The European Bank for Reconstruction and Development (EBRD) has become a shareholder in the fast-growing Turkish tile manufacturer Graniser Granit Seramik Sanayi ve Ticaret. The EBRD’s €10 million equity investment will meet the company’s working capital needs and finance their new capital expenditure plan. Obtaining the EBRD finance has also helped Graniser to attract a comprehensive €50 million long-term financing package from two leading local banks, Yapi Kredi and DenizBank.
The EBRD’s contribution will enable Graniser to produce larger tile volumes as well as more sophisticated designs to keep up with industry trends, particularly in export markets where the company sells 45 per cent of its products.
Announcing the deal, EBRD Director for Turkey Mike Davey said: “Graniser is a profitable business with a good growth track record and we are proud to become its shareholder. Providing long-term capital to enterprises like Graniser is at the heart of our strategy in Turkey. We are particularly proud that our involvement has brought additional comfort and confidence to Yapi Kredi and DenizBank, and has catalysed significant long-term financing well beyond our own investment.”
Graniser, majority owned by Bancroft 3 LP, a private equity fund in which the EBRD is a limited partner, produces and sells single and double-fired floor, wall and glazed tiles used in kitchens and bathrooms as well as in retail and industrial locations. Established in 1997, Graniser has grown to become Turkey’s fourth largest ceramic tile manufacturer with an annual production of 19 million m2 of tiles. It is also one of the largest tile exporters in the country, selling products to regional neighbours such as Azerbaijan, Georgia, Greece, Israel and Romania, as well as to countries in North America and western Europe.
Graniser’s CEO Erol Hacıoğlu said, “With the EBRD as a shareholder and Yapi Kredi and Deniz as financing partners, we now have an even stronger financial base and will be able to further increase our exports to 60 per cent of total turnover. Furthermore, we will be able to carry out strategic investments to optimise our product quality and further increase capacity.”
The Yapi Kredi and DenizBank consortium, led by Yapi Kredi, is pleased with the transaction as Graniser represents an important addition to the Aegean region portfolios of both banks. The project is also further testimony to the banks’ effective co-operation with the EBRD, paving the way for future collaboration on similar transactions.
The EBRD loan comes under the Local Enterprise Facility, a €400 million facility for business investment in Turkey, south-eastern Europe (Albania, Bosnia and Herzegovina, Bulgaria, Croatia, FYR Macedonia, Kosovo, Montenegro, Romania and Serbia), and the southern and eastern Mediterranean (SEMED) region (Egypt, Jordan, Morocco and Tunisia). It provides a wide range of flexible financial products, including equity, quasi-equity and debt financing to address the needs of companies.
Increasing support for small and medium-sized enterprises is one of the ways in which the EBRD is boosting growth in Turkey. Since the start of its operations there in 2009 the Bank has invested more than €3 billion in the country. Last year Turkey became the EBRD’s second-largest country of operations by annual business volume, with €1 billion of new investments in 2012 alone.