CBI Confederation of British Industry : Astoria Organics: EU case study

South East England has a food waste challenge - 8m tonnes of organic waste heads to landfill every year - and Astoria Group is working to fix that. We build and run industrial composting facilities, using sustainable, ultra-efficient technology. Our headquarters are in Walldorf, Germany but we bring foreign direct investment into the UK to build local infrastructure.

Using world-class technology, we aim to provide a solution to this waste crisis by building a commercially viable infrastructure. We want to build facilities that function independent of subsidies or grants, which provide the UK with the capacity to capture organic waste and reduce dependence on landfill. We also aim to provide UK farmers with quality compost as a result.

As an international business, Astoria has to make choices on which countries to invest in. The UK competes with other countries for investment. We take into account commercial parameters, economic certainty, regulatory certainty, similarity to European regulations and environmental laws.

We raise funds in Germany and currently invest in 3 different geographies: Canada, Australia and the UK. Each fund and investment competes to provide an opportunity that best suits Astoria's objectives.

The UK is effectively the EU without the Euro, and this advantage clearly translates into a safe investment destination. The UK also provides investment proximity to our retail investors, with the ability to access the UK offices, which is reassuring.

We also invest in Canada and Australia. Both countries have excellent markets, demographics and the need for the infrastructure we can provide. In comparison to Astoria's other investments, the UK's proximity to Europe is advantageous, and having largely the same regulatory environment as the EU allows for easy transition of technology.

All uncertainty in regards to its relationship with the EU disadvantages the UK as an investment destination for our business, as it competes for funding against our locations in Australia and Canada. The current situation in the British-EU relationship magnifies the uncertainty for European investors considering the UK as an investment decision.

Any uncertainty in the UK reflects on its ranking against other investment opportunities for Astoria. Uncertainty on what Brexit would mean for the UK, for the investments into the UK, and for its relationship with other EU countries is damaging. No one has articulated what an exit would look like.

Further, the impact of an exit would be felt most strongly by smaller investments such as ours, where the stakes are much higher. It is possible that larger firms might be buffered because they are more able to diversify.

The key concern remains uncertainty. Our ability to plan our next investment in the UK will be determined by our ability to anticipate and prepare for the changes an EU exit would bring. There is too much rhetoric and not enough facts or certainty for investors trying to understand the key issues on the table.

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