New Zealand has opened its first manufacturing plant, that will use recycled polyethylene terephthalate (PET) waste to create food grade PET packaging, on Wednesday .

The launch comes at an opportune time as New Zealanders currently consume around 17,000 tonnes of PET plastics annually.

"New Zealand retailers now have a real choice in the packaging they choose to use. It's long awaited, very exciting, and the first step towards the holy grail of closed loop recycling in New Zealand," Mike Sammons, Sustainability Manager for Foodstuffs NZ, said.

He said sustainable packaging has now become essential. "If you can demonstrate you're supplying a more sustainable product for the same price as your competitor you've got a marketing advantage."

According to Derek Lander, Flight Plastics Director, close to 90 per cent of New Zealanders want their packaging to be recyclable as well as contain possible recycled materials.

The New Zealand plant in Lower Hutt will enable food producers to buy packaging made locally from imported recycled PET flakes, for the first time.

Being able to manufacture RPET plastic products right here at the exact size and volume required means we can respond quickly and efficiently to changing customer demands, Mr Lander said.

Already, expansions are on the drawing table for the plant to produce the RPET flakes from PET drinks containers and food packaging collected at kerbside in New Zealand.

"We are currently looking at the economics of installing a wash plant to do this," Mr Lander said.