Zotefoams PLC (LSE:ZTF) shares gained over 9% to 349p in early trading after the company announced a joint development agreement for its ReZorce drinks cartons with a 'world leading' unnamed beverage packaging company.
The deal, which came after successful internal trials, will see the ReZorce mono-material beverage carton packaging developed further and also includes in-market trials for a major European retailer, Zotefoams said in a statement.
Compared with traditional composite drinks cartons, the cartons have a lower carbon footprint, are recyclable and are designed for the circular economy, initially by using 30% post-consumer recycled materials, the company said.
In addition, ReZorce can be processed on existing filling equipment, meaning packaging companies and retailers only need to make a small capital investment.
David Stirling, Zotefoams CEO, commented: "This agreement confirms the significant technical progress we have made with our ReZorce mono-material barrier range. As we have continued our development efforts, it has become clear that demand for a sustainable alternative material for beverage cartons is significant and in line with our initial market assessment.
"This agreement for ReZorce development is an important milestone and we look forward to it delivering results that clearly demonstrate ReZorce is the optimal material solution for beverage cartons."