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Thanks to efficiency and productivity improvements, active work in export markets and higher selling prices of finished products in the first half of 2022, the net turnover of the PET recycling company JSC PET Baltija increased by 56% compared to 2021 reaching EUR 78.9 million euro last year. While the situation on the export markets was favourable in the first half of last year, allowing the company to increase turnover and production capacity, a strong drop in both demand and prices was expressly obvious since autumn, which has not prevented the company from closing the year with the best turnover indicators ever.
In general, in 2022, the JSC PET Baltija has strengthened its positions as the largest PET recycler in the Baltics with stable and growing market shares in Europe. According to the company's estimates, it already has a market share of around 4% in the European PET recycling market.
"With almost 100% of our production exported, our performance in 2022 was significantly affected by developments in international markets. When Russia started invasion of Ukraine, the JSC PET Baltija immediately ceased cooperation with Russian and Belarusian partners and customers. Although these markets accounted for a small part of the company's operations, thanks to timely risk management, we were able to quickly replace the flows of goods coming from these countries and find customers for the finished products in Western Europe. Thus, impact on turnover and other indicators was successfully amortised. Overall, we have continued steady development last year, focusing on increasing production capacity and improving efficiency. The main investments have been made in the purchase of new production equipment and the improvement of technological processes in the plants", says Salvis Lapiņš, Chairman of the Board of the JSC PET Baltija.
In 2022, the JSC PET Baltija recycled 46,126 tonnes of PET bottles. This is slightly less than in 2021, when the company recycled the all-time largest amount of PET bottles - 49,726 tonnes. Decrease in the volume of raw materials recycled is partly attributable to the installation of a sorting machine for the separation of bottle labels last spring, ensuring greater efficiency in the PET flake production process. There is also a slight decrease in output of finished products, namely, a total of 54,106 tonnes were produced in 2022, compared to 54,319 tonnes in 2021. Changes in output are attributable to drop in demand and prices of finished products in the second half of 2022, when the market was strongly affected by the energy price crisis and supply risks, recession risks and rising inflation.
On 1 February last year, a deposit system for beverage packaging was introduced in Latvia. The JSC PET Baltija is a shareholder of the LLC “Depozīta Iepakojuma Operators” enduring recycling of all the PET bottles transferred within the Latvian deposit system. In effort to promote the circular economy and efficient use of resources, last year, the JSC PET Baltija ensured recycling of 2,727 tonnes of PET bottles, which were handed over to the Latvian deposit system.
Continuing its strategic development and expansion of production capacity, especially in the segment of recycled materials of food-grade packaging, in mid-2022, the company started development a project for the construction of a new production facility in Olaine in cooperation with the industrial buildings builder and developer LLC Piche. Equipment for the new production unit intended for the production of food-grade packaging PET pellets has also been ordered. The project is scheduled for implementation in several phases. The total area of the building will be approximately 26,250 m2and it will be one of the largest industrial buildings in Latvia. Investments of the JSC PET Baltija in the new equipment will total more than 10 million euro.
Within the framework of its international expansion, in September 2022, the JSC PET Baltija acquired TESIL Fibres, the leading Czech producer of polyester fibres, which also uses recycled PET flakes in production, thus ensuring also production of the final product - polyester fibre - within the Eco Baltia Group.
Work on our strategic development will continue also this year, strengthening our competitiveness in international markets and, where possible, expanding our position as a processing company at European level. In the course of future development, it is planned to invest in improving the company's processes and increasing efficiency, including new technologies, as well as in upgrading existing technologies, which will enable an even higher proportion of purchased recycled polymer materials to be recycled, with the maximum amount of these materials being returned to the re-circulation.
This year, the company will also continue work on the implementation of quality standards to ensure and certify food-grade material, as well as to increase production volumes by providing the right quality and quantity of recycled raw materials to meet the needs of potential customers.
