(Bloomberg) -- Eren Holding AS, a Turkish conglomerate with interests in luxury clothing and manufacturing, is on a $2 billion investment spree to boost its cement and cardboard production capacity.

The Istanbul-based group, which is the distributor for international clothing brands including Lacoste, Burberry and Converse, is investing €650 million ($711 million) in a new cardboard factory in the Turkish Black Sea port city of Zonguldak, group chairman Ahmet Eren said in an interview in Istanbul.

The plant will increase capacity to more than 2 million tons a year from the current 1.3 million tons, he said.

Eren is also spending €1 billion to buy and convert a UPM-Kymmene Oyj facility in Shotton, in the UK, to make corrugated cardboard, he said, adding that both projects are expected to be complete by the end of 2024.

In cement, the group plans to double its production capacity in Turkey to 7 million tons a year from 2024, he added.

Financing

To help fund the expansion plans, Eren subsidiary Modern Karton signed a €350 million green loan with ING Groep NV’s Turkey unit and Germany’s DZ Bank AG on Wednesday. The 12-year loan includes a two-year grace period.

Modern Karton will also borrow €70 million from Turkey’s top state lender TC Ziraat Bankasi AS for the new factory’s working capital, according to the agreement. Chinese credit export insurance firm SinoSure will back the loan with insurance while China’s Harbin Electric Co Ltd will build the plant.

Eren Holding plans to borrow from local lenders “soon” for the cement expansion, Eren said. 

He forecast the group’s revenue would rise to over $3.5 billion this year from around $2.5 billion in 2022.

A 2020 plan to take on a strategic investor in Modern Karton, on which Morgan Stanley worked as Eren’s financial adviser, failed after long negotiations, Eren said.

“We’re now happy that it didn’t go through. We have a well-established plan for organic growth at Modern Karton now.”

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