Indian sustainable packaging materials producer Pakka has unveiled plans to establish a new compostable packaging facility in Guatemala, the Hindu Business Line has reported.

The new unit is designed to produce 400 tonnes (t) of compostable packaging materials daily, targeting the North American market.

This $340m project aims to become the world's largest compostable packaging facility, with operations commencing between late 2026 and early 2027.

Pakka has already secured seed funding between $10m and $12m for land acquisition and intends to raise an additional $200m in debt and $130m in equity to finance the project, according to the news agency.

Pakka Group CEO Ved Krishna expressed that there is significant interest from sugar companies, strategic partners, and customers in investing in the Guatemalan facility.

In a strategic move to bolster its innovation capabilities, Pakka is also relocating its research and development centre from Bengaluru, India, to Portland in the US.

The company is committing $5m this year to advancing sustainable materials research, focusing on bagasse and nanocellulose.

Serving global clients such as McDonald's, Domino's, and Mars, Pakka says it is dedicated to replacing non-biodegradable packaging with regenerative solutions.

Pakka aims for a 20-fold growth by 2030, driven by new products that will enhance revenue from its Ayodhya, India, plant and global operations.

Last August, the company secured Rs2.44bn ($29.06m) in investment to scale up its production capabilities.

The company noted that this funding will be used to develop a compostable flexible packaging facility in Ayodhya, located in the state of Uttar Pradesh.