Contec S.A. raises EUR 10 million from investor
Contec S.A., a startup recovering industrial raw materials from used tires, has raised EUR 10 million in their latest funding round. These funds will be used to expand the efficiency of Contec’s plant (Szczecin, Poland) almost threefold. Two investors are providing the funds: HiTech ASI, the corporate venture capital fund of Bank Gospodarstwa Krajowego, and the Warsaw Equity Group, which is the majority shareholder.
Contec S.A. invests in increasing processing capacity
The lead investor of the round is HiTech ASI, managed by VINCI – a subsidiary of Bank Gospodarstwa Krajowego. The second investor is Contec’s major shareholder, the Warsaw Equity Group. The funds obtained (EUR 8 million – HiTech ASI and EUR 2 million – Warsaw Equity Group) will be used to increase the processing capacity of Contec’s Szczecin plant. Once completed, the plant will be able to nominally process 33,000 tons of used tires per year – three times more than today. In addition, the modernization will increase the production capacity of post-pyrolysis oil and recovered carbon black.
The expansion of the Szczecin plant is due in the first half of 2024. In addition, Contec is currently searching for optimal locations for the construction of further plants in Europe.
Contec S.A. significantly reduces the carbon footprint thanks to proprietary technology
Contec recovers industrial materials from used tires using their unique protected technology, Molten, a proprietary pyrolysis. Molten, a mixture of liquid salts to heat up the reactor in which the pyrolysis process takes place, is a unique solution capable of expansion on a global scale.
The development of this solution lasted five years, and the company engaged in research work with Warsaw University of Technology, among others. Contec is the first manufacturer in the world to use molten salts in pyrolysis. This is because the technology allows the process continuity under optimal conditions, making pyrolysis a safer, more efficient, and an economical process.
Contec recycles used tires to source recovered carbon black (RCB), post-pyrolysis oil, and steel. Contec products reduce the carbon footprint more than five times, when comparing them to the conventional fossil fuel-based raw materials
Contec is an active participant in the circular economy. Every year, over a billion used tires in the world are recycled in the European Union. That alone is over 3 million tons of waste.
Unfortunately, nearly two-thirds of used tires are – often illegally – burned or buried. Contec‘s unique technology, however, giving used tires a new life in a resourceful, effective, and safe way, turning them into raw materials that can be used in the production of new tires and other rubber products.
The acquisition of financing is an important step in the company’s development. The interest in our products significantly exceeds the current production capacity, and the acquired capital will allow us to expand production and respond more efficiently to the reported demand.
“For many years, we have been supporting the manufacturing sector’s climate actions towards closing the loop and circularity. The implementation of sustainable solutions that reduce a company’s environmental impact is an important pillar in the status of a modern and competitive company, following implementation of the goals described in ESG strategies worldwide. We, as Contec, are a partner enabling the decarbonisation of supply chains and the use of sustainable raw materials, especially in the plastics and rubber industry”, says Krzysztof Wróblewski, CEO of Contec S.A.
“The mission of HiTech ASI is to support Poland’s sustainable socio-economic development by building the value of project companies at various levels of their development and strengthening the innovativeness of the Polish economy, increasing its competitiveness on the international arena. Involvement in Contec S.A. is the implementation of the HiTech’s mission. It will have a positive impact on the development of the circular economy and increase the specialist competence of the Polish company “, says Piotr Woliński, CEO of VINCI.
The new investor confirms that 2023 is a breakthrough year for Contec. Already in January this year, thanks to the support of the Warsaw Equity Group, the company has completed the installation of the back end in its technological process. As a result, sales of the recovered carbon black to customers began.
“Contec is a venture building project of the Warsaw Equity Group, which has been implemented since 2015. After a period of intensive R&D, which resulted in stable and scalable technology, the company enters the intensive commercialization phase. Therefore, Contec’ needs funds and partners to increase its production capacity and, consequently, be able to respond to the demand reported by companies from the chemical and rubber sectors. I am glad that Contec has acquired such a partner as BGK. Thanks to this cooperation, our portfolio company will be able to strengthen its position on the European market”, comments Przemek Danowski, Managing Partner at Warsaw Equity Group.
About Contec S.A.
Contec S.A. specializes in the processing of car tires. From them, it produces full-value raw materials reused in industry. It is the only company in the world that uses molten salt as a heat carrier. Molten’s proprietary technology creates the conditions for a safer, more efficient and more economical method of production, designed with repeatable quality in mind. Since 2017, the company has been refining and optimizing this technology to produce an alternative to soot and petrochemical raw materials.
ABOUT VINCI S.A.
