EBRD acquires stake in Şişecam’s recycling arm
The European Bank for Reconstruction and Development (EBRD) is stepping up its cooperation with Turkish glass producer Şişecam in a move to help Turkey increase its glass recycling rate and boost its circular economy.
The Bank is acquiring a minority stake in Şişecam Çevre Sistemleri A.Ş., a newly established recycling arm of Şişecam, and is extending a €40 million loan to finance glass recycling equipment and energy efficiency investments.
The Bank has also mobilised an additional €2 million loan from the Clean Technology Fund, a funding window of the Climate Investment Funds, as well as EU grants.
The investment will support Şişecam’s efforts to boost glass recycling in Turkey and contribute to a more competitive, resource-efficient circular economy, which is part of the Bank’s overall strategy to help the countries where it invests tackle global challenges such as climate change.
With over 21,000 employees, production in 13 countries, and sales in as many as 150 countries, Şişecam Group is a global actor in business fields including all main areas of glass such as flat glass, glassware, glass packaging and glass fibre, as well as soda and chrome compounds. Şişecam has been operating for more than 80 years and is the third largest glassware, fourth largest glass packaging and fifth largest flat glass manufacturer in the world in terms of production capacity.
Professor Ahmet Kırman, Vice Chairman and CEO of Şişecam said: “Şişecam is a group fully aware of its global responsibility as part of the international ecosystem and sees the issue of sustainability not only in terms of financial continuity, but as a concept that integrates environment, natural resources, raw materials, consumption, customers, employees and values. We have been working on one of the most comprehensive sustainability and social responsibility projects in Turkey since 2011 to support the transition into a ’recycling society’.
“With EBRD-supported projects, activities like raising public awareness of separating glass waste at source, improving waste collection infrastructure, modernising and increasing the capacity of recycling facilities have been undertaken and the recycling rate has been increased from 8 per cent to 19 per cent. The new joint initiative will contribute to the industrialisation process of the glass recycling sector in Turkey and triple its production capacity, as well as providing know-how. I believe this unique partnership between Şişecam and the EBRD, our long-standing partner, will play a crucial role in the establishment of a sustainable glass recycling system in Turkey.”
Frederic Lucenet, EBRD Director for Manufacturing and Services, added: “Glass is infinitely recyclable and, unlike other materials, recycling doesn’t affect the quality of the final product. At the same time, the recycling rate in Turkey remains very low compared to more advanced western European economies. Utilising cullet glass waste is an economically driven decision. It considerably brings down glass production costs and has huge benefits for the environment in terms of energy and greenhouse gas savings.”
This new joint initiative represents an innovative response to the challenges in the Turkish glass recycling market. Şişecam Cevre Sistemleri will provide its cullet suppliers with state-of-the-art equipment which they wouldn’t be able to invest in otherwise. This equipment will increase suppliers’ collection and treatment capacities as well as the quality of the cullet, strengthening the entire glass recycling supply chain.
Ensuring the sustainability of glass production in Turkey is a major focus for both partners.
Previously, the EBRD has helped Şişecam to increase its glass collection rates. Under a pilot funded by the government of Spain in 2013, Şişecam introduced thousands of bottle banks in several Turkish cities, including Istanbul, Ankara, Antalya, Edirne, Bursa, Konya, Aydın, Adana and Diyarbakir and launched an awareness-raising campaign to encourage households to recycle glass. The success of this initiative paved the way for a €30 million loan from the EBRD which financed the acquisition of new bottle banks, collection vehicles and glass bottle crushers, among other investments. As a result, the amount of glass collected increased considerably and Şişecam is now committed to further increasing the use of cullet instead of mined raw material to produce glass.
Şişecam is a long-standing EBRD partner and the cooperation dates back to 1997. Since then the EBRD has financed Şişecam’s operations in Bulgaria, Russia, Ukraine and later in Turkey with over €385 million. Today, the Bank is a 15 per cent shareholder in Paşabahce, Şişecam’s internationally renowned glass tableware unit.
The EBRD’s new financing to the company is part of the Bank’s Near-Zero Waste initiative in Turkey, supported by the Clean Technology Fund and the EU, which finances investments aimed at minimising waste and increasing resource efficiency in the industry, agribusiness and municipal sectors. It also supports the EBRD’s Green Economy Transition approach which puts investments that bring environmental benefits at the heart of the Bank’s mandate.The EBRD started investing in Turkey in 2009 and currently operates from offices in Istanbul, Ankara and Gaziantep.
To date, it has invested over €7 billion in the country through more than 180 projects in infrastructure, energy, agribusiness, industry and finance. It has also mobilised about €17 billion for these ventures from other sources of financing.