Advent International and its Polish affiliate, Copernicus Capital Management, led a $3.2 million (ecu 2.9 million) development capital funding for Slag Recycling, a scrap and slag recycling operation based near Krakow.
Slag Recycling is a joint venture with Huta Sendzimira (HTS), Poland’s second-largest steel mill, which is currently being privatised. The private equity backers have brought in St Paul’s Development, a UK land development and reclamation company, to act as their industrial partner. The investors control a majority of the company.
The new company is acquiring HTS’s slag and scrap recycling activities; it has the exclusive right to purchase slag from the HTS steel mill, reselling scrap to the mill after processing. Slag Recycling will introduce improved recycling methods to boost productivity and is developing a proactive marketing programme for sales to third parties. Additional senior management will be seconded to Slag Recycling from the UK.
As Poland’s housing and road construction sectors accelerate, a shortage of construction aggregate is making itself felt. This in turn should increase slag sales. Slag Recycling is particularly well placed to benefit from this demand, given the number of large scale construction projects in the Krakow region.
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