VINCI S.A. is a subsidiary of Bank Gospodarstwa Krajowego. The subject of its activity is the management of alternative investment companies, providing appropriate solutions in the field of financing Polish entrepreneurs. Currently, VINCI manages two venture capital funds: HiTech ASI, which provides capital to technology companies at various stages of development, and IQ ASI, which invests at early stages of development in research and science projects.
About Warsaw Equity Group
Warsaw Equity Group is a leading private investment company that invests and supports projects in innovative solutions aimed at automating processes and improving the efficiency of enterprises, as well as in sustainable development. It has been operating on the market for over 20 years.
Linear Economy VS Circular Economy: What Are The Key Differences And How To Make The Change
Learn how to transition from a linear economy to a circular economy and the important differences between them in this article.
The concept of circularity is not a new one, but in recent years it has received a lot of attention across the world, inspiring environmentalists, governments, and businesses alike. To better understand the circular economy and how to transition to this sustainable economic model, it’s essential to recognise what makes it different from the current industrial linear model.
This article presents the key definitions and clear comparison between the linear economy and the circular economic models and will discuss how to make the transition.
What is the linear economy?
The linear economy is based on a traditional linear business model and follows a “take-make-waste” scheme.
Resources are taken from their source and transformed into products manufactured for consumption. The residuals of this consumption later accumulate in a landfill or are incinerated.
The way a linear economy deals with raw materials puts pressure on scarce resources and has little concern for environmental impact. Businesses produce and sell as many products as possible with profit as their only goal, leaving many economic opportunities untapped.
What is the circular economy?
The circular economy stops waste from being produced from the start, designing products that can be reused as intensively as possible. It’s a different approach. It aims to reduce the use of raw materials and instead reuse materials reclaimed from end-of-life products.
The circular business model focuses on extending the life cycle of products while maintaining or improving their value. It replaces the traditional concept of end-of-life with the idea of restoration and circularity, closing the loop in the industrial ecosystem.
What are the key differences between the linear and circular economy?
The main differences between the linear and circular economy are their general approach, their vision of how value is created or maintained, the perspective they have when working on sustainability, and the adopted business model.
The fundamental difference between these two economic models is that while the linear economy follows the “take-make-waste” step plan, the circular economy follows the 3R approach of “reduce, reuse, and recycle”, completely removing waste from the equation.
The circular and the linear system differ from each other regarding how value is created or maintained. The traditional linear model has short-term revenue in mind and only focuses on profitability, creating value through mass production and sales.
The circular approach, on the other hand, has a long-term vision that also considers sustainability throughout a product’s life cycle. Through the update, repair, and regeneration of products, longer life cycles can be achieved.
3. Sustainability perspective
When considering sustainability, the linear economy works towards eco-efficiency, trying to achieve the same result while reducing the environmental impact generated. This doesn’t enable circularity and it only delays the linear flow of resources from production to waste by reprocessing materials into a product with less value (downcycling).
Alternatively, the circular economy attempts to increase the eco-effectiveness of products. The environmental damage here is completely eliminated and even a positive impact is possible. It abolishes the idea of waste and converts materials into something of greater value than they originally had (upcycling).
4. Business model
The current linear economic model focuses on products, which are produced, used, and then thrown away as waste.
The circular model focuses on services instead, offering a single service that can be used by many instead of the same product replicated for multiple individuals.
Transitioning from a linear to a circular economy
Given the planet’s limited resources, the environmental impacts of the traditional linear economy business model are concerning. Government, companies, and consumers each have a crucial role to play when transitioning from a linear to a circular model of production and consumption.
The shift to circularity goes beyond recycling and reusing materials. It requires a meticulous evaluation of the impact products and their components have in every step of their lifecycle. It needs actions and policies in place to succeed.
There are many ways to incorporate circular practices into a company. Collaboration between businesses and stakeholders across the value chain and a consumer mindset change is essential.
The United Nations Environment Programme (UNEP) explores some key drivers that businesses may consider when transitioning to more circular business models:
1. Entering new markets
The demand for green products and services is growing and the markets for low-emissions offerings are expected to expand further. The transition from a linear economy to a circular model can make companies enter these new markets and increase their market share.
They can also maximise the value of a product by keeping it in the circular loop, extending its life cycle through reuse, refurbishment, or remanufacturing. The increasing demand for net-zero products is creating unprecedented opportunities for businesses and countries to implement a circular model.
2. Attracting and retaining talent
A purpose-driven company has higher productivity and growth rates, along with a more satisfied workforce with lower employee turnover.
A strong commitment to a circular model helps companies attract and retain the best talent. This is especially true among the younger generation that has strong environmental concerns and is eager to get involved and be an active part of the solution.
