Cleanaway opens new Melbourne depot

Cleanaway CEO Vik Bansal has officially opened the company’s new Perry Road Office and Collections Depot in Dandenong South.

The 53,000 square meter depot will house Cleanaway’s business and operational teams including the Victoria Post Collections leadership team, the commercial, industrial and municipal collections’ business, sales, administration, finance and fleet teams.

According to a Cleanaway news statement, the site features a 20-bay workshop facility designed for vehicle compliance and fleet productivity, with paved parking areas for 164 collection vehicles and the new electric vehicle fleet.

“The site is also equipped with fuelling stations with 100,000 litre capacity and automatic truck and parts washing bays,” the statement reads.

“Bringing together our administrative and operational teams from across Greater Melbourne is a key step forward to serving our customers better and making a sustainable future possible for communities across Australia.”

Related stories:

Cleanaway trials electric waste collection vehicles

The first of two fully electric Cleanaway waste collections vehicles have begun kerbside collections in Victoria as part of a three-month trial.

The first vehicle began servicing household collections in Hobsons Bay. City of Greater Geelong and Moonee Valley will also host the vehicle to ensure it is tested across a variety of terrain and in different municipal settings.

Cleanaway CEO Vik Bansal said the vehicles are among the first in Australia to service kerbside collections, and will be under pressure to carry full loads and complete scheduled runs every day.

“With almost 5000 vehicles on the road each day, servicing homes and businesses all over Australia, we are looking for ways to do that more sustainably while continuing to deliver consistent service,” Mr Bansal said.

“Sustainability is about more than removing emissions at all costs. If service levels drop or waste collection costs increase significantly for ratepayers – that isn’t sustainable.”

Cleanaway Head of Fleet Paul Young said the company is optimistic about proving the reliability of the technology.

“The trial is designed to encourage fast learning so the electric vehicles can continue operating once the trial has ended, allowing Cleanaway to introduce more electric and combination fuel vehicles to the permanent fleet,” Mr Young said.

“With zero emissions, the vehicles are expected to run for 180-200 kilometres before needing to recharge. The brakes also regenerate – reducing repair and maintenance costs and the consumption of other parts like brake pads.”

According to Mr Young, the vehicles significantly reduce noise, making early morning or late-night collections possible for some waste streams.

Hobsons Bay Mayor Jonathon Marsden said the trial complements the great work already happening in the sustainable transport realm.

“These initiatives support our key priorities in the Hobsons Bay 2030 Community Vision of exploring sustainable practices and growth through innovation, technology, job creation and education,” Mr Marsden said.

“It’s also a step in the right direction of council’s draft Waste and Litter Management Strategy 2025 to trial alternative fuels in the waste, recycling and litter collection fleet.”

The vehicles were commissioned by Cleanaway in conjunction with SEA Electric and Superior Pak and are not yet in mass production.

Related stories:

Cleanaway releases FY19 half-year results

Cleanaway has announced its financial results for the six months ending 31 December, reporting the integration of Toxfree is on track and all operating segments increased revenue and earnings.

An ASX statement shows gross revenue increased by 46.4 per cent to just over $1.7 million, with net revenue increasing by 47.4 per cent to just over $1.6 million.

Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 43 per cent to $221 million.

The company’s solid waste services reported net revenue increases by 30 per cent to $682 million, with EBITDA growing by 26 per cent to $176 million. Growth was reportedly enhanced by the ramp up of major contract wins such as the NSW Central Coast, Coles, NSW Container Deposit Scheme and commencement of a Brisbane City Council resource recovery contract.

Related stories:

Cleanaway’s industrial and waste services reported increased net revenue, earnings and margins, with net revenue increasing by 129 per cent to $177 million. EBITDA increased 194 per cent to $23.2 million. The company said modest organic growth occurred taking into account the completion of the Toxfree Wheatstone project.

The acquisition of Toxfree has increased scale in this segment, allowing for segementation and management across two strategic business: resources and infrastructure.

The statement said that the pipeline of work across both infrastructure and resources markets is encouraging, although at this stage it is too early to be confident on the timing of project commencements.

The liquid and health services segment saw net revenue increase by 77 per cent to $251 million and EBITDA by 93.2 per cent to $42.7 million.

“Hydrocarbons had a good first half and remains on track for further growth with increased production efficiencies and improved oil price movement,” the ASX statement read.

“Hazardous and non-hazardous liquids performance was disappointing. We are working to improve its performance and remain confident that this will be achieved.”

An interim dividend of 1.65 cents per cent has been declared representing an increase of 50 per cent over the corresponding period.

Positive earnings momentum is expected for the remainder of the year via organic growth and full realisation of synergies.

Cleanaway Chief Executive Officer Vik Bansal said he was pleased to present results that deliver on the company’s promise and commitments.

“The safety of everyone at Cleanaway has and always will be our number one priority. The alignment of culture and behaviours needed to ensure our target of Goal Zero remains a priority as we continue the integration of Toxfree,” he said.

“We are pleased with the Toxfree integration process and remain confident of delivering the $35 million of synergies from the acquisition.”

Mr Bansal said that while margins have improved compared to the second half of FY18, the company believes that further improvements can be achieved as it continues to implement synergies and operational improvements across all segments and businesses.

“Development of our prized infrastructure as part of Footptint 2025 continued at pace. During the half we completed construction of post collection facilities in Sydney and Perth, an organics facility in Melbourne and upgraded our soil treatment facility in Sydney,” he said.

