Project Idea

KATI SIA (Kati) is a Latvian company operating in the retail sales of recycled textiles, clothing, and footwear registered in March 2006. Kati has over 15 years of experience in the textile industry, starting from Specifically, the business recycles old clothes and textiles is a responsible and green way for all sorts of private customers and businesses seeking to dispose of fabric and clothing waste. By now, Kati has established contacts with suppliers and customers and in 2024 saw first successful deliveries to customers worldwide. For example, Kati partners with The Salvation Army, an international movement and part of the universal Christian Church, and with the International Committee of the Red Cross, a humanitarian organization based in Geneva, Switzerland. Currently, the end users of Kati’s recycled products are companies in retail business or fabric production that use recycled textiles as a raw material, they can be located globally. has already discussed the supplies of textile waste with potential customers and currently there are two customers that have signed preliminary long term contracts that guarantee for cash flow and regular loan repayments: a German and Latvian textile business. Kati is not limiting its sales to the EU, already seeking customers in Africa and the Middle East in retail business or fabric production that use recycled textiles as a raw material.

In 2023 more than 100 textile waste sorting containers have been made available all over Latvia to promote the recycling of textile materials in the country, and to encourage the public to dispose of this type of waste. Kati delivers the textiles to the sorting point and re-sort them, after analyzing the composition and quality of the collected textiles, for materials in good condition, looking for the possibility of reuse. Kati collects and sorts textiles throughout Latvia in cooperation with Clean R SIA, the largest waste collection company in Latvia.

In 2023 the company started a new field of textile recycling - a process of repurposing used textiles and clothing to minimize waste and promote sustainability. There are still significant amounts of textiles that can not be sold due to low quality and wear. Such materials can be processed into small shreds and reused again in fabric production, which have higher profit margin. The strategic plan of Kati is to develop further in the direction of textile recycling and expand its textile processing capacities. This requires expanding Kati’s existing equipment facilities and specifically buying twin shaft shredders that shreds textiles into tiny pieces worth EUR 680 000.

Kati's strategic objective is to continue operating in textile recycling and expand its revenue in this sector. The initiative is based on global and local market trends that show profitable business opportunities. Considering the growing interest towards textile recycling, the support from EU authorities and almost missing competition in the Baltic region. The amount of textile waste generated every year in the EU is increasing rapidly. and it is now one of the fastest growing waste streams. These can be recycled and reused if the waste is effectively managed.

Executive summary (Business plan and financial model)

Kati is launching the current funding in order to purchase twin-shaft shredders worth EUR 208.410, 289.025 and 182.565 each or a total of EUR 680,000. Kati has been selecting the shredder very thoroughly and communicated with several suppliers from China, Germany, India. The equipment is already chosen among all available options and the invoice is received.

Kati intends to split the fundraising into several rounds.

Key financials

• The company is seeking a loan with an interest rate of 14% with a repayment term of 12 months
•  As of 2023, Kati had EUR 693 938 in total current assets.
• Kati projects a net profit of EUR 249 449 in 2024 and a profit of EUR 434 454 in 2025.
• In 2021,2022,2023, Kati has been posting losses which are the result of the company’s reinvestment of its capital into machinery, equipment and purchase of materials.
• Kati exhibits a healthy working capital ratio of 1.0 calculated based on its most recent annual financial statements for 2022; 
• Kati has a healthy credit history ranking according to Creditinfo, an independent aggregator of credit history information.

Collateral and guarantees

The loan is backed by a collateral: Kati would provide its existing manufacturing equipment to cover the loan as well as the company’s fixed assets