Return and Earn sees half a billion containers returned

More than half a billion containers have been returned to Return and Earn reverse vending machines in NSW, eight months after the scheme launched.

The container deposit scheme aims to improve recycling rates and reduce the volume of litter in the state by 40 per cent by 2020.

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Each eligible container is worth 10 cents when returned to a reverse vending machine or depot.

Drink containers litter currently makes up 44 per cent of the volume of all litter throughout NSW and costs more than $162 million to manage, according to the NSW Environment Protection Authority.

The University of New South Wales (UNSW) was the first educational institution to install a reverse vending machine as part of the scheme.

UNSW Senior Manager, Environmental Sustainability Will Syddall said that while this initiative helps to reduce littering and improve recycling rates, it is just one step in improving the way we create and manage waste.

“In the waste hierarchy, reducing and reusing resources is better than recycling them. We encourage the community to use reusable water bottles and coffee cups so that they can avoid disposable cups and bottles altogether,” Mr Syddall said.

“We also recognise that we have more work to do to reduce the amount of single-use plastic and other consumables used on our campuses.”

According to the World Bank, half of the plastic ever manufactured was made in the last 15 years.

Cleanaway to enter into JV with ResourceCo

Cleanaway has entered into a binding joint venture agreement with ResourceCo to acquire a 50 per cent interest in ResourceCo’s Wetherill Park facility.

ResourceCo’s new Wetherill Park facility has the capability to divert 250,000 tonnes of waste per annum, reducing emissions and saving costs for businesses in the long-term – more information on that here. 

Located in western Sydney, the facility receives dry commercial and industrial waste. After extracting any commodities suitable for recycling, the balance of non-recyclable waste is converted into Process Engineered Fuel (PEF) that will be used as a substitute for fossil fuels in domestic and offshore cement kilns.

According to an ASX statement, the investment provides Cleanaway with a further waste disposal solution in NSW and forms an integral part of its Footprint 2025 strategy.

Waste processed by the facility includes residuals sourced from the Cleanaway Sydney transfer station, currently under construction, and other recycling facilities, in addition to commercial and industrial customers with source-separated collection systems.

The purchase price for the 50 per cent interest comprises a $25 million payment at completion plus an earn out of up to a further $25 million payable in two instalments over two years once the facility generates agreed earnings before interest, taxes, depreciation and amortisation targets.

The joint venture, to be branded “Cleanaway ResourceCo RRF” is part financed by a $10 million loan facility from the Clean Energy Finance Corporation, with additional funding from the New South Wales Environmental Trust.

The transaction is expected to be complete during the first quarter of financial year 2019, subject to satisfaction of customary conditions precedent and commissioning and performance standards.

Cleanaway Chief Executive Officer and Managing Director Vik Bansal said the investment plays a key role in the development of the company’s post collections footprint in NSW and its overall Footprint 2025 strategy, which encompasses the development of prized waste infrastructure assets across Australia.

“This facility is the only one of its kind on the East Cost of Australia and enables us to increase waste internalisation rates, and importantly, to offer an advanced resource recovery solution to our customers,” Mr Bansal said.

NSW consumers return and earn with TOMRA app

More than 100,000 people have downloaded TOMRA’s recycling app linked with the NSW Return and Earn scheme.

The free app, called myTOMRA, shows the status with Reverse Vending Machines (RVM) in NSW and has partnered with digital payment provider PayPal.

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Users can scan their personal barcode at the RVM and claim money from returned containers electronically.

The app shows whether a RVM is open, almost full, temporarily unavailable, or in sleep mode during out of hours periods. It also includes a map which can direct users to the nearest RVM.

The Return and Earn scheme was implemented in NSW on 1 December and has seen more than 310 million containers returned since it launched. It aims to reduce the amount of litter across NSW by 40 per cent by 2020.

Consumers are able to claim a 10-cent refund when they return an eligible drink container to a collection point in NSW. Most 150 millilitre to three-litre drink containers made from plastic, glass, steel, liquid paperboard and aluminium are returnable.

TOMRA Cleanaway is the network operator for the scheme, with TOMRA providing the RVM technology and Cleanaway delivering the logistics and sorting for collected containers.

Cleanaway releases FY18 half year results

Cleanaway has released its FY18 half-year results, reporting “strong organic growth”, with revenue up 8.4 per cent.

