Landfill, or gold mine? Tomáš and Petr Loudovi have discovered a way to recycle even the most polluted plastic waste into oil substitutes. And it attracted investors from Prime Fund and SFG Holding, who acquired fifty-four percent of ETW's sister company for tens of millions of crowns.

“Only 30 percent of the plastic that is sorted is used for further production. Recycling PET bottles, for example, is not a problem. However, we focused on the most diverse and highly polluted waste polyethylene, which ends up ninety percent in landfills or incinerators on a global scale,” explains Tomáš Louda from the company, whose value is now hundreds of millions of crowns.

He and his brother Peter came up with a way to save tons of waste from municipal, industrial or agricultural sectors from being thrown away. They produce a new material from it: plastic regranulate, which can be used mainly for stretch films for the packaging industry, but also for the production of water tanks, pipes or plastic bags.

Today, the customers of the Nelahozev company include, for example, the food company Orkla, under which the brands Vitana, Hamé and Otma belong. ETW helps them with the recycling of all waste film, whether it is packaging from spices, waste from logistics or from raw materials.

For the German e-shop Zalando, in turn, they recycle envelopes with bubble wrap, in which the clothing store sends goods to customers. “The market in which we operate is huge and so far unoccupied, at least with regard to the use of post-consumer materials as substitutes for the petroleum component in plastic packaging. In Europe alone, about 20 million tons of waste polyethylene need to be processed annually,” Louda calculates.

In the past, he worked for logistics and food companies that used huge amounts of packaging film. When China stopped recycling plastic globally, these companies had nowhere to put their waste packaging. That was the initial impulse for Louda.

Together with his brother, they threw themselves into intensive research and development, and after more than four years they launched a pilot line that can clean a mixture of different types of plastics and make them regranulate. “We use the principles of the circular economy and close the material circle. Thanks to high-quality cleaning, they can even be used as secondary food packaging, which must meet strict requirements for cleanliness,” says Louda.

The unique technology has been developed by the company itself from A to Z. Thanks to this, it can easily adapt it for different applications.

“ETW can recycle what only a handful of companies in the world do. Their technology has a huge range of uses, due to which a variety of additional verticals can be created. In addition, it is a business with a positive overlap,” explains Jan Svoboda from Prime Fund, where he was intrigued by the non-Lahozev firm.

Last year, it started using its pilot line commercially and climbed to an annual turnover of tens of millions of crowns. It expects an increase of at least one hundred percent for 2023, and the new investment should help the company increase turnover many times over the coming years.

“This is a huge step forward for us, which we have been working on for the last year and a half. This will mainly allow us to increase production, because demand currently significantly exceeds our capacities,” says Tomáš Louda.

ETW received the first angel investment from the American fund Trumont Group in the amount of 500 thousand euros. Later Michal Dědek also invested in the startup with his SFG Holding. In total, the company received about 2.5 million euros (in the amount of over 60 million crowns).

The latest investment, worth more than tens of millions, is covered by Jan Svoboda and Dusan Moskaliev of Prime Fund, who together with Michal Dědek acquired the majority of ETW. The American fund Trumont Group continues to be held by sixteen percent and thirty are owned by the firm's founders.

“Within about three years, ETW should reach a turnover of over 1 billion crowns. Thanks to the first part of our investment, they can build several new lines and increase their number to twelve in the following years, each of which can generate a turnover of around five to six million euros (approximately CZK 144 million, n.d.)”, explains Svoboda.

“Our investment is more than active. The guys at ETW can continue to specialize in product and business. We will be in charge of the financial part and help them arrange rapid growth,” Moskaliev adds.

The Prime Fund has two legs: the private investment fund Prime Fund Lab, which facilitates start-up projects, and the Prime Fund Sicav, a qualified investor fund, which helps grow already on the bandwagon. The latter is also intended to support ETW through growth capital.

“The development of the company is also financed by banks, which are very inclined to green projects due to pressure on ESG,” Moskaliev points out. The sibling company is also playing cards by the European legislation, which introduces the mandatory addition of recycled material to newly manufactured plastic packaging — it will apply to all packaging from 2030. In Europe, landfill bans will begin to apply.

Companies are also pushing customers to recycle. The younger generation is particularly interested in the extent to which brands behave sustainably. “There will be a huge demand for recyclables in the market. For us, the challenge now is to occupy as much of it as possible in the next seven years,” reveals Tomáš Louda's plans.

ETW currently has clients mainly from the petrochemical and packaging industries, but expects interest in other fields in the future. With current customers alone, the Loud brothers are already talking about future multibillion-dollar contracts.

“The topic of recycling is gaining importance, and with that, of course, our competition is growing. But we have a significant technological edge that we can use,” says Tomas Louda and believes that the Czech company can become the strongest industry player in Europe at least.

‍