One of the cornerstones of our investment process is meeting
investee companies face to face. This helps us build a comprehensive picture of
the business, as well as its markets and future strategy. It also allows us to
share our insights and offer our sustainability expertise.
With that in mind, we recently visited several firms in Türkiye, meeting management teams and seeking to understand how their businesses facilitate the climate transition. One standout company was West East Soda, a leader in the industrial space.
Digging deeper
West East Soda’s operations are aligned with SDG 12 - Ensure sustainable consumption and production patterns and the Circular Economy pillar in abrdn’s SDG Framework.
The company produces over five million tonnes of soda ash and sodium bicarbonate annually. Soda ash is made by dissolving the mineral trona in hot water, which is then separated and crystallised. It plays a key role in glass, solar panels, lithium batteries and more. There are only a handful of trona sites globally, and West East Soda has the only two in Europe.
Natural soda ash is cheaper to manufacture than its synthetic alternative. It also has a 60% lower carbon emissions and 80% lower water intensity. West East Soda uses an innovative solution-extraction process that injects hot water through ground-level wells. Such a method avoids the labour risks associated with underground mining. It’s also a circular operation: WE Soda re-uses, repurposes and recycles byproducts where possible. This eliminates waste, improves efficiencies, and bolsters its sustainability profile.
Where next?
We left the meeting upbeat about West East Soda’s long-term trajectory. Its operations were impressive, with cutting-edge facilities and a capable management team. True, the soda ash market is hard to predict, and new supply will determine prices. West East Soda, however, is the leading player in Europe and has the flexibility to weather price volatility.
Final thoughts…
West East Soda is a great example of a company where financial returns and sustainability are intrinsically linked. It aims to continue reducing its carbon emissions and water use, improving profit margins and minimising its environmental footprint. This is the type of company we believe is vital as we transition to a net zero world.
You can read more about our EM SDG Corporate Bond and Climate Transition Bond portfolios here.
Companies are selected for illustrative purposes only to demonstrate the investment management style described herein and not as an investment recommendation or indication of future performance. Past performance is not a guide to future results.