Month: January 2022

INVL Baltic Sea Growth Fund (“the Fund”), the largest private equity investment fund in the Baltic region, has completed the acquisition of a controlling stake (52.81%) in Eco Baltia, the largest environmental management group for plastic recycling and waste collection in the Baltics.

The deal sees the European Bank for Reconstruction and Development (“EBRD”) retain their 30.51% stake in Eco Baltia and Maris Simanovičs, Chairman of the Management board of SIA Eco Baltia grupa, retain a 16.68% stake (via Penvi Investment Ltd). Both parties have subsequently entered into a shareholders’ agreement with the Fund.

Vytautas Plunksnis, Partner at the Fund, commented: “We plan to invest significant capital into Eco Baltia’s recycling capabilities and establish it as a clear market leader of the circular economy in the Baltic region, through the delivery of high quality and sustainable recycling services. The world we live in is now using more resources than the planet can produce and so reusing what we have in a sustainable manner is of critical importance. We intend to focus on food grade recycled plastics (rPET) capacities expansion that will ultimately contribute to a reduction in carbon footprint and promote environmental sustainability.”

In 2019, Eco Baltia’s group revenues increased by 9% to €70.62 million, with more than 60% of its revenues coming from the recycling sector alone. The group employs more than 800 people and its largest subsidiaries are PET Baltia, Eco Baltia Vide, Nordic Plast and Latvijas Zalais Punkts respectively.

Two Partners at the INVL Baltic Sea Growth Fund, Vytautas Plunksnis and Deimantė Korsakaitė will join Eco Baltia’s supervisory board together with an independent member and waste management expert, Jurgita Petrauskienė. The EBRD will be represented by Peter Hjelt and Maris Simanovičs by Gints Pucens.

Deimantė Korsakaitė, Executive Partner at the Fund, commented: “Investing in proven, leading Baltic companies which clearly demonstrate further growth potential is one of the Fund’s core investment themes. Eco Baltia sits at the forefront of the circular economy for the Baltic region and therefore meets this criterion. This deal represents the third company to join our portfolio and will allow us to capitalise on the growing importance of environmental concerns by focusing on both recycling and lifestyle sustainability enhancement measures.”

Ian Brown, Head of Baltics at the EBRD, commented: “We are excited to support a leading private equity fund in the Baltics and growing Eco Baltia as we seek to create real value in an ever more important circular economy model.”

Maris Simanovičs, Chairman of the Management board of SIA Eco Baltia grupa, commented: “We are pleased to attract such a major Baltic investor like the INVL Baltic Sea Growth Fund. With this new direction for the company, we look forward to a growth phase that will doubtless open up fresh opportunities and key markets globally for the group. This internationalisation is particularly important for the waste recycling industry in order to partner and work with major international companies and to further expand our Eco Baltia network worldwide.”

INVL Baltic Sea Growth Fund

INVL Baltic Sea Growth Fund with its total size of €165mn is the largest private equity fund in the Baltics with the European Investment Fund (“EIF”) acting as its anchor investor.

The EIF has committed €30mn with the support of the European Fund for Strategic Investments, a key element of the Investment Plan for Europe (or the ‘Junker Plan’), as well as allocating resources from the Baltic Innovation Fund, the “fund of funds” initiative developed in cooperation with the governments of Lithuania, Latvia and Estonia. This aims to increase capital investment in high growth potential small and medium-sized enterprises in the Baltic States.

The Fund seeks to assemble a diversified portfolio of companies, targeting majority or significant minority stake deals and writing tickets of €10mn to €30mn, that showcase high growth potential and the ability to compete on a truly global basis.

The Fund is focused on the Baltic States and the neighbouring regions of Poland, Scandinavia and Central Europe specifically. The Fund so far has invested in two companies within the healthcare and civil engineering sectors.

The Fund is managed by one of Lithuania’s leading asset management companies INVL Asset Management, which is part of the Invalda INVL group.

INVL Asset Management is part of the Invalda INVL, one of the leading asset management groups in the Baltic region. The group’s companies manage pension and mutual funds, alternative investments, individual portfolios, private equity assets, and other financial instruments.

Over 200,000 clients in Lithuania and Latvia and international investors at the end of 2019 have entrusted the group with more than €1bn of assets under management. Active since 1991 and with a solid track record, Invalda INVL boasts 28 years’ worth of experience in managing private equity assets in the Baltic countries and CEE landscape while developing companies into best-in-class market leaders.

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In 2019, the JSC “PET Baltija”, Latvian PET bottle recycling company, which is a part of “Eco Baltia grupa”, reached the highest recycling volumes in the company’s history. Purposefully working on the efficiency and productivity improvements, last year the JSC (AS) “PET Baltija” recycled 40,895 tons of PET bottles, representing 7% over the indicator of 2018, when the volume accounted for 38,075 tons. The company exports the end products in the volume of nearly 100%.

Māris Simanovičs, Chairman of the Board of “Eco Baltia grupa”: “The year of 2019 was rich in challenges for the European recycled raw material producers. It was determined both by drop in oil prices, which directly affected the market price level of recycled raw materials, and by the process of conclusion of the US and China Trade Agreement. However, investments in productivity and efficiency helped the JSC “PET Baltija” to strengthen its positions as the leading polymer material recycler in the Baltic States and retain its market shares in Europe. However, this year, in light of the rapid drop in oil prices and downtime of economics in a number of the European countries, will be a complicated one for the recycled raw material producers. Therefore, it is important that the support instruments for exporters are wellconsidered and help retain both the production volumes and jobs.”

