A market-leading North East recycling business is scaling up its operating capacity and turnover targets with the help of a six-figure investment from the North East Growth Capital Fund Loan Fund Supported By The European Regional Development Fund
Gap Ice runs the UK’s most modern refrigerator recycling plant at its Felling headquarters and already processes more than 10,000 appliances every week, with almost every single component being removed for reuse.
After working with regional fund management firm NEL Fund Managers to secure the £250,000 investment via the Coronavirus Business Interruption Loan Scheme, Gap Ice is now expanding its site facilities to cover more than five acres in total and to start to grow its processing smaller domestic appliances.
Up to 20 new jobs will be created as the business grows, taking its total workforce past one hundred people, while the management team is aiming to increase its turnover from £8m to around £14m.
Gap Ice was referred to NEL Fund Managers by James Clinghan of advisors TBP – Trusted Business Partner.
The business is part of the Gap Group, which was founded in 2005 and encompasses further food waste management, haulage and electrical waste recycling businesses.
Its aim is to get as close as possible to a ‘zero landfill’ approach for all its recycling operations and it is also currently investigating options for implementing a pollution-free waste-to-heat system.
Gap Ice, which holds the industry-leading WEELABEX certification for treatment of cooling appliances, currently takes fridges from retailers across the North East and North Yorkshire, as well as in southern Ireland, and recycles both their physical components and the gases that make them work.
Mark Curry, finance director at the Gap Group, says: “Managing the whole life of appliances like refrigerators is an increasing priority for both manufacturers and retailers alike, and being able to offer them an almost ‘zero landfill’ solution to their needs makes our offering extremely attractive to them.
“Taking on this extra space and capacity will enable us to accelerate our growth plans and give us the room to grow that we know we’re going to need in the coming years.
“We know there are many more opportunities out there for us to grow the business, both by building on what we currently offer and introducing new procedures and services that will fill emerging gaps in the recycling market.
“We’ve made lots of improvements to our business and operational procedures over the last 18 months and wanted to identify an investment option that would enable us to make the most of them.
“Working with the NEL team was a smooth and straightforward experience and the introduction that James made to them proved to be a very valuable one indeed.”
David Thomas, investment director at NEL Fund Managers, adds: “Gap Ice has already demonstrated its leadership in this fast-developing part of the recycling market and its ambition to do even more will benefit both the business’s performance and the environment that surrounds us all.
“Investments which bring with them these sorts of environmental benefits are a priority for the North East Fund and we’re very pleased to be working with such a far-sighted firm.”
James Clinghan, partner at TBP – Trusted Business Partner in Newcastle, says: “I am delighted to have been able to build a diverse, ABL-backed funding package to support the team at GAP Group.
“We brought in Leumi ABL and worked in conjunction with NEL on this project. Both have worked tirelessly to help us build a long-term funding package that will underpin the businesses aspirations for the next few years.
“The project was not without its complications but the highly skilled deal team we had working on the project helped us get over some complex hurdles and I cannot thank those people enough.
“The Gap Group team has been a pleasure to work with and we hope to continue to support them over the next few years.”
The North East Growth Capital Fund has been designed to create around 790 jobs in more than 70 regional firms over the life of the programme and offers unsecured investments of up to £500,000 to established businesses looking to realise their growth potential.
The overarching £120m North East Fund will provide financial support for more than 600 businesses, creating around 3,500 jobs and delivering a legacy of up to £80m for further investment into the region.
For more information about NEL’s investment criteria, visit www.nel.co.uk or contact the investment team on 0345 369 7007.