Its investors are Foresight Venture Partners, which invested £4.6 million, Allied Irish Bank (GB), which contributed £5.5 million, and Chelverton Growth Trust.

The London-based company also secured public sector funding from the London Development Agency and the Waste & Resources Action Programme.

Closed Loop will use the funding to buy a site in Dagenham and open a processing plant in December 2007. The company will recycle polyethylene terephthalate, used in plastic bottles for drinks and cosmetics, to make food packaging.

For the year ending December 2005, Closed Loop made a turnover of some £128,000 and a pre-tax loss of about £234,000. Its parent company, Visy Closed Loop, is based in Australia.

Chris Dow, managing director of Closed Loop, says: “The UK will have a world class facility for processing its plastic waste and need not export this material for reprocessing into low grade applications.”