The deal, which Transcend called "the cornerstone" of its latest funding round, will see the Welsh manufacturer ramp up its expansion plans in the UK, Europe, Asia and North America.

Transcend, which specialises in food-safe moulded fibre packaging for the retail and catering industries, currently has installed capacity to produce several billion straws per year, and will be investing to ramp up its capacity for straws, lids, and other moulded fibre products.

The firm said the new funding round would also see it put a "significant focus" on research and development.

Investor Itochu, one of Japan’s largest diversified trading companies, known as sogo shosha, has turnover of around $100bn (£80.7bn). 

Its fibre division, Itochu Fibre, already has a significant stake in Finnish pulp and paper producer Metsä’s fibre business, after buying 24.9% of its shares in 2013. In 2018, the two companies launched a joint venture test plant for wood-based textile fibres.

Transcend said Itochu’s existing partnership with Metsä made it the ideal company to supply significant volumes of softwood and hardwood pulp. It added that Itochu’s expertise would likewise prove a powerful aid in its goal of becoming one of the largest moulded fibre producers in Europe.

With 200 employees at its Welsh site, and a further 100 spread across its two production sites in Italy and Eastern Europe, Transcend said it was aiming to grow its revenues to more than £35m in 2023.

The investment comes just months before the implementation of extended producer responsibility (EPR) for packaging in the UK, where companies that turn over £1m or more, or produce more than 25 tonnes of packaging annually, have to collect and report their packaging data to the government.

The European Commission has likewise proposed changes to the EU’s Packaging & Packaging Waste Directive, which aims to cut packaging waste and is likely to be adopted in 2024.

Lorenzo Angelucci, Transcend’s CEO, said: “Sustainable innovation and an evolving regulatory landscape are continuing to shift priorities in packaging, and we are working with a wide range of leading brands to enhance the sustainability of their packaging portfolios. 

“We see moulded fibre as the leading alternative to single-use plastic in a broad range of applications, both to replicate required performance objectives and achieve the potential to be recycled at scale. 

“Our partnership with Itochu will allow us to progress from strength to strength as we look to accelerate the pace of sustainable innovation we can provide the market.”

Jin Asada, group director of Itochu Europe, said he was pleased with the partnership.

“As one of Japan's largest companies, we are committed to supporting the global shift towards sustainability and the realisation of a decarbonised society. 

“Our investment will help Transcend Packaging expand its reach into new markets and develop one of the largest moulded fibre production facilities in Europe. 

“Together, we aim to save billions of pieces of single-use plastic from landfills annually, while unlocking new product categories for paper and fibre-based sustainable packaging products.”

Founded in 2017 and based in Caerphilly, Transcend Packaging counts brands like McDonald’s, Starbucks and Ferrero as customers. 

Transcend prints in-house with an HP Indigo 30000 and a KBA litho press, and uses Bobst cutter-creasers.