“The acquisition of Toxfree and the numerous strategic initiatives which we continue to implement across the company have further strengthened our position as the leading waste management company in Australia.”

Cleanaway unveils new optical container sorting facility

Cleanaway has officially opened its new automated optical Container Sorting Facility at Eastern Creek, NSW.

The facility initially opened on 1 December 2017 and included a manual sorting line, which used magnetic sorting and manual picking to separate steel, aluminium, cartons and plastics with a capacity of 1.5 tonnes per hour.

Related stories:

With construction of the new automated sorting line completed, the facility now has a capacity of eight tonnes per hour.

Optical sorters used in the plant identify containers based on their material type at thousands of reads per minute with air jets being used to separate them for compaction and baling.

These baled materials are then distributed domestically and internationally to be recycled back into food grade containers.

Since beginning operation last year, the facility has processed most of the 900 million containers collected by the NSW Return and Earn scheme.

The NSW Government’s scheme aims to reduce the volume of litter across the state by providing a 10-cent refund for each eligible container returned.

Cleanaway CEO and Managing Director Vik Bansal said schemes such as Return and Earn require the community to pre-sort containers for recycling, reducing the level of contamination at the source.

“With the new sorting technology installed at this facility, we are now able to improve the quality of the commodity streams even further,” Mr Bansal said.

“The Eastern Creek Container Sorting Facility is a critical part of our Footprint 2025. We’re committed to putting the infrastructure and facilities in place to deal sustainably with Australia’s waste, well into the future.”

Mr Bansal says the challenges facing the waste industry over the past 12 months have changed the way Australians view waste.

“It is more important than ever before that we work together to address these challenges. Return and Earn is a great example of that,” he said.

“It has been encouraging to see so many people getting involved and increasing the amount of recyclables being sorted at the source.

Coupled with a better network of facilities to sort the containers collected, we can produce commodity streams which are in demand, meaning more items are being recycled into new products,” Mr Bansal said.

NSW Environment Minister Gabrielle Upton said the Return and Earn had been a great success, reducing litter across NSW by a third.

“I commend the people of NSW and congratulate Cleanaway on their state of the art facility that supports Return and Earn to provide a smart solution to reduce litter in NSW and contribute to a more sustainable future,” Ms Upton said.

ResourceCo and Cleanaway open Wetherill Park PEF plant

The largest resource recovery and Processed Engineered Fuel (PEF) plant in Australia has been unveiled at Wetherill Park in Sydney.

Owned in a joint venture between resource recovery company ResourceCo and Cleanaway, the plant is licensed to receive up to 250,000 tonnes a year of dry commercial and industrial, and mixed construction and demolition waste, to recover commodities including metal, clean timber and inert materials, with the balance converted into PEF.

Over its lifetime, the plant is expected to abate more than four million tonnes of carbon emissions.

Related stories:

Cleanaway’s customer base and waste supply in NSW will help drive volume to the facility to divert waste from landfill.

PEF is used as a substitute for fossil fuels in both domestic and offshore markets in the production of cement.

The plant will supply Boral, Australia’s largest construction material company, with PEF for its Berrima cement kiln as a substitute for coal.

Chief Executive Officer Sustainable Energy at ResourceCo Ben Sawley said the new plant will divert up to 50,000 truckloads of waste from landfill, while also reducing reliance on fossil fuels such as coal and gas.

“It will replace over 100,000 tonnes of coal usage per year alone and will take the equivalent of 20,000 cars annually off the road in terms of greenhouse gas emissions,” Mr Sawley said.

“We’re committed to playing a key role in Australia’s future sustainable energy mix, by reducing waste and lowering carbon emissions through production of a commercially viable sustainable energy product,”

“The opportunity to tap further into this market is huge and it makes good sense, both environmentally and economically,” Mr Sawley said.

Cleanaway Chief Executive Officer Vik Bansal said this is an important new resource recovery solution in New South Wales that creates a landfill diversion option for commercial and industrial, residual recycling, and some construction and demolition waste.

“Investment in resource recovery and innovative waste to energy solutions is essential to making a sustainable future possible, and one of the ways we’re delivering on our Footprint 2025 strategy,” Mr Bansal said.

Cleanaway and ResourceCo’s Wetherill Park facility

The project was supported by a funding from the Clean Energy Finance Corporation (CEFC), which had committed $30 million in debt finance to support development of the plant, as well as an additional plant at a second Australian location still to be identified.

CEFC CEO Ian Learmonth said the priority in managing waste must be to reduce the amount waste produced in the first place.

“With what remains, we need to invest in proven technologies to repurpose it, including as alternative fuels. By turning waste into PEF, this facility is showing how industrial processes can reduce their reliance on fossil fuels,” he said.

“We can also reduce the amount of waste materials going into landfill, an important factor in cutting our national greenhouse gas emissions,” Mr Learnmouth said

CEFC Bioenergy and Energy from Waste Sector lead Henry Anning said the CEFC was working with the waste management sector to increase energy efficiency and energy generation, as well as reduce carbon emissions.

“With Australia’s waste sector facing considerable disruption, now is the time to adopt new ways of doing business,” Mr Anning said.

“With the right investment in proven technologies, companies can turn our urban and industrial waste into new energy sources, creating an important revenue stream while also reducing landfill gas emissions.

“In Australia there is a growing commercial opportunity for resource recovery, reinforced by tightening state government landfill regulations. We are working alongside waste companies to invest in long-term infrastructure that can make a lasting difference to the way we handle our waste,” he said.

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.

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.

Related stories:

“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.”