Largest Baltic PET recycler PET Baltija agrees to acquire leading Czech fibre producer

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PET Baltija, one of the largest PolyEthylene Terephthalate (“PET”) recyclers in Northern Europe, today announces an agreement to acquire a leading Czech fibre producer Tesil Fibres s.r.o, a spin-off of SILON s.r.o. Once closed, this transaction will become one of the largest investments by a Latvian company in the Czech Republic to date.

This vertical integration transaction will subsequently increase PET Baltija’s current revenues by more than 50% while also making it an international company. For SILON, the transaction will enable it to fully focus on both the production and development of the highest quality polyolefin-based performance compounds.

Fibre production has been part of the traditional operations in Planá, Czech Republic dating back to 1966, and being integral part of SILON s.r.o. The operations spun-off to Tesil Fibres encompass country-leading annual staple fibre production capacities of 33 000 tonnes and c. 150 employees.

Tesil Fibres is a primary supplier to the European market, covering industries and sectors that include automotive, hygienic, textile and furniture. It is also well known for its high quality standards and last year its fibre division recorded sales of €27million.

Salvis Lapiņš, Chairman of the Board at PET Baltija, commented:

“This deal will really put PET Baltija on a map as a key international player for the sector. We recognise and are excited by Tesil Fibres’ impressive high growth potential and its dedicated team of professionals. Working closely with the team and other key stakeholders, we plan to develop the company further, accelerating its growth and creating real value for all those involved. By ensuring the supply of best-in-class recycled PET materials, we will look to significantly contribute to the growth of the Tesil Fibres business and add greater product differentiation to it. It is also important to mention that through these developments, the overall volume of recycled PET will also increase.”

Deimantė Korsakaitė, Executive Partner at INVL Baltic Sea Growth Fund and Chairman of the Supervisory Board at PET Baltija, added:

“This agreement to acquire reinforces INVL Baltic Sea Growth Fund’s goal to significantly expand PET Baltija through both organic growth and bolt-on acquisition strategies. Since our initial investment, PET Baltija alone has more than doubled its revenue and is on track to finalise an organic growth expansion project that will more than triple its food-grade PET production capabilities. This deal will cement the company as a truly international vertically integrated market player that is committed to sustainability and tackling environmental issues. This represents a significant development and leads to become a €100million+ revenue company.”

Šuchrat Saidov, CEO at SILON s.r.o. concluded:

“Following a series of consultations and extensive market research, we decided that the best route to success for the fibre division would be to identify a respected strategic partner who can further grow and develop it. We are delighted to report that we have found a solution which, we believe, will be the best possible outcome for fibre production in Planá. The SILON Group will now focus all its growth and development efforts towards compounding business.”

Both, SILON and PET Batlija emphasise that part of this agreement is a detailed handover plan, primarily targeting and ensuring that there will be no changes to the current service offering that highly valued partners, customers, suppliers, employees or other key stakeholders receive.

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