Founded last year, Re Pet, based in Houghton-le-Spring, plans to supply the packaging industry with recyclable plastic sheeting, polyethylene terephthalate (PET), that is used to make products such as food cartons and drink bottles. A launch is expected in the first half of the year.

The North East Accelerator Fund, which is managed by Newcastle-based Northstar Ventures, and the Waste & Resources Action Programme’s Accelerating Growth Fund, led the fundraising. Shareholders also committed private finance to the venture.

The business aims to have a first-year turnover of between £5 million and £6 million as supermarkets and food companies continue to pursue green targets, according to a statement from the fund.

Re Pet managing director John Forrest says as much as three quarters of the investment has been used to buy a machine that produces the sheeting. He adds that the business expects to be making 100 tonnes of material each week.