NEXE Innovations, a compostable materials solutions provider, has completed the divesture of its original facility in Surrey, British Columbia (BC), Canada, for $5.7m. 

The facility, originally acquired in June 2016 for $1.37m, underwent approximately $1m in tenant improvements, bringing the total initial investment to around $2.4 million.  

The facility is claimed to be debt-free at the time of the divestment.

NEXE Innovations used the Surrey facility primarily for research and development (R&D) and the creation of the company's first compostable coffee pods. 

The divesture forms part of NEXE's strategy to compete with plastic products on pricing.

To achieve this, the company has developed a facility equipped with advanced manufacturing technology in Windsor, Ontario. 

NEXE president and co-founder Ash Guglani said: "We believe our move to reshore all of our operations and bring each step of the manufacturing process in-house gives us a competitive edge, ensuring we can offer superior products at a competitive price."  

With a more than $10m cash position as of the third quarter of 2024, NEXE plans to reinvest the proceeds from the sale into operations, sales, and marketing.  

The Windsor facility's strategic location near the Canada-US border places it within a 500-mile radius of a market comprising more than 100 million consumers.

The plant has a production capacity of 500 million pods and is positioned to make a significant impact on the North American market, according to the company.  

This facility also enables the company to maintain control over quality, protect intellectual property and trade secrets, and shorten the R&D cycle for new products.