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The Baltic leading environmental management company LLC (SIA) “Eco Baltia vide”, which is part of the “Eco Baltia” group, has signed a memorandum for enhancement of cooperation in the field of development of hydrogen technologies in Latvia. Purpose of the memorandum is to promote a strong and unified development of hydrogen ecosystem and the relevant technologies, as well as to expedite implementation and capacity of hydrogen innovations, infrastructure, production and application in Latvia.

“Development of hydrogen technologies plays major role in the European Green Deal and achievement of climate neutrality goals. Necessity for the development of hydrogen technologies is further consolidated by the crisis of energy resource in Europe which has made everybody step up looking for and using alternative energy resources. As the Baltic leading environmental management company focusing on waste recycling instead of burying in landfill sites, we are already conducting research works on our part to be able to use the non-recyclable waste for gasification and later extracting also hydrogen to power our fleet. There is still a lot to do, but the memorandum marks specific steps to achieve faster and more purposeful development of these technologies in Latvia”, explains Mr Jānis Aizbalts, Chairman of the Board at the LLC (SIA) “Eco Baltia vide”.

Hydrogen is considered one of the possible global ways of decarbonisation with a huge growth potential.

Memorandum, signed along with the LLC (SIA) “Eco Baltia vide” also by more than 20 various organisations, provides for an establishment of consortium for hydrogen technology development. Purpose of the memorandum is to promote strong and unified development of hydrogen ecosystem and the relevant technologies, as well as to expedite implementation and capacity of hydrogen innovations, infrastructure, production and application in Latvia, providing an opportunity for the field of hydrogen to evolve according to the goals set by the European Union, thus both contributing to the national economy of Latvia and enhancing achievements of the climate goals.  

Furthermore establishment of the Latvian Hydrogen Alliance is planned to unify players of the sector and the related parties in a single platform for information exchange, communication, project and cooperation development both nationally and internationally.  Besides, hydrogen roadmap of Latvia for the period until the middle of 2023 and hydrogen strategy for the period until the end of 2023 will be developed.

Memorandum on the development of hydrogen technologies will be signed at the forum “5G Techritory 2022” at the beginning of December.

In order to expand its activities and continue its development, the environmental management company SIA Eco Baltia vide plans to acquire the road and street maintenance company SIA Pilsētas Eko Serviss. The purchase agreement concluded by the parties, the execution of which requires a merger approval of the Competition Council, provides for the acquisition of 100% in the SIA Pilsētas Eko Serviss, SIA PES serviss and SIA B 124. The documents necessary to complete the transaction have been prepared for submission to the Competition Council. The process is expected to be concluded later this year.

Upon conclusion of the transaction, Pilsētas Eko Serviss will become part of AS Eco Baltia group’s companies in the environmental management segment specialising in street and road maintenance. At the same time, it should be stressed that no changes are planned to the existing cooperation agreements and arrangements for both parties’ clients, partners and employees. If the merger is cleared by the Competition Council by then, the acquisition will be completed at the end of December 2022.

“The last two years of Eco Baltia’s environmental management segment’s activities should be characterised by dynamic growth. During this period, we have not only implemented internal consolidation, but also acquired several companies within the framework of the segment to increase our competitiveness, find new opportunities and become a leader in the Baltics. While our subsidiary Ecoservice is one of the market leaders in road and street maintenance in Lithuania, in Latvia we are planning to develop this service more rapidly with the acquisition of Pilsētas Eko Serviss, promoting synergies also with our Lithuanian subsidiary. Pilsētas Eko Serviss has a very extensive and successful experience in the sector, the necessary technical equipment and a professional team of employees, which creates a very good platform for further growth already as being a part of the environmental management segment of Eco Baltia”, says Jānis Aizbalts, Chairman of the Board of Eco Baltia vide and Head of the Environmental Management at Eco Baltia.

