Brazilian fashion retailer Riachuelo has commissioned an industrial-scale textile recycling hub called Guara Circular in the northeast of the country — the first facility of its kind in Brazil's northeast region and the first cotton-to-cotton closed-loop recycling project in Latin America.

The hub integrates the separation, opening and spinning of textile waste within a single system. The plant where it operates handles about 40% of Riachuelo's merchandise production and is the largest integrated textile mill in Latin America. The project was developed with the participation of Cotton Move and Evotex.

Looking at operating data, Guara Circular has already converted 181 tonnes of textile waste into new yarn, and plans to continue reusing more than 1.2 million kilograms of pure cotton cutting scraps generated by the factory. The recycled fiber has already entered end products: Riachuelo launched a collection of more than 41,000 pieces, including jeans made of 100% cotton containing 25% recycled fiber.

What this model attempts to address are the inherent difficulties of mechanical recycling of cotton textiles. Mechanical recycling can reduce dependence on virgin fiber, but repeated processing shortens the fiber, which in turn affects yarn quality; blended materials, elastane contamination and inconsistent waste quality all make recycling harder. Riachuelo's approach is to place waste generation, recycling, spinning and finished-product manufacturing within the same industrial ecosystem, forming the starting point of a closed loop.

On market size, Brazil's textile recycling market is valued at about USD 169.2 million in 2026, with cotton listed as its largest material segment.

For the industry, the value of this case lies in providing a workable fiber-to-fiber recycling template. But the next test is also clear: how to extend such models from factory-controlled waste to post-consumer textiles — the collection, sorting and fiber quality control of the latter are all far more difficult.

Source: Brazil scales cotton-to-cotton recycling through an integrated textile hub · Originally published 2026-09-22