In a statement, the company said all operating divisions have increased revenue and earnings, with a strong cash conversion, while ramp-up and mobilisation of new major contracts is in progress. The sale of another closed landfill site in Victoria has reduced the landfill remediation provision by $5.4 million, the company said.

Cleanaway also provided an update on the acquisition of Toxfree Solutions, which it said is anticipated to be completed during the second quarter of 2018.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) was reported to be $154.2 million, a 2.8 per cent increase on the 2017 half-year results. Net revenue sat at $722.2 million, a 7.4 per cent increase on 2017 half-year results, while gross revenue sat at $785.5 million, an 8.4 per cent increase. Net profit after tax rose by 60.7 per cent compared to the same period to $45 million.

“Each of our three operating divisions – solid collections, solids post collections and liquids and industrial services – increased revenue and earnings in the period,” Chief Executive Officer and Managing Director Vik Bansal said.

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“During 1H18 we started the roll-out of a number of major new contracts.

“Development of our resource recovery footprint continues. During the half we commenced construction of our Sydney post collection which we expect to have completed by the first half of FY19.”

In its underlying divisional performance, Cleanaway’s solids collections and solids collections division reported increased revenue and earnings.

Compared to the previous corresponding period, net revenue for solids collections increased 9.3 per cent to $441.7 million. Solid post collections saw net revenue increase by 15.3 per cent to $107.9 million.

The liquid and industrial services division had a net revenue increase of 3.2 per cent to $214.7 million.

Mr Bansal said the acquisition of Toxfree was a transaction unanimously recommended by the Toxfree board, in the absence of a superior proposal. He said it is a strategically compelling transaction that will enhance the company’s capabilities in solids, liquids and industrial services, accelerate the implementation of its Footprint 2025 strategy, and provide a leading position in the attractive medical waste sector.

“To support the acquisition, we also undertook an equity raising that raised approximately $590 and was completed in January,” Mr Bansal said.

“We remain optimistic of receiving all the necessary approvals for the acquisition to be completed sometime during the second quarter of CY2018.”

Integration of the Toxfree business is expected to deliver about $35 million in annual synergies, released over a two-year integration period. Cleanaway completed a 3.65 non-renouncable pro rata entitlement offer at $1.35 per new share in conjunction with the Toxfree announcement. About $590 million was raised and 437.3 million new shares issued.

Discussing the outlook for FY18, Mr Bansal said recent major contract wins have established a firm base for revenue growth in its solids business, adding that the company remains optimistic of continuous improvement in the liquids and industrial services business.

“The cost disciplines we have in place, along with the further initiatives being implemented across the company, should result in both the solids and liquids and industrial services segments further increasing operational earnings in FY18.”

Commenting on the recent changes to the Chinese importation of recycling material, Mr Bansal added:

“The major issue within the industry is the level of contamination from the recyclable material collected from the municipal councils. This is commingled waste and has a much higher level of contamination than the waste received from the commercial and industrial sector.

“Cleanway’s exposure to the sale of these municipal sourced materials is minimal. However, we are in discussions with relevant municipal customers to mitigate any issues.”

 

Cleanaway’s new fleet arrives on the Central Coast

Cleanaway has rolled out a new fleet of 72 new waste and recycling trucks in NSW’s Central Coast Council as part of its 10-year contract with the municipality.

The service, which began on February 1, comprises general waste, recycling and green waste collection services as well as six free kerbside bulk waste collection services per year for each residence. Cleanaway will also be handing out 65,000 new 140 litre bins across the council.

Many of the team members from the previous supplier have joined Cleanaway, which according to the company will ensure minimal disruption for Central Coast Council residents.

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The 1Coast website and phone number will also stay the same, serviced by a call centre working out of a purpose-built facility based on the Central Coast.

Cleanaway have also equipped their fleet with their Cleanaview system, which provides near real-time service information and allows for single call customer service response and insights that aims to reduce contamination and improve recycling.

“We’re excited about getting started on the Central Coast after a period of extensive pre-contract preparation. It’s fostered a great working relationship and we’re looking forward to partnering with Central Coast Council to deliver a premium service for the next 10 years,” said Regional Manager – Sydney Municipal Michael Sankey.

