12 October 2010

WRG unveils plans to move away from landfill - letsrecycle.com

Waste Recycling Group has unveiled an ambitious strategy to move away from its reliance on landfill and develop a wide range of recycling and energy recovery facilities.

The Northampton-based company is planning to develop five to six million tonnes of alternative treatment capacity over the next ten years at its waste management and landfill sites across the UK, which are receiving declining volumes of waste as recycling rates increase and landfill tax levels rise.

We must offer the full range of treatment services to ensure that we capture as much value in terms of resources and energy as possible from waste 

Paul Taylor, WRG

New facilities will include pre-treatment, materials recycling facilities, mechanical biological treatment plants, anaerobic digestion and thermal treatment plants.

This infrastructure is expected to cost £1.5 billion and is intended to maintain the company's position as a major player in the UK waste industry. The company currently handles over 10 million tonnes of waste a year - of which 70% is sent to landfill.

To achieve its aims, WRG will draw on the support and experience of its parent company, the Spanish services and construction giant FCC, which is undergoing a transformation of its own.

Originally focused on construction within Spain, FCC has been developing its business overseas - particularly in the area of environmental services and renewable energy. It was because of FCC that WRG earlier this year announced plans to develop wind farms on its landfill sites.

Paul Taylor, Waste Recycling Group (WRG) chief executive, said: "What WRG does today must be different to what we did 10 years ago. We can no longer afford to concentrate on landfilling the waste that is sent to us by our customers. We must offer the full range of treatment services to ensure that we capture as much value in terms of resources and energy as possible from waste on our customers' behalf.

"We want to maintain our position as a leading player in the UK market and we have to provide a range of diverse collection, treatment and disposal options."

Mr Taylor explained that, when he took up his role in December 2009 the link between WRG and FCC had not been fully exploited, but that it would be key to the businesses' success going forward.

He pointed to FCC's experience in areas such as anaerobic digestion and mechanical biological treatment which are relatively new technologies to the UK, as well as synergies with FCC's other UK waste business, Rochdale-based municipal waste collection company Focsa Services.

As WRG has limited experience in waste collection, he said that Focsa would be important for securing material supply for FCC in future and that it would be strengthened to ensure WRG did not lose volumes. Potential acquisitions in this area are seen by the company as a possibility.

Mr Taylor explained that there were currently no plans to bring all the company's under the FCC name, but that some back-office functions between Focsa and WRG had been integrated and that all FCC businesses in the UK were branded as being under the FCC umbrella.

WRG says that the number of sites it owns, such as this landfill site, are a huge asset going forwardWRG says that the number of sites it owns, such as this landfill site, are a huge asset going forwardWRG currently runs 259 waste management sites in the UK, including two energy-from-waste plants and 126 landfill sites, 63 of which are closed. This could give it an advantage in terms of planning, which has been a major stumbling block for many waste management companies.

Mr Taylor said: "We have got a really good asset based. Good sites with lots of land with an established use for handling waste materials. In planning terms that is a big advantage for us and we have lots of plans. That is a real strength for us."

Going forward, Mr Taylor said that the company would continue to bid for the remaining PFI and PPP waste contracts as it represented strong long-term material volume and income, as well as interim local authority deals.

The company is currently one of four shortlisted companies for the Milton Keynes and Northamptonshire PFI contract (see letsrecycle.com story) and is also one of two companies left in the running for North Lincolnshire county council's waste contract. It is also one of the final two firms battling it out for the Buckinghamshire's PPP deal (see letsrec ycle.com story). FCC - through WRG and Focsa - is also bidding to produce fuel for the North London Waste Authority's £4 billion pound waste PFI.

Mr Taylor also said that commercial and industrial waste would be of growing interest to WRG, which he estimated would account for about four million tonnes of its business a year by 2020.

However, Mr Taylor said that there were a number of challenges which WRG needs to bear in mind to make its plans a reality.

These include uncertainty over planning, PFI and PPP, local authority spending cuts, the Landfill Allowance Trading Scheme and the government's ongoing review of waste policy. More clarity on these issues is expected to come in next month's Spending Review.

Alongside this, the company said it would need to train staff to equip them with the necessary skills.

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