Veolia Environnement SA is counting on the acquisition of a Dutch polypropylene recycling and compounding company to be the cornerstone for some very big plans.
Paris-based Veolia sees the purchase of AKG Kunststof Groep of Vroomshoop, the Netherlands, as part of a larger plan to do more business in what it calls a “circular economy” where resources are recaptured and reused instead of being thrown away.
AKG Kunststof only has 53 employees and sold 37,000 metric tons of recycled material last for sales of 34 million euros ($37.8 million) last year. That's dwarfed by Veolia's $29 billion in annual sales and 180,000 employees around the globe for the environmental services company.
But, in AKG Kunststof, Veolia sees a company that will become a center of expertise for PP recycling, compounding and manufacturing.
“This operation is the next natural step for Veolia in its strategic transformation and development,” CEO Antoine Frerot said in a statement. “Our growth on new thriving markets and our ability to provide solutions for the recovery and production of raw recycled materials have demonstrated the Group's ability to turn waste of some into resources for others.”
Solid waste and recycling companies commonly are happy to collect, sort and bale what can before sending those raw materials off to plastic processors or paper mills or metal companies for actual transformation into new raw materials or finished goods.
Veolia, with this deal, is moving into the recycled PP reprocessing field. AKG Kunststof is described by Veolia as “a specialist and custom manufacturer of a broad assortment of high-quality PP granulates, which are sold to manufactures of plastic products.”
The company uses about 90 percent post-consumer PP, and the recycled plastic goes into making horticultural, infrastructure, electronic appliances, automotive and packaging products, Veolia said.
“The Vroomshoop facility will be the cornerstone for the expansion of Veolia's European platform of recycled raw plastic materials manufacturing,” the company said.
Wadinko NV, a private equity fund in Zwolle, Netherlands, that sold AKG Kunststof to Veolia, will retain a small interest in the company and have a seat on its board.
“The prospects for AKG in terms of market growth and profit are indeed favorable and together with Veolia we hope to accelerate this growth and as a result increase employment in the region. This is one of the primary objectives of Wadinko: promoting business and employment in our region,” said Rene Wolfkamp, CEO of Wadinko, in a statement.