 

Cleanaway agrees to acquire Tox Free Solutions

Cleanaway has agreed to acquire Tox Free Solutions (Toxfree) for about $671 million.

Cleanaway is offering $3.425 for each Toxfree share and the integration of the business is expected to deliver about $35 million in annual synergies over a two-year period. Toxfree shareholders will be able to receive a 5c a share interim dividend.

To fund the acquisition, Cleanaway will launch a fully underwritten $590 million 1 for 3.65 pro rate accelerated entitlement offer and draw down debt from a new multi-tranche facility.

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In a statement, Toxfree board of directors reportedly unanimously recommended that shareholders vote in favour of the scheme, and will vote the shares they own or control in favour of it, in the absence of a superior proposal.

Cleanaway Chief Executive Officer Vic Bansal said acquiring Toxfree will consolidate Cleanaway’s position as Australia’s leading waste management company, balancing and re-weighing its integrated waste model.

“The acquisition will accelerate the implementation of our Footprint 2025 strategy by adding prized infrastructure assets across the country, as well as contributing an exciting new business in the form of a leading, vertically-integrated provider of healthcare waste management products and services, including collection, transport and treatment of sharps, clinical and related waste,” he said.

The scheme consideration values Toxfree’s fully diluted equity at approximately $671 million. The transaction will be subject to standard regulatory conditions, including Australian Competition and Consumer Commission approval. A scheme booklet, independent expert’s report, reasons for the directors’ recommendation and details of the scheme will be prepared and provided for review to the Australian Securities and Investments Commission for review, expected in February 2018.

Toxfree expects to update the market on an indicative timetable in January 2018.

 

Cleanaway contract with The Hills Shire Council begins

Cleanaway has unveiled its new fleet of trucks as it prepares to begin a new 10-year contract with The Hills Shire Council, located in the north west of Sydney.

Outfitted with the latest technology and mechanical advancements, the trucks are expected to release fewer emissions into the environment and are marginally quieter as they navigate the Hills Shire network. They are also fitted with automatic reverse smart sensor brakes and up to seven cameras, with a bird’s eye camera for enhanced safety.

General Manager of the Hills Shire Council, Michael Edgar, said the new fleet were part of Cleanaway’s renewed 10-year contract with the Hills Shire.

“The council is bound to ensure that ratepayers receive the best quality, efficient and effective service and Cleanaway has proved time and again, they are reliable, economical and sustainable,” Mr Edgar said.

Apart from the new trucks, the contract also includes the rollout of new yellow-lidded bins, which have been distributed to most residents excepting those in new release areas.

The new waste contract starts on 1 October, 2017.

Cleanaway’s response to Four Corners

Vik Bansal, Clenaaway's CEO, talks about NWRIC

Last month’s Four Corners report on the waste industry raised a number of topical issues, including interstate waste transport (to avoid landfill levies), and the stockpiling of glass.

Waste Management Review recently covered the issue in detail speaking with MRA Consulting’s Mike Ritchie.

In August, Cleanaway released its statement in response to the program, with a focus on dispelling any associations with some of the issues raised in the investigation.

“We do not stockpile glass, nor do we transport waste from New South Wales to Queensland to avoid landfill levies, as others are reported to be doing. Cleanaway is committed to transparency and integrity in the way it operates,” the company said.

“We remain committed to our mission of making a sustainable future possible and to our Footprint 2025. Our entire value operating model is built around extracting the maximum value from waste, which means recovering more recyclables each year and exploring ways to continually reduce the volume of waste going to landfill.”

Below is the company’s response to some key questions arising from the program:

On the transfer of waste between NSW and QLD

Does Cleanaway transfer waste from NSW to QLD?

No. Cleanaway does not transfer waste from NSW to QLD.

We made a conscious decision at the time the landfill levy was abolished in Queensland to not transfer waste from New South Wales to Queensland.

Why doesn’t Cleanaway transfer waste from NSW to QLD?

This decision was made for two main reasons: first, because there are unacceptable risks associated with moving large volumes of waste across very long distances and, second, because we’re simply not prepared as a matter of principle to undermine the spirit of the legislation.

We remain committed to this and do not transfer waste from NSW to QLD.

On the stockpiling of glass and other recyclables

Does Cleanaway stockpile glass?

Cleanaway does not stockpile glass. In fact we have been exploring different options to more efficiently recycle and reuse glass across our network.