Thanks to higher production capacities, last year’s turnover of the JSC “PET Baltija” reached 37.22 million euro, representing 7% over the indicators of 2018, when it was 34.70 million euro. Whereas, in light of the low prices of fresh raw materials in the global market, as well as increase in the raw materials purchased by the company and transport costs, the company’s profit accounted for 164.12 thousand euro in 2019 (in 2018, the company’s profit was 1.89 million euro).

Kaspars Fogelmanis, Board Member of the JSC “PET Baltija”: “Our recycled raw materials produced of PET bottles are used by packaging and plastic product producers across the globe, including international brands. In 2019, we reached our highest production volumes so far. However, also this year, despite the crisis, we have continued uninterrupted production process, we’ve been developing production of PET food packaging pellets and working consistently to retain our production volumes also in the field of non-food raw material segment and to be ready for the moment, when Western European automotive industry resumes active manufacturing process.”

Through the recycling of PET (polyethylenterephthalat) bottles, the JSC “PET Baltija” produces high quality recycled raw materials – flakes and pellets. In 2018, the company established a separate food packaging raw material production unit, where, through the recycling approximately 9 thousand PET bottles, 6–7 tons of PET pellets are produced on annual basis, further used for the production of food packaging. The company produces 15 various types of PET recycled raw materials, furthermore, the production process has been developed so far that production by-products (for example, labels of bottles and caps) are also recycled into new raw materials. Thus, the company also promotes development of circular economy. JSC “PET Baltija” employs more than 200 employees. The company is a part of “Eco Baltia grupa”, which is the largest environmental and waste management group of companies in the Baltic States ensuring full waste management circle from collection and sorting to secondary logistics, wholesale and recycling of raw materials. “Eco Baltia grupa” employs more than 830 employees, and its consolidated turnover in 2019 was EUR 70.62 million. Additional information: Daiga Buča Press Secretary Eco Baltia Group Ph. +371 26588715 daiga.buca@ecobaltia.lv www.ecobaltia.lv www.petbaltija.lv

The largest environmental management and recycling company group in the Baltic states AS Eco Baltia closed 2020 with its biggest turnover yet – 74.95 million euros, which is 6% more than in 2019 despite the impact of the pandemic on the international markets, including fluctuations of secondary resource prices. Meanwhile, the Group’s total – normalised EBITDA was 10,1 million euros.

Māris Simanovičs, Chairman of the Board of AS Eco Baltia: “Last year while we continued to work within the local market improving waste management and sorting in the Northern District and Vidzeme Suburb of Rīga, as well as in Latvian Districts, the idle time created by COVID-19 within the European industry sector in the second quarter of last year significantly impacted the operation of our processing plants, including profitability. An important factor was the rapid fluctuations of oil prices, as well as global macroeconomic processes that resulted in a significant increase of PET raw material supply from China in the European markets, thus decreasing the price of PET secondary raw materials. Likewise, there was a marked decrease in the demand for ready-made products from polymer materials. However, despite this we have managed to maintain our position within the Baltic States and also use the pandemic to put forward long-term goals that already allow us to look at further development scenarios, while simultaneously working hard on making the operation of the group’s companies increasingly efficient.

The increase in the turnover of AS Eco Baltia was mainly prompted by waste management companies expanding market shares within Latvia. Certain processing sector positions also showed notable growth in 2020. Despite the COVID-19 crisis causing severe fluctuations in oil prices and thus having an effect on the international prices of recycled raw materials, PET Baltija (Eco Baltia’s PET bottle recycling facility) processed more PET bottles than ever in its history, 46 thousand tonnes, i.e. 14% more than in 2019, when the plant handled 40 thousand tonnes. As a result, the Group succeeded in overcoming the consequences of the pandemic, and ended the year with a normalised EBITDA of 10.1 million euros. Furthermore, UAB BSGF Salvus, a subsidiary of INVL Baltic Sea Growth Fund, one of the biggest private investment funds in the Baltics, acquired 52.81% of AS Eco Baltia shares, thus leading to expectations of the Group’s leading position as the steering force of circular economics in the Baltic region and Europe strengthening even further

AS Eco Baltia Chairman of the Council Vytautas Plunksnis: “Since its establishment, Eco Baltia has shown stable growth, proving its competitiveness at the Baltic and also European level. Internationalisation is particularly important in the recycling sector because it grants the opportunity to work with large international companies and to extend the „Eco Baltia” cooperation network in the world. With the growing importance of the circular economy in the global economy, in the future development of “Eco Baltia” and its companies, we will focus even more on the development of recycling competencies, especially in the segment of recycled PET raw materials.”

One of the most strategic priorities in the group’s schedule will be increasing the production capacity of food-safe secondary PET resources and strengthening their position within the European market. Therefore, in 2021 Eco Baltia will continue developing investment projects, perfecting services and products and improving customer service, thus encouraging quicker and a more sustainable further growth of the group. Furthermore, Eco Baltia has made significant steps by becoming a climate positive company, i.e. their environmental impact is lower than the total CO2 emission saving which they can achieve by focusing on waste sorting and recycling.

Eco Baltia offers a full range of waste management services: from collection and sorting, to logistics, wholesale and recycling. The Group’s 2019 turnover rose 9% reaching EUR 70.62 million, compared to 64.78 million in 2018. Net profits increased 8%, up to EUR 2.54 million (2.38 million in 2018). In Latvia, the Group employs some 900 people, and its company portfolio includes such market leaders as PET Baltija, “Eco Baltia vide”, Latvijas Zaļais Punkts and Nordic Plast.

Eco Baltia’s shares are owned by INVL Baltic Sea Growth Fund (52.81%), European Bank for Reconstruction and Development (30.51%) and the management of the company (16.68%). Additional information: Alise Zvaigzne PR specialist Eco Baltia Group Phone +371 28780467 alise.zvaigzne@ecobaltia.lv www.ecobaltia.lv