AB Grigeo, a leading paper and wood industry conglomerate in the Baltic States, has inked a provisional agreement to acquire shares of a factory owned by Głuchołaskie Zakłady Papiernicze sp. z o.o (GZP), a noted tissue paper and cardboard producer in Poland.
The company's roadmap involves obtaining a full 100% stake in the GZP subsidiary that oversees the tissue paper operations in Niedomice, Poland. This transaction, set to utilize AB Grigeo's internal financial resources for the acquisition, is expected to be finalized in the upcoming six months, adhering to stipulated agreement conditions.
Tomas Jozonis, AB Grigeo's CEO, expressed that this foray into Poland aligns strategically with their objective to cement their footprint in the tissue paper market across Central and Eastern Europe (CEE). This move not only diversifies their product offerings but also capitalizes on a burgeoning market, facilitating extensive distribution avenues in countries such as Germany, Czech Republic, Slovakia, Ukraine, and other regional players. “By harnessing Grigiškės' production facility's best practices at the new plant, we anticipate substantial logistics cost savings and a fortified competitive edge,” Jozonis added.
This debut acquisition in Poland introduces AB Grigeo to a tissue paper production hub in Niedomice, situated roughly 90 km eastward from Krakow. The facility currently employs a workforce of 175, operating specialized paper machines and converting lines. With an expansive production ecosystem sprawled across 8 hectares, future plans encompass production innovations and output volume amplification.
GZP's Niedomice division registered a 2022 turnover of EUR 40 million (unaudited data) and an EBITDA standing at EUR 3.8 million. The enterprise's estimated value is pegged at EUR 22 million.
AB Grigeo's conglomerate, comprising fiberboard, cardboard, and tissue paper production entities, enlists companies like AB Grigeo, UAB Grigeo Packaging, UAB Grigeo Baltwood, AB Grigeo Klaipėda, AT Mena Pak, UAB Grigeo Recycling, SIA Grigeo Recycling, and UAB Grigeo investicijų valdymas. Employing around 850 individuals, the group's 2022 turnover surged to EUR 203.2 million, marking a significant growth from 2021. However, the 2022 EBITDA witnessed a 9.7% dip from the previous year, settling at EUR 21.4 million, with the net profit also experiencing a 14.5% decline, amounting to EUR 10.6 million.
This move by AB Grigeo underscores the significance of strategic business partner searches and expansion in the Central and Eastern Europe (CEE) landscape, emphasizing the continuous growth and the potential of finding the right distribution partners in the region.