Courtesy of EBI

EBI Cleans up in Costa Rica

“Waste management is more than just a noisy truck rumbling past every two weeks to make your garbage disappear.”– Claude Joly, CFO of Empresas Berthier EBI de Costa Rica, S.A. (EBI CR).

Mr. Joly is right. We Canadians don’t often think beyond the truck. We tend to drag our garbage bags to the end of the driveway, slap our hands together, head back inside with a sense of accomplishment (especially if our accomplishments include some recycling), and count on the noisy truck to rumble past and do the rest.

But in other parts of the world, waste is a more complex problem, in countries like Costa Rica for example.

“When we went into Costa Rica in 1997 we saw that although there were environmental regulations in place to control waste, the infrastructure for properly handling that waste wasn’t in place yet,” says Joly.

EBI CR is the foreign affiliate of Québec’s EBI Environment Inc., a family-owned and operated company that runs a number of innovative and green waste management facilities in Québec.

“From the beginning of EBI we’ve designed and managed our sites according to Québec’s very strict environmental standards, and our goal was to bring those high standards to Costa Rica.”

It’s a fine example of the global market place working at its best; one country’s environmental expertise fulfilling a strong need that exists in another.

EBI’s international catalyst

EBI’s operations in Canada were always very strong, but like most successful companies, they always kept an eye out for growth opportunities. In 1995 one such opportunity presented itself when they were invited by the Québec government to attend a trade mission to Central and South America.

Courtesy of EBI

Courtesy of EBI

EBI visited a number of countries but in the end, Costa Rica stood out as the best fit for EBI’s first (and by no means its last) international endeavour.

“The conditions just seemed right. Environmental regulations were just starting to come in, but the disposal infrastructure wasn’t there yet. It was like Québec in the 1970s with the introduction of the Regulation respecting solid waste,” says Joly.

So EBI took the international plunge, and have since put in the necessary time and effort to grow that endeavour. Today, EBI CR is an industry leader in Costa Rica and continues to expand.

But success didn’t come overnight (waste management is more than just the truck, remember?). There were obstacles to overcome: fierce competition from companies in the same sector, resistance from municipalities wanting cheaper alternatives and delays in getting government permits.

One of the largest obstacles for EBI CR was getting financing for the purchase and development of land for their facilities. Costa Rican banks were hesitant in providing financing because they didn’t see the business value of EBI CR’s waste management sites. Similarly, Canadian banks were uncomfortable using EBI’s foreign assets as security.

EBI had to consider leveraging its assets in Canada to fuel their international operations, but this approach would have locked up working capital that they needed to continue growth at home.

Export Development Canada (EDC) was able to fill this challenging market gap; instead of using EBI’s Canadian assets as security, it recognized the value of EBI’s foreign assets and used these as security for financing.

“We visited EBI’s facilities in Canada and witnessed the quality and efficiency of their operations; we immediately understood their potential for growth in the Costa Rican market and wanted to help however we could,” says Martine Trudel, EDC’s Senior Account Manager for EBI.

Since 2009 EDC has provided EBI with five loans totaling USD 16.5M. In addition to financing, EDC provided EBI CR’s Costa Rican bank with a performance security guarantee (PSG) in 2013. The PSG, which replaces the collateral that EBI CR’s Costa Rican bank would have required to provide letters of guarantee for local contracts, has given the company the flexibility to pursue new contracts without worrying about tying up their own cash reserves.

“We do everything we can to help Canadian companies grow abroad, and it’s especially rewarding when they make a difference, like EBI has in Costa Rica,” adds Trudel.

Categories Infrastructure & Construction

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