“Like most companies in Romania, GreenGroup is currently facing difficulties in securing a workforce and is on the verge of importing labor from Asia. At the same time, we are affected by constantly rising electricity and gas prices, and especially the uncertainty of access. soon (here we are talking about the ability to disconnect at critical moments, during the winter period), ” Green Group President Konstantin Damov told the Diplomat Bucharest newspaper.
“We aim to strengthen current activities by bringing technology back to the level of artificial intelligence, as well as diversifying the types of waste we recycle (textiles, construction and demolition, flexible packaging, etc.). we are thinking about our presence in Central and Eastern Europe, investing in new capacities as well as acquiring companies in the processing industry. We want GreenGroup’s presence in the region to create a geographical arc, starting from the Baltic States and ending with the Southern Balkans. We believe that this is not only possible, but also necessary, given that this region of Europe is very underdeveloped in terms of waste collection and utilization in terms of a circular economy.
How did the start of the war affect the activities of the Green Group?
Neither the sales market nor the supply lines were affected by the outbreak of the war, as GreenGroup operates over 90% of the EU market. Neither Ukraine nor Russia were major markets, so the impact on trade was minimal. However, ever-increasing energy prices are reflected in production costs and, of course, in the final price for customers.
What is the impact of supply chain issues?
Logistics chains, in our case, are short, and the market we operate in is the European market. As regional players, we are less affected by the logistical issues raised. I might even say that the prestige we have in this context creates a slight advantage for us. This is because the mode of transport used for delivery or delivery is road and we can only guarantee delivery within 48 hours. Thus, we are less affected by the logistics chain compared to players using global ocean (container) transportation – prices increase 8-10 times, and delivery times exceed 90 days.
How have you been affected by rising energy and natural gas prices?
The rise in electricity and natural gas prices had a direct and immediate impact on production costs. Passing them on to the prices of our products is constantly resisted by customers who fear an inflationary effect in the chain by increasing the price of the final product (e.g. the automotive industry).
On the other hand, during the logistics crisis, along with the continuous increase in oil prices, there is also a bright side for us – all industries are showing more interest in processed raw materials. This is because the energy consumption of recycled materials used in manufacturing processes is reduced by 50 to 90 percent compared to virgin (new) materials. Example: Up to 50 percent off glass, over 90 percent off aluminum, and 70 percent off PET, etc.
What are the main problems faced by GreenGroup?
Like most companies in Romania, GreenGroup is currently struggling to secure a workforce, as it is on the verge of importing labor from Asia.
At the same time, we are affected by constantly rising electricity and gas prices, and especially the uncertainty of whether you will receive them soon (we are talking about the possibility of disconnection, at critical moments, during the winter period).
Furthermore, since our sources of supply are exclusively post-consumer waste, we suffer from a very mediocre local collection performance, which is why Romania is today the penultimate in the European Union. To combat this problem, GreenGroup is still importing additional classified waste from other member countries.
Which companies in the group performed best in the first half of the year?
All the companies performed well, which shows their ability to withstand even the current conditions. The only threats we have in the field of plastic recycling, one explanation is that the demand for plastic (PET packaging) comes, as I mentioned earlier, from imports.
These findings reinforce our belief that the circular economy, the model adopted and practiced by GreenGroup, is the solution to all the crises we have discussed so far. Here we are talking about the use of locally produced post-consumer waste as renewable sources of industrial production.
What are the investment projects this year?
With the support of Abris Capital Partners, whose portfolio includes GreenGroup, we secured 127 million this year. ambitious M&A strategy. .
The first step was to establish a circular innovation unit that will invest in start-ups or expand into the circular economy. The division’s first acquisition was SIGAD, a Romanian developer of environmental reporting software, with which we marked a new phase of growth for GreenGroup, focusing on unique businesses that are technological in nature or contribute to resource efficiency and lower carbon goals. at the global level.scientist.
UAB Ecso, a Lithuanian low-density polyethylene (LDPE) recycler, was GreenGroup’s second recent deal and a key step in our strategy to become a major player in polyolefin recycling in the region. This is already the second investment in the Lithuanian market, because here we managed to create a successful closed-cycle recovery model of plastic resources (PET and polyolefins), which we want to expand in other countries.
In all these industrial development projects, there is a need and urgency to achieve the greatest possible supply of electricity and gas, so we proposed electricity and heat energy production decentralized and from renewable sources (biomass). , photovoltaic).
What is the group’s medium-term development strategy?
We aim to strengthen existing activities by bringing technology back to the level of artificial intelligence, as well as diversifying the types of waste we recycle (textiles, construction and demolition, flexible packaging, etc.). At the same time, we are considering increasing our presence in Central and Eastern Europe by investing in new capacity as well as acquiring companies in the processing industry. We want the regional GreenGroup to create a geographical arc starting in the Baltic States and ending in the Southern Balkans. We believe that this is not only possible, but also necessary, given that this European region lags far behind in terms of waste collection and utilization in terms of circular economy.
GreenGroup has the advantage of benefiting from the strong backing of Abris Capital Partners, a keen sustainability investor, and is proposing that all of this development be done carbon-neutral.