Polish glass cullet producer Krynicki Recykling set to consolidate market

Krynicki Recykling, a Polish company that sources and processes container crushed glass for recycling, is looking for acquisition targets to consolidate the market, Polish economic daily Puls Biznesu wrote Oct. 2.

“We are not interested in companies with glass processing technologies,” Adam Krynicki, CEO of Krynicki Recykling, told the newspaper. “We want to take over our competition’s access to resources. We are currently in talks with three potential targets with revenues of less than PLN 10 mln, each with access to tens of thousands of tons of glass,” Krynicki added.

The company plans to finance the acquisitions by drawing credit. The planned expansion is linked with the completion of a PLN 50 mln investment in the company’s third glass processing factory in Pelkinie. Almost half of the funds came from EU funds which prioritize recycling projects.

“Next year we will be capable of processing some 200,000 tons of glass in all the company’s facilities,” Adam Krynicki commented. “Achieving this goal without consolidation is out of reach. The new facility’s maximum capability will not be exploited anyway, because there just aren’t enough resources in Poland.”

According to official data compiled by the Ministry of Environment, the yearly average of glass that could be processed in Poland amounts to some 510,000 tons.

“We estimate that realistically we only process some 300,000 tons of glass per year in Poland,” Krynicki noted. “Tenders will be dominated by companies with technology because glasswork facilities are setting stricter quality standards and they prefer to have clean glass and a stable supplier. That is why only three-four companies out of the existing ten will exist in the market.”

Krynicki estimated that both the company’s net profit and revenues will be in the double digits. Krynicki Recykling posted a net profit of PLN 1.3 mln Q1-Q4, on revenues of PLN 26.9 mln.