3. Reducing risk and future-proofing the business
The circular economy seeks to create industrial systems that are restorative or regenerative by intention and design.By shifting from a linear economy to a circular one, companies can reduce their dependence on suppliers and lessen their corporate risks minimising the use of virgin materials and incorporating alternative materials taken from existing products.
Using more sustainable materials — such as refurbished, renewable or recycled materials — can improve the supply chain resilience and help businesses manage future demand for circular products and meet their customers’ needs.
4. Triggering innovation
When shifting towards a circular economy, companies will need to reevaluate the way they think about products, technologies, processes, and business models. Innovation is a key driver in this transition away from the wasteful linear economy system.
Circularity, then, serves as a “rethinking device”, triggering creative new solutions and boosting innovation rates so that businesses can satisfy key societal and market needs.
Bringing circularity to the tire industry
At Contec, we believe that the circular economy has a pivotal position to play in the tire industry. Our mission is to be a driving force, transforming the industry towards carbon neutrality. Currently, we’re contributing to circular principles in two major areas:
- Circular product creation — Our circular products are replacing petroleum-derived products with high-quality and low-carbon solutions.
- Contec process — We’re continuously optimising our pyrolysis process to be more sustainable and resourceful. Our Szczecin plant runs on 100% renewable energy, generated from our pyrolysis process.
Overall, it’s our vision to close the loop in tire production by enabling a tire-to-tire model and supporting manufacturers with circular solutions in the plastics industry. Get in touch to learn more about our sustainable solutions.
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5 facts about SDGs
In our ongoing series “Five Points”, we’d like to explore the UN’s Sustainable Development Goals or SDGs. In this article, we discuss the SDGs, how they relate to tire waste, and their relationship with Contec. Let’s get started!
1. The SDGs come from MDGs (Millennium Development Goals)
The SDGs have their roots in the Millennium Development Goals (MDGs), which were adopted by the UN in 2000 and expired in 2015. The MDGs were widely praised for their role in raising awareness about global development challenges and for inspiring climate action at the local, national, and international levels.
Despite some progress in achieving the MDGs, there was widespread recognition that more needed to be done to address global poverty, inequality, and environmental degradation. This led to the development and adoption of the SDGs in 2015, which built upon the successes of the MDGs and aims to continue the momentum toward a more sustainable future for all.
2. The SDGs aren’t only dedicated to developed countries.
The SDGs apply to all countries, regardless of their level of development. This means that both developed and developing countries are responsible for working towards achieving the goals.
While some of the SDGs are more relevant to developing countries, such as ending poverty and hunger, providing clean water and sanitation, and promoting inclusive and sustainable economic growth, others are relevant to developed countries as well.
For example, developed countries also need to work towards achieving gender equality, reducing their carbon footprints, promoting sustainable consumption and production patterns, and providing quality education.
3. Tire manufacturing can contribute to achieving the Sustainable Development Goals
There are several ways in which tire manufacturing can help to achieve SDG objectives. Companies can play a crucial role in promoting sustainable development by reducing their environmental footprints, supporting local communities, and promoting responsible consumption and production practices.
By taking action to achieve the SDGs, tire manufacturers can not only contribute to a more sustainable future but also enhance their reputation and competitiveness in the global marketplace.
4. Waste tires can be linked to several SDGs
There are 5 SDGs that the tire industry should be aware of.
SDG 12: Waste tires are a major environmental problem and can contribute to land pollution and greenhouse gas emissions if not managed properly. By promoting the recycling and reuse of waste tires, and reducing their environmental footprint, we can move towards more responsible consumption and production practices.
SDG 3: Waste tires can provide a breeding ground for mosquitoes and other pests, which can carry diseases and harm human health. By promoting the proper management of waste tires, we can help to improve public health and well-being.
SDG 6: Waste tires can interfere with the flow of water, leading to flooding and water pollution. By properly disposing of waste tires and promoting sustainable waste management practices, we can help to protect water resources and improve water and sanitation services.
SDG 9: The recycling and reuse of waste tires can provide opportunities for innovation and job creation, helping to build more resilient and sustainable industries and infrastructure.
SDG 13: By reducing the emissions associated with the production and disposal of waste tires, and promoting the use of sustainable transportation systems, we can help to address the challenges posed by climate change and build a more sustainable future.
5. At Contec, we enable manufacturing companies to achieve seven of the SDG objectives:
- SDG 3 – Good health and well-being
- SDG 6 – Clean water and sanitation
- SDG 7 – Affordable and clean energy
- SDG 9 – Industry, innovation, and infrastructure
- SDG 12 – Responsible consumption and production
- SDG 13 – Climate action
- SDG 15 – Life on land
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