Repsol enters textile recycling, takes a stake in Coleo

Madrid – The Spanish group Coleo, one of Europe's leading companies specialising in recycling and recovering textile waste, has welcomed the Spanish multinational energy company Repsol as a new investment partner. Through its social entity, Fundación Repsol, the company has now formalised its investment in one of the main subsidiaries of the Barcelona-based group, which is dedicated to recycling and promoting circularity within the textile industry.

Both entities announced in a joint statement that, through its corporate social entity Fundación Repsol, the energy company has taken a 14 percent stake in the share capital of Coleo Network. Coleo Network is one of the main subsidiaries of the Spanish group Coleo, encompassing its recycling division. The company is working to build a European network for the management and recovery of textile waste. For these processes, Coleo uses its own patented technology. This technology, combined with the latest industrial process innovations aimed at adding value to used garments and developing circular solutions, allows the Spanish company to recover textile waste. Coleo claims this process converts waste into the raw material for a viable, circular economic model.

The operation represents “a clear commitment by the Foundation to the new ‘triple impact’ economy and its link with society,” stated Antonio Brufau, chairman of Repsol, in remarks shared by the energy multinational on Tuesday, November 18, to mark the signing of the acquisition agreement. This move leads the energy company to enter and contribute to “developing a growing business with enormous economic, social, and environmental potential” within “a strategic area such as textile recycling.”

“Having Fundación Repsol as a partner represents key support for Coleo,” added David Puyuelo, founding partner and chief executive officer of the group specialising in textile recycling. Puyuelo stressed that this is especially true “in terms of developing our vision of European textile circularity based on a balance between industrialisation, technological development and social impact.”

To boost its operations and the construction of new plants

Coleo's current operational and business model is based on its three waste management plants in Europe: two in Spain (Galicia and Catalonia) and one in France (Toulouse). These facilities are set to be scaled up following Fundación Repsol's investment in Coleo Network. Coleo Network is one of the main companies in the Coleo Group, which also includes COL&BRI Partners, Coleo Fibers, Coleo Recycling, Coleo Recycling BCN, Coleo Textil and Wastex Techonologies.

As a new investment partner, Fundación Repsol's investment in Coleo Network will boost the growth of Coleo's operations across Europe, both entities have announced. Following the energy company's investment, there are also plans to open new Coleo plants for waste management and material recovery.

With this acquisition of 14 percent of Coleo Network, Fundación Repsol increases the number of companies in which it holds a stake from four to five. This is part of its commitment to contributing to a “sustainable and inclusive energy transition.” To this end, besides Coleo, Fundación Repsol, through its investee company Repsol Impacto Social, holds stakes in: Grupo Sylvestris, a company offering emission offsetting solutions through reforestation projects; Hispaled, a Spanish company providing LED lighting solutions; Koiki, a sustainable last-mile logistics company; and GNE Finance, which focuses on promoting “eco-sustainable” urban regeneration projects in vulnerable areas. From these sectors, it is now entering the textile recycling industry.

Strategic sector

Echoing the “strategic” nature with which Brufau himself described the sector, Coleo and Fundación Repsol jointly highlight the strategic value of the textile industry for both Spain and Europe. Its importance will grow as new regulatory initiatives and industry dynamics continue to develop. This is a significant point, and Europe is proactively developing more legislative measures in response. These measures will be necessary to address pressures, such as those from Chinese companies, which will force Europe to recover a greater quantity of unsold textile waste that cannot be sold in foreign markets.

“Currently, more than seven million tonnes of textile waste are generated in Europe each year,” state Coleo and Fundación Repsol. “Of this volume, approximately 10 percent is recycled and between 20 and 25 percent is reused or exported, mainly to developing countries, while the rest, ranging from 65 to 75 percent, goes to landfills or incineration facilities.” They add that the situation is complicated by the fact that “the export market for second-hand garments faces significant saturation due to competition from Chinese companies offering products at lower prices. This situation hinders the export of that 20-25 percent, which increases the amount of European textile waste requiring additional treatment.”

This is a particular challenge on top of those already facing the sector as it “transitions to more sustainable production,” with Europe, “with Spain at the forefront,” leading “this transformation.” This paradigm shift, however, will require a “long-term” vision, they add, and “sectoral and social collaboration and cooperation,” precisely “like the one signed by Fundación Repsol with Coleo” through this acquisition.