MyEco Group Targets Positive EBITDA with Production and Sales Overhaul

Strategic Repositioning to Lead Sustainable Packaging

MyEco Group Ltd (ASX: MCO) is deepening its commitment to sustainable packaging with a comprehensive strategic repositioning aimed at accelerating growth and improving profitability. Following the wind-down of its petroleum-based plastic film production in FY24, the company has sharpened its focus exclusively on its MyEco® branded biodegradable and compostable products, which have gained significant traction in Australia and international markets such as the United States and Mexico.

This repositioning is more than cosmetic; it reflects a deliberate pivot to align the company’s operations, sales, and production capabilities with the surging demand for environmentally friendly packaging solutions. The recent record growth in MyEco® branded product sales underscores the market’s appetite for sustainable alternatives and validates the company’s strategic direction.

Operational Efficiency and Production Scaling

To support this growth, MyEco Group is transforming its production strategy by leveraging strategic partnerships with high-end converters rather than expanding its own manufacturing footprint. This approach allows the company to scale capacity flexibly and cost-effectively, while also introducing redundancy into its supply chains. Concurrently, the company plans to rationalize its manufacturing assets in Malaysia and relocate pilot production equipment from Melbourne to its commercial plant in Nanjing, China, to reduce costs and streamline product development.

These operational changes are expected to materialize in the latter part of FY25 and early FY26, positioning MyEco Group to improve margins and reduce capital expenditure requirements significantly. The integrated model combining internal assets with external partnerships aims to maintain the high quality standards that have become synonymous with the MyEco® brand.

Refined Sales and Distribution Strategy

On the sales front, MyEco Group is intensifying efforts to secure new global distributors capable of driving substantial sales growth. Recent partnerships, including with Jewett-Cameron Company, an established player in Costco’s US, Canadian, and Mexican markets, highlight the effectiveness of this approach. Additionally, the company is expanding its product range with innovations such as reusable compostable carry-out bags introduced to Australian retailer Ritchies, further broadening its market presence.

Despite volatility in resin markets, particularly in Latin America, MyEco Group remains committed to maintaining its resin business selectively, focusing primarily on supplying its own branded products and advancing resin technology through collaborations with research institutions. This dual focus on market expansion and product innovation underpins the company’s medium-term growth ambitions.

Cost Reduction and Future Outlook

Complementing these strategic initiatives, MyEco Group will relocate its Melbourne head office and product development centre to lower-cost premises in Q3 FY25, aiming to reduce fixed overheads and rental expenses. The company anticipates that these combined efforts will materially reduce costs and enhance operational flexibility, enabling it to scale production efficiently and improve profitability.

Looking ahead, MyEco Group is confident that its refined sales strategy and more cost-effective manufacturing model will drive the company toward positive EBITDA in the medium term. Investors and market watchers will be keenly observing the implementation of these initiatives and their impact on financial performance in the coming quarters.