What is Cleanaway doing to avoid having glass stockpiles like some of the other operators in the report?

At our new Materials Recycling Facility (MRF) in Perth, we have invested in new glass crushing and clean up technology which allows us to create a glass sand product on site, which is ready for immediate use in civil construction as a sand/aggregate replacement.

Our Commodities Trading Desk remains focused on exploring new markets for recycled commodities to ensure the ongoing economic sustainability of our recycling operations.

We remain committed to our mission of making a sustainable future possible, and to our Footprint 2025. Our entire value operating model is built around extracting the maximum value from waste which means recovering more recyclables each year and exploring ways to continually reduce the volume of waste going to landfill.

On the risk of fire at landfills

How does Cleanaway manage the risk of fires from the coal seams when landfilling old coal mining sites?

All Cleanaway landfills are highly engineered and work to stringent licencing and environmental regulations.

Strict regulations specifically cover the disposal of waste in old coal mining areas. During cell construction, any coal seams must be removed.  As a further precaution, a metre of clay is laid along the bottom and the sides of the cell to act as a thermal barrier between the cell and the waste.

Was the fire at New Chum caused by the coal seams?

There was a fire at our New Chum landfill in July 2017. The fire was on the surface level of the open face of the landfill which suggests that it was the result of waste material being hot at the time of disposal.

Fire is a risk during the process of disposing of waste in any site, although it is rare.

We take the safety of our people and the community seriously, so all Cleanaway sites have stringent processes to detect and manage and mitigate the risk of fire. The fire at New Chum was detected and extinguished quickly – highlighting the effectiveness of our processes.

Cleanaway opens high-tech recycling facility in WA

The City of Perth has welcomed what Cleanaway says is the most high-tech recycling facility in the southern hemisphere.

Cleanaway says its brand new Materials Recovery Facility (MRF) has the capacity to process the city’s entire household recyclable waste.

Up to 250,000 tonnes of recyclable material, enough to fill almost 470 Olympic-size swimming pools could be handled by the new MRF, each year, they said.

Cleanaway said its MRF is the most advanced commingled recovery system in the country, with optical sorting technology capable of separating recyclable materials including plastics, metals, paper and cardboard. The new plant plans to deliver some of the highest diversion rates in Australia – 97 percent, in comparison to average recovery rates of less than 85 percent.

Mr Reece Whitby, Parliamentary Secretary for the Environment, today joined Cleanaway CEO and Managing Director Vik Bansal to mark the official opening of the MRF in Perth’s north east.

“This multi-million-dollar facility is a major step forward in both infrastructure and technology and will take recycling in Western Australia to a whole new level of quality and purity. The Perth MRF is a significant investment for Cleanaway in line with our Footprint 2025 plan, and a demonstration of our firm commitment to creating a sustainable future for Australia,” Mr Bansal said.

Cleanaway General Manager for Western Australia, David Williamson, said the high-tech facility has an unmatched capability designed to address Perth’s recycling needs for the next decade and beyond.

KEY POINTS FROM CLEANAWAY:

  • 95% recovery of all recyclables up to 10% higher than current MRFs
  • Up to 15% more waste diverted from landfill
  • 50 tonnes throughput of recyclable materials every hour
  • 53,000 tonnes of recovered paper and cardboard every year
  • 7,500 tonnes of recovered mixed plastics every year
  • 1,000 tonnes of recovered aluminium and metals every year

“With the city’s population set to reach 3 million by 2020, Perth households and businesses will be producing more waste than ever before. Increasing the state’s capacity for resource recovery is a top priority for Cleanaway. Our new MRF will be the first facility capable of recycling household and business waste. We are opening the door to small and large scale commercial customers and making recycling easier in the workplace, giving businesses the ability to recycle in the same way as households,” Mr Williamson said.

Almost 20 years ago, Cleanaway introduced the first MRF to Western Australia. These older MRF’s have now been decommissioned and replaced by the new MRF in South Guildford.

“This significant investment by industry recognises the value of resources that are lost when recycling is not maximised,” Mr Whitby said.

“The McGowan Labor Government is committed to improving recycling performance in Western Australia.

“It’s great to see the private sector playing an active role by complementing the actions taken by the Western Australian Government and local governments to promote improved recycling, such as the Better Bins kerbside recycling program.”