Sustainable packaging darling Great Wrap collapses amid $39m liabilities
The founders of Melbourne sustainable packaging start-up Great Wrap have revealed what led to the company’s shock multimillion-dollar collapse.
The founders of sustainable packaging start-up Great Wrap have opened up on their heartbreaking decision to place their beloved business, once hailed as a trailblazer in eco-innovation, into administration.
The Melbourne-based company – which is known for developing, manufacturing and selling compostable stretch wrap – is run by well-known founders, husband-and-wife duo Jordy and Julia Kay.
It entered voluntary administration on September 17 under $39m in liabilities, including debts and millions tipped in by investors.
Speaking to News Corp, Mr Kay said the decision to enter administration was a painful decision, but the right thing to do for the company’s creditors.
“This was one of the hardest choices I ever faced in my journey at Great Wrap but we knew it was the best option to get the best outcome for all creditors,” he said.
“We built such a strong community of customers, team members and investors.
“To commence this process meant that we let all of those people down who not only believed in the business but the potential impact it could have on the industry.”
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Mr Kay revealed the company’s demise was due to a “market shift” towards recycled content solutions – favouring materials made from post-consumer waste, rather than bio-based compostable alternatives like those developed by Great Wrap.
“Despite early traction and efforts to restructure, the company could not secure the capital needed to adapt to changing demand toward recycled content, making administration the only path forward,” he said.
The co-founder said he still hoped the business’ innovations would live on, particularly with strong overseas demand.
“There is still plenty of demand for our products overseas and I know there are parties interested in the intellectual property developed to date,” he said.
“I hope to see it continued and reach its full potential as I believe there is still an important place for compostable packaging in our economy.”
The company, founded in 2019, was supported by government grants and private capital raisings, including $28m over the past three years from investors, and has been recognised globally by LaunchVic, CBA Young Hero Awards, Fast Company, Good Design Awards and The Design Files.
Ms Kay was also awarded Young Victorian of the Year in 2022.
Great Wrap entered administration owing over $8.5m to secured creditor and financier of the company, De Lage Landen, as well as $2.5m to non-related unsecured creditors, administrator estimates reveal.
More than $28m is owed to related party unsecured creditors, and about $104,000 is owed to staff, including $23,000 in wages, $15,000 in superannuation and $71,000 in annual leave.
The administrators have since terminated all five employees of the company and ceased the business’ operations at its Tullamarine premises.
A second meeting of creditors is slated for next week where the company is likely to be tipped into liquidation, with no rescue deal put forward by the business.
Appointed administrators Brent Morgan and Shane Cremin of Rodgers Reidy said the company incurred losses in each financial year since it was founded in 2019, and had never recorded a profit, with cumulative losses to date totalling $26.2m.
They said revenue declined by about 32 per cent from FY23 to FY25, with income generated primarily from sublease rental arrangements – bringing in $344,000 in FY25 – rather than product sales.
The company’s major expenses, including payroll, rent and lease payments, exceeded revenue by 826 per cent in FY25.
Mr Morgan and Mr Cremin said the business faced high capital requirements, input cost pressures and working capital challenges which contributed to continued financial strain.
They said the director, Mr Kay, attributed the failure to commercial and market factors that made ongoing operations unsustainable.
“The company achieved initial traction in the Australian market with compostable stretch wrap but was unable to secure sufficient recurring sales to support the cost structure associated with running a large-scale manufacturing facility,” they said.
“The plant and equipment was established based on forecast demand that did not fully materialise.”
Despite the business’ efforts to restructure operations and explore partnerships, the company could not generate the revenue or capital required to continue trading, leaving Mr Kay with no choice but to place the business into administration.
The administrators alleged the company may have traded while insolvent from “at least” June 2023, based on preliminary investigations.
Should the company enter liquidation and creditors agree to fund investigations into the alleged insolvent trading, Mr Morgan and Mr Cremin estimate there could be a potential claim of $1.4m against the director.
The administrators said they had to abandon a campaign to recapitalise or sell the company’s assets after expected funding from secured creditor De Lage Landen and an investor, needed to cover ongoing costs, was not provided.
About $22,000 has so far been realised from the sale of stock, with the bulk of the remaining stock set to be sold off at auction.
It is not yet known how much creditors would receive back if the company was tipped into liquidation.
De Lage Landen is expected to suffer a “significant shortfall”, the administrators said, and employees entitlements are not anticipated to be paid out in full, with eligible staff instead having to rely on the government safety net, Fair Entitlements Guarantee.
Unsecured creditors of the company included financial consultant Seymour Finance Company ($1.5m), logistics company AAW Global Logistics owed $76,384, American Express ($250,000) plastic fabrication company Avient New Zealand ($33,762) and raw materials and chemicals distributor CCC Ingredients ($132,900).
Others listed were property management company Growthpoint Properties Australia ($98,500), consultancy firm KPMG ($21,110), and Monash University ($42,982), supplier Ningbo U And K International Co. ($199,604) and Shell Energy ($28,174).
The company was housed in a corporate vehicle called Plantabl Packaging and was the trading entity of the group, existing alongside sister business Great Wrap – which held ownership of the intellectual property associated with the products.
Both are owned by parent company Plantabl Holdings, which held the shares in these entities and sourced investor funding to enable the company to conduct its business operations.
Great Wrap and Plantabl Holdings are not in administration.
Mr Kay also started up companies Great Wrap BV and Great Lab BV in Belgium, based on an initial intention to establish a similar business model in Europe.
The administrators said the Belgium expansion plans did not materialise and Great Wrap BV was in the process of being deregistered.
Great Wrap’s website says its mission is to “end the human reliance on traditional plastics”, with the business reportedly diverting over 15 million metres of traditional stretch wrap from landfills.
“Our former careers in winemaking and architecture, led us to Great Wrap when we recognised the sheer impact plastic waste was having on the land,” their website reads.
“There was a materials revolution around us, and everything was changing rapidly – yet plastic stayed the same.
“We knew the technology existed to end plastic waste, but there weren’t any products available. So we invented the products we knew the world was missing.”
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Originally published as Sustainable packaging darling Great Wrap collapses amid $39m liabilities
