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A load of rubbish
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'Where there's muck, there's brass' couldn't be more apt for the burgeoning multi-billion-pound recycling industry. We look at how hauliers in this area seem to be surviving the recession.
Nords: Lindsay Clark
WHILE OTHER SECTORS of the economy seem to have struggled since the end of 2007, the recycling and waste management industry has continued to grow thanks to a better public acceptance and despite the fact that legislation continues to increase.
By way of an example. in the past two months alone, some £2bn of local authority contracts have been signed.
Last year, a bidding war for Biffa, one of the biggest waste management firms in the UK, saw its shares rise while the stock market was in free-fall.
In April 200S, Biffa Limited was taken private by a consortium led by Montagu Private Equity and Global Infrastructure Partners in a E 1.7bn transaction.
"People still produce rubbish," says Nick Deal, secretary to the waste managers group at the Road Haulage Association (RHA). "It's a sector that you can't do without, so it tends to avoid the worst effects of the recession."
For hauliers, recycling and waste disposal present an opportunity to maintain a steady cashflow while other sectors of the economy are being buffeted by recessionary winds.
A vital lesson to learn
However, complex legal requirements governing waste disposal and recycling can sometimes tip up operators.
In February, an operator that failed to notify the Traffic Commissioner of two serious convictions for environmental offences was been taken off the road. The licence held by Thomton-Cleveleysbased Coastal Waste was revoked by North-Western TC Beverley Bell.
The company had been trying to increase its 0-licence authorisation to six vehicles and three trailers with an additional operating centre, and to upgrade its licence from restricted to standard national.
For the company, Andrew Woolfall accepted that a number of convictions, including two serious ones against director Jason Stephenson, had not been declared when the licence was applied for. Stephenson was under the impression he was not required to notify Environment Agency prosecutions.
This is a key lesson to all hauliers working in waste and recycling — bear in mind that an infringement of environmental legislation will be taken into account by TCs.
For this reason, some hauliers have found it difficult to stay in the market and have sold out to more specialist operators. In 2007 Dewsbury, West Yorks-based M&B Waste Management was bought by recycling company Greenstar, after its owners decided it was the only way the firm could survive.
At the time, Clive Hoyland, M&B's managing director, said pressure from industry regulations and a commitment to maintaining the jobs of all 70 of its staff meant it had to sell to a "forwardthinking, dynamic organisation':
This is typical of smaller operators in the sectors, says Deal. -lhere are only a few very big companies-such as Virodor and Biffa and most of them are buying up small companies."
This is because bigger firms can offer end-to-end service, by recycling waste as well as transporting it, he continues.
Of course, Deal says, the nature of the sector makes it heavily regulated, which is something hauliers have to stay on top of.
He continues: "Some hauliers find it difficult to cope with the legislation and paperwork involved with recycling and waste disposal. That's why some firms stay at the skip-hire end [of the market], while others are able to bid for local authority contracts."
That said, Wigan-based Blakely's Waste Management is proving hauliers don't have to be giants to compete in the market but they have to stay on the right side of the law.
"That's why people chose to have us," says general manager Graeme Knight. "The businesses that we deal with have teams dedicated to the environmental stuff, so if you want to win contracts, you have to make sure you are up to the right standards. If we want those customers, we have got to be in a position to provide that level of evidence."
Beating the recession The success of Blakely's has helped it to invest Lim in its trucks over the past year, reveals Knight. Its 30-strong Scania fleet now includes nine trade waste vehicles, six front-end loaders, five roll-on roll-offs and five skip trailers,
Although business has been affected by the recession, the firm's workload has not fluctuated a great deal, Knight says. This is because work is structured in I2-month contracts.
Even experienced hauliers in the market have suffered at the hands of legislation, which leaves little room for error. PB Donoghue Haulage and Plant I lire boasted a 30-year unblemished record until its conviction at St Albans Crown Court in May (TB Donoghue guilty after waste mix-up. CM 14 May).
The company was fined £4,500 and ordered to pay £5500 costs after pleading guilty to illegally dumping waste. lit its defence, the firm said a "clerical error" had led to two tippers dumping waste remaining from recycled soil on to land that was being landscaped to prevent flooding. The waste should have gone to landfill.
At the time, the company's lawyer, Peter Stringfellow, said "It was not a deliberate act. It was just loading the wrong stuff into the right vehicle."
Deal says hauliers must be aware that the Environment Agency can apply tight restrictions to operators in the market, particularly trans-frontier shipments However, for others, new laws in recycling has created new opportunities.
Last year, Wincanton invested E5rn in doubling its waste electrical and electronic equipment (WEEE) recycling capability, to complement its existing WEEE treatment and fridge recycling plant at Billingham. Teesside, which opened in March 2006 at a cost of £4.5m.
From 2007, the law stated that electronic equipment has to be separated out from other municipal waste and recycled or disposed of safely. Quite often, businesses will contract this responsibility out to a third party, which is where specialist hauliers come in.
So, for those prepared to deal with the mountains of paperwork and the responsibilities of complying with some of the most stringent and encompassing laws, the waste management and recycling sector seems to be holding up well in the face of a severe recession. • • www.letsrecycle.comflegislation