Pilsētas Eko Serviss has been on the market for almost 20 years, and we are pleased to call ourselves one of the leading providers of street and road maintenance services in the Riga and the Greater Riga region. We are happy that the company will be able to continue its development and make new investments in the future, but already as a subsidiary of Eco Baltia vide. For our existing clients and employees, these changes will also be beneficial, because being part of a larger group will allow us to plan our investments in future development on a broader scale and with the involvement of the expertise of the entire Eco Baltia, says Alvis Krauklis, Member of the Board and co-owner of Pilsētas Eko Serviss.

Vytautas Plunksnis, Partner at INVL Baltic Sea Growth Fund and Chairman of the Supervisory Board of Eco Baltia: Our strategic objective to develop Eco Baltia as a strong regional leader focusing on sustainable environmental services and recycling is already delivering results – competitiveness and efficiency of our companies are growing, as are consolidated revenue. By expanding our offer in the environmental management segment, we create new value both for customers, employees and investors.

Financing of the transaction is planned by attracting bank funding, and the parties have agreed not to disclose the value of the transaction publicly.

Pilsētas Eko Serviss offers such services as street and road maintenance, water drainage system maintenance and repair works, as well as equipment rental. The company was founded in 2003, and now it is owned by several individuals. In 2021, revenue of Pilsētas Eko Serviss reached 5.7 million euro. The company employs around 80 people.

PET Baltija, one of the largest PolyEthylene Terephthalate (“PET”) recyclers in Northern Europe, has completed the acquisition of 100% of shares of a leading Czech fibre producer TESIL Fibres, a spin-off of SILON. This transaction is set to increase PET Baltija’s annual turnover by more than 50% and ensure the production of higher value-added products by the company.

“This transaction puts PET Baltija on the map as a key international player in the PET recycling sector. Up to this point, we were the region’s leading player in terms of recycled PET production but now our portfolio will also include the production of a finished product – PET fibre. The growth potential of TESIL Fibres as well as its close-knit and professional team serve as an excellent foundation to further the development of the company and make smart use of the synergies between the two businesses. The vertical integration of PET Baltija and TESIL Fibres and a closer cooperation between the two will help us to create more value for our employees, customers and partners,” said Salvis Lapiņš, Chairman of the Board at PET Baltija.

TESIL Fibres is the Czech Republic’s largest producer of PET fibre with 150 employees and an annual capacity of 33 000 tonnes, reaching revenues of €27 million last year. Known for its high production quality standards, the company acts as a primary fibre supplier in the European market for the automotive, hygiene, textile and furniture segments.

Deimantė Korsakaitė, Executive Partner at INVL Baltic Sea Growth Fund and Chairman of the Supervisory Board at PET Baltija, commented: “PET Baltija has more than doubled its revenues since our investment. In parallel to further organic growth and investments in production expansion set to more than triple the existing food-grade rPET capacities, PET Baltija is also pursuing a path of vertical integration, in line with the overall strategy. Following the acquisition, the combined revenues of PET Baltija are set to exceed €100 million, solidifying it as an international player and further strengthening its contribution towards sustainable development.”

The financing for the transaction, which marks one of the largest investments made by Latvian companies in the Czech Republic to date, was granted by Luminor Bank, the third largest provider of financial services in the Baltic States.

Ilze Zoltnere, Head of Corporate Banking at Luminor in Latvia, added: “Even in this difficult geopolitical environment, Eco Baltia group companies are able to show steady growth and continue to develop, including through well-considered investments focused on expansion and new markets. We are pleased to support the company’s objectives by financing a transaction of a significant scale, which is a strategic step to strengthen the presence in the international market and continue sustainable growth.”

Legal experts from Sorainen acted as advisors for this transaction. Mantas Petkevičius, Partner at Sorainen, concluded: “We are delighted to see PET Baltija, the Baltic market leader and one of the largest PET recyclers in Northern Europe, expanding and becoming a truly international vertically integrated market player. We hope that the expansion of the region’s champions into international markets will become a continuous trend.”