MyEco Group Targets $3M Cost Cuts to Boost Sustainable Packaging Growth
MyEco Group is streamlining its manufacturing footprint and expanding outsourced production to cut fixed costs by up to $3 million annually, aiming to enhance margins and achieve positive EBITDA in the medium term.
- Operational restructure to complete by June 2025
- Fixed cost savings of $2.5m to $3.0m annually starting FY26
- Consolidation of three plants into Nanjing, China facility
- Expansion of outsourced manufacturing in Southeast Asia
- One-off restructure costs of approximately $0.7m to be recognized in FY25
Operational Restructure Overview
MyEco Group Limited (ASX: MCO), a key player in sustainable packaging manufacturing, has announced a significant operational restructuring initiative designed to reduce costs and scale production more efficiently. The company plans to consolidate three manufacturing plants into its global manufacturing hub in Nanjing, China, while expanding production capacity through partnerships with outsourced manufacturers in Southeast Asia. This strategic move is expected to be completed by June 2025.
The restructure aims to deliver annual fixed cost savings between $2.5 million and $3.0 million starting in the first quarter of FY26. These savings come from rationalizing manufacturing assets, relocating pilot production equipment, and moving the head office and product development centre to lower-cost premises in Melbourne.
Strategic Implications and Cost Impact
MyEco Group will incur one-off costs of approximately $0.7 million in FY25 to implement these changes. However, the company views this as an investment toward a leaner, more flexible production model that supports its growth trajectory. Centralizing resin, film, and bag manufacturing in Nanjing provides a fully integrated, low-cost facility, while outsourcing finished goods production to multiple partners in Southeast Asia enhances supply chain redundancy and geographic flexibility.
This operational pivot aligns with MyEco Group’s broader strategy to establish the MyEco brand as a global leader in sustainable packaging. The company’s proprietary biopolymer technology and strong patent portfolio underpin its product innovation, which has already made MyEco the number one compostable bin liner and kitchen caddy brand in Australian supermarkets, with growing recognition in the US and Mexico.
Outlook and Market Positioning
By streamlining operations and expanding production capacity, MyEco Group aims to improve product margins and reduce capital expenditure requirements. CEO Richard Tegoni emphasized that these initiatives will significantly enhance the company’s ability to achieve positive EBITDA in the medium term, setting a clear path toward profitability.
As demand for environmentally friendly packaging grows globally, MyEco’s integrated manufacturing approach and strategic partnerships position it well to meet market needs cost-effectively without compromising quality. The relocation of pilot production equipment to the Nanjing plant is expected to accelerate new product trials and scale-up, further supporting innovation-led growth.
Investors will be watching closely how these operational changes translate into financial performance in upcoming quarters, especially as the company balances restructuring costs with anticipated savings and margin improvements.
Bottom Line?
MyEco Group’s restructuring is a decisive step toward sustainable growth and profitability, but execution risks remain as cost savings and margin gains are realized.
Questions in the middle?
- How quickly will the fixed cost savings materialize post-restructure completion?
- What impact will outsourcing production have on product quality and supply chain reliability?
- How will MyEco’s innovation pipeline evolve alongside these operational changes?
