Secos share price has since settled to 10 cents per share, putting it up by 87.50% so far today.
Woolworths selects Secos as supplier
In an announcement released earlier today, Secos informed the market that Woolworths has selected the company to supply 2 certified, compostable bin liners to be stocked in 86 of Woolworths' Eco stores.
The initial rollout, expected to occur in July, will see Secos supply its 8L kitchen cady bag and 36L bin liners to the eco stores, with a view to expand supply through the broader Woolworths retail network. Secos' management highlighted the importance of today's announcement as a potential launchpad to expand the company's market share in grocery and convenience stores.
Secos will be launching its Woolworths certified compostable bin liners under the 'MyEcoBag' brand and will be looking to expand this range for other compostable bag offerings.
What does Secos do?
Secos is an Australian-based company that develops and manufactures sustainable packaging materials. The company has a significant portfolio and intellectual property around the formulation and production of compostable resin, film and bags. Secos has sales offices in Australia, the US, China, Malaysia and Mexico with distributors in Europe, Asia, the Middle East and Africa.
Secos is well positioned to address the growing global trend towards sustainable packaging. The company boasts a range of certified industrial compostable and home compostable biopolymer resins. These resins can be used for a wide variety of applications such as bin liners, kitchen caddy bags and dog waste bags.
The company's aim is to replace traditional single use plastic packaging and traditional plastic bags. According to Secos, the company's compostable products will allow household food waste to be transferred and transformed into fertile mulch at organic treatment stations.
In May this year Secos was awarded a contract from the City of Melville worth $600,000 to provide over 42,00 homes with compostable kitchen tidy bags to facilitate food waste diversion.
About the Secos share price
The Secos share price soared more than 250% in early trade after hitting an intraday and 52-week high of 20 cents. The company's share price has been sold-off since and is currently trading 87% higher for the day at around 10 cents. Secos shares have returned more than 146% in the past year, and its current market capitalisation sits around $44 million.
