- Medhat Khalil: The transition of ownership to proficient investors aims to maintain the company’s annual growth rates of 20%
- Ahmed Khalil: Exiting the PET recycling industry came as part of Raya Holding’s strategy to achieve the highest possible value for our shareholders
- Hossam Hussein: We are completing all the necessary procedures to ensure a smooth transfer of shares
Raya Holding for Financial Investments announced that it has signed the business sale agreement of its subsidiary, BariQ for Advanced Manufacturing, with Intro for Waste Management, a subsidiary of Intro Group. The sale includes 98.76% of BariQ shares owned directly by Raya Holding, in addition to 1.24% of shares owned indirectly by Raya’s subsidiaries, with a total number of shares amounting to 6.5 million shares.
BariQ’s BoD has authorized the head of the board to take the necessary actions in order to close the deal valued at 490,750,000 EGP (four hundred ninety million seven hundred fifty thousand Egyptian pounds only) – the cash consideration for the sale of shares. Both sides shall work to fulfill a number of conditions stipulated in the contract of sale before completing the transfer of the shares in question.
Medhat Khalil, Chairman of Raya Holding for Financial Investments, has expressed his pleasure with the deal and the cooperation with Intro Group to continue the growth trajectory of BariQ, in light of the national plans to invest in waste recycling and rely on clean energy.
“BariQ achieves an annual growth rate of up to 20%. The transition of ownership to an investor with a wide experience in the field was aimed at moving forward while maintaining growth rates. Also, the principal goal of Raya, since its establishment, is to contribute to achieving sustainable development and promote crucial fields of businesses”, added Medhat Khalil.
Ahmed Khalil, CEO of Raya Holding added that exiting the recycling industry came as part of Raya Holding’s investment strategy to achieve the highest possible value for its shareholders through the establishment of ventures that Raya can utilize its experience for and maintain its leading position in the market.
Ahmed has also expressed his sincere thanks to BariQ employees, who have contributed in positioning the company on the map of international corporates in the field of recycling.
On his part, Hossam Hussein, CFO of Raya Holding, said that Raya Holding is a direct investment enterprise and has always been entering new fields of business and exiting others, like all investment companies.
“BariQ has achieved the desired growth rate, with which we can exit, paving the way for a new investor to continue the journey of success, given their extended experience in the field.”, added Hussein.
He stressed that BariQ is working to complete all needed procedures for the transfer of shares. He also noted that the nominal value of the company’s stock within the deal is 75.5 EGP per share.
In accordance with Egypt’s vision for 2030, and aiming at implementing the foundations of a circular economy and achieving sustainable development goals, a strategic partnership was announced today in Cairo to open the largest plastic waste sorting facility between BariQ, a subsidiary company of Raya Holding Group for Financial Investments, which was established in 2010 and is considered as the biggest plastic waste recycling company in the Middle East and Africa and the Coca-Cola International Company.
This occurred in the presence of many senior officials of the Ministries of Environment, International Cooperation, Industry, Trade and Finance, and the Food Safety Authority, in addition to representatives of international companies, namely: Unilever, Nestlé, Procter & Gamble and many leaders of international donors.
This collaboration reflects the support for Egypt’s plans and efforts in the field of waste recycling through implementing and operating the sorting facility and the commitment to apply all international standards and specifications in the field of waste recycling in order to preserve the environment and produce eco-friendly materials which shall contribute to reducing harmful emissions, maintaining natural resources and minimizing the environmental impact of plastic waste.
Medhat Khalil, Chairman of Raya Holding for Financial Investments, expressed his pleasure of the collaboration and partnership with Coca-Cola and considered it as the culmination of BariQ’s efforts to present a successful model for the circular economy in Egypt over the past ten years, stating that this partnership will enhance the trust between Coca-Cola and BariQ, which will result in an increase in the recycling rate and the use of BariQ’s products made of recycled plastic, which are suitable to use for food with complete safety, in accordance with the requirements of the Organization For the Egyptian Food Safety Authority and Standardization & Quality.
Commenting on this partnership, Mr. Ahmed Rady, General Manager of Coca-Cola Egypt – Atlantic Industries, confirmed that choosing BariQ as a key partner to achieve the goals of Coca-Cola’s initiative “World Without Waste” in Egypt came as a result of BariQ’s efforts in the pioneering waste recycling sector in the Middle East and Africa. He also called on all the operating companies in Egypt to follow Coca-Cola’s policy towards the community while supporting the Ministry of Environment’s plan to recycle waste, particularly in light of the environmental, social and economic returns that can be achieved.
Rady added: “Coca-Cola considers itself as a strategic partner in all markets and communities in which it operates, and we always work together to support all activities and initiatives that would contribute to reducing the environmental risks. This project is a new step through which we confirm our commitment to society, and it will be followed by more steps so that we can achieve all the goals of Coca-Cola’s initiative “World Without Waste” in Egypt.”
On the other hand, Engineer Usama Zaki, the Chairman and CEO of BariQ, expressed his happiness for entering into this strategic partnership, which will lead to achieving the goals of Coca-Cola in creating a world without waste. This is considered a continuation of BariQ’s efforts to promote the recycling industry in Egypt, the Middle East and Africa. Ten years ago, we succeeded in bringing the recycling industry to Egypt with the latest European technologies, which are compatible with all international requirements, aiming at producing an internationally competitive Egyptian product that can be 100% exported to the European and American markets. The impact of our partnership with Coca-Cola will be reflected in increasing the rates of collecting and recycling of plastic waste in Egypt in order to achieve the goals of Coca-Cola’s initiative “World Without Waste” to collect and recycle every bottle produced and sold by Coca-Cola in the Egyptian market, in addition to the production of new bottles of recycled materials by up to 50% by 2025, and by up to 100% by 2030, which shall achieve the goals of the circular economy and reduce the adverse environmental impacts.
Zaki added that the new sorting facility is based on the latest German technology to automatically separate the plastic waste bottles with high accuracy, which is the first time such technology is exported outside the European Union countries, noting that the facility is able to operate at a rate of up to 10 tons per hour, which is the highest production capacity efficiency in the world.
BariQ, a subsidiary of Raya Holding for Financial investments, has been awarded the Best Waste Recycling Company in the Middle East for 2019 and the ceremony was held at a Gala Dinner by Waste & Recycling to present the MIDDLE EAST WASTE & RECYCLING Awards.
In 2016, BariQ expanded its operations and product portfolio by adding the recycling of HDPE and PP containers into resin suitable for various non-food applications such as paints, outdoor furniture, crates, pallets, pipes and insulation sheets. As part of a commitment to sustain the adopted state-of-the-art and cutting edge green technology, and being up-to-date with the worldwide best practices BariQ successfully added new upgrades to the SSP production line, in collaboration with BariQ’s business partner and top-notch Austrian machinery supplier Star Linger.
The upgrades will increase the pellet particle size, which in turn will improve the final product quality in terms of product color values and the mixing percentage with virgin PET as well as the energy efficiency of the process, providing the most updated products and services. Additionally, an Energy Recovery Kit (ERK) was installed, which recovers some of the heat generated in the process and allows it to be reused in the early production stages, saving energy and money.
As part of BariQ’s strategic objectives for the coming years, BariQ is on its way to complete the set milestones of the implementation of the Lean Supply Chain principles that started in 2016 partnering with one of the leading service providers. This project will enable the elimination of multiple wastes that might occur throughout the value chain and improve the quality of the final product with fewer defects and rework.
Currently, 9 of BariQ team members are lean green belt certified, 2 are black belt and 1 master black. Moreover, 93% of the employees are aware of Lean culture and principles, and trained to identify and eliminate the different types of wastes. As a result, numerous continuous improvement (KAIZEN) projects were accomplished that will have direct impact on the overall work environment, breakdowns and productivity rates.
BariQ is currently engaged in SwitchMed – MEDTEST II program that is funded by the UNIDO (United Nations Industrial Development Organization) that addresses the need to promote cleaner production with sustainable and efficient resource consumption. This initiative is being implemented in 8 countries in the southern Mediterranean, and the implementation is being done in Egypt by ENCPC experts (a division of the Ministry of Trade & Industry).
As a member of the UNIDO project, BariQ will benefit from it to facilitate energy/raw materials improvements mainly through projects in 2-3 focus areas targeting energy conservation such as fuel, water and electricity, in addition to improving raw materials quality and consumption. The project will build knowledge and in-depth technical capacity, with an emphasis on system optimization and ISO energy management in industry. Additionally, BariQ will gain technical assistance through appointed foreign experts in the field for a period of around 3 months with an agreed upon scope of work.
As part of BariQ’s efforts to promote the significance of recycling and raising awareness among school students and universities, BariQ organizes school and university visits. The students learn about the importance of recycling starting from the receiving and sorting phases to the recycling process and the new end product.
BariQ intends to replicate this experience with more schools and universities in the coming period as part of its sustainability program, aiming at building new generations well aware of the importance of recycling, changing their lifestyle to one that is environmentally conscious, and arming them with the knowledge of the environmental challenges that lay ahead.
BariQ is aware of today’s business imperative to play a pivotal role in promoting sustainability development goals (SDG’s). Raya, being an active participant in the UN Global Compact, encourages BariQ to further its commitment to contribute to such goals and be a local SDG pioneer through the continued efforts in fostering innovation and economic growth.
Recycling PET plastics at BariQ uses two-thirds less energy than that required from new (virgin) materials, and for every ton of rPET used greenhouse gas emissions are reduced by over 1.5 tons of CO2. Finally, rPET reduces the amount of energy needed in manufacturing compared to virgin resin, offering a saving in electricity costs.