Waste Management Review talks to some of Australia’s largest waste management companies about the role of scalability in the future of the waste sector.
This article is the third in a three part series featuring Bingo Industries, Cleanaway, Corio Waste Management and SUEZ.
SUEZ Australia and New Zealand has developed its own action plan internally. It focuses on circular economy and driving partnerships and innovation across new technologies.
CEO Mark Venhoek calls for a fundamental change in the market through new infrastructure with WtE one part of the bigger solution underpinning broader initiatives.
As part of this paradigm shift, he wants the packaging sector, federal government and state and territories to step up and show more leadership in taking responsibility for their material processing.
When it comes to the broader structure of the industry, Mark says it’s not for SUEZ to comment on the specifics of others out there, but strong leadership is key.
“I do believe if you have a strong sector with various leaders it’s probably easier to make some changes.
“We have quite a bit of industry fragmentation around the industry but I guess the leadership for me is so not so much about market share or revenue, but what the changes we are going to make in terms of say, building new infrastructure and innovation.”
He says the fundamental changes required in the marketplace will not necessarily be supported by the size of one’s business, but strong leadership in areas such as safety and compliance.
Importantly, long-term visibility by the regulator and certainty of volumes is required to commit to sites and large-scale capital investments such as in WtE. In this vein, decisions such as the mixed waste organics ban in NSW are not helpful and undermine planning and confidence.
Mark says a WtE solution could support markets such as plastics that have fallen victim to the laws of supply and demand or don’t meet contamination standards.
“It would be a very good support and potential backup plan to ensure those volumes don’t end up in a landfill,” he says.
He says that SUEZ Australia and New Zealand is looking at a range of WtE projects. Some that have already been announced include the East Rockingham facility in WA as well as a joint venture with Australian Paper in Victoria.
With the growth of population and the fact that planning new facilities can take five to 10 years, SUEZ is also committed to expanding its Elizabeth Drive Landfill in NSW.
“In the interim, typically in the NSW, Sydney and greater region, we’ll still have a level of dependency on landfill I’m afraid, and a result of that we will have to expand that facility. It’s in the interest of the public to be able to secure a proper outlet.”
Mark says that resource recovery parks such as Lucas Heights are likewise only one part of the solution, covering only a small percentage of Sydney’s waste and not the residual stream.
“It will solve part of the problems that we might have but only on a small scale,” he says.
“Most of those facilities are capable of treating a small percentage of the waste that is being generated even if there are niches, so you need solutions for the mainstream volumes.”
Mark says that where relevant, SUEZ will partner with companies that have an appropriate site and permit and align with the company’s vision and strategy. In some cases it may also reduce investment uncertainty, he adds.
SUEZ is driving a number of unique projects overseas. The company has opened one of Europe’s most advanced packaging sorting facilities for lightweight packaging in Ölbronn, Germany with an annual processing capacity of 100,000 tonnes.
In this case, Mark says the commercial environment in Germany is conducive to building a facility on a long-term contractual basis.
“There’s nothing stopping us from opening these kinds of facilities,” he says.
“If I look at the one in southern Germany, it is the most modern across the globe but it is governed by a very special system around the Green Dot, meaning plastics, paper, cardboard and metal are collected separately and treated by these levels of infrastructure.”
In the Bang Phli district near Bangkok, the company plans on building a recycling plant that turns plastic waste into circular polymers, strengthening its presence in South-East Asia.
Mark says that in Bangkok, there is not nearly the level of scalability of Australia to support the conditions.
In terms of whether a four-bin system of food and glass could be the answer to Australia’s recycling concerns, he says that anything that can be done to support source separation at a higher level would make an impact on generating better quality raw materials.
“We are very supportive of the COAG initiative [waste ban] and planning they put ahead, but I do believe we can do it,” he says.
“There will be a bit of pain in the coming years, but I am also sure with collective passion and energy, we can see some magnificent outcomes.”
Waste Management Review talks to some of Australia’s largest waste management companies about the role of scalability in the future of the waste sector.
This article is the second in a three part series featuring Bingo Industries, Cleanaway, Corio Waste Management and SUEZ.
With more than 300 sites, 115 prized infrastructure assets and around 6000 employees and 4950 vehicles, Cleanaway is Australia’s largest waste management company.
At the heart of its approach to scaling up and supporting Australia’s recycling woes is Cleanaway’s Footprint 2025 strategy – a plan to significantly grow its infrastructure by 2025. Launched in 2015, Footprint 2025 continues to expand.
It’s already done so in 2019 with a new waste transfer station and resource recovery facility in Sydney licensed to process 300,000 tonnes of putrescible waste per annum. In addition, its recent infrastructure moves also include a new South East Melbourne Organics Facility, a 50 per cent stake in ResourceCo’s process engineered fuel facility in Sydney and a transfer station in Perth.
Official data on market share is difficult to come by, but CEO Vik Bansal estimates the company controls around the mid to high 20 per cent of the total waste management market.
Its annual report shows the integration of Toxfree is on track to achieve a $35 million synergy target by June 2020. Cleanaway’s acquisition of Toxfree in 2018 was unopposed by the ACCC and concluded that increased vertical integration would be unlikely to substantially lessen competition due to competitive constraints imposed by alternative suppliers.
The official review shows customers can and do disaggregate contracts if they are dissatisfied with pricing and/or service levels. Likewise, there are other large suppliers present in multiple waste streams and geographical areas throughout Australia.
Cleanaway’s net revenue, which represents gross revenue less landfill levies collected and passed through the customer, increased by 35 per cent in 2018-19 to $2.11 billion compared to the prior corresponding period. Its growth was driven by a combination of organic growth and the Toxfree acquisition.
“We have spent about $150 million building prized waste infrastructure across the country which includes transfer stations, resource recovery centres, used oil refinery and liquid, hazardous and non-hazardous waste processing facilities organically and via the acquisition of Toxfree,” Vik says.
Its earnings before interest, tax, depreciation and amortisation increased 34 per cent to $433.7 million in 2018-19 due to improved profit performances across solid waste services, industrial and waste services and liquid waste and health services. In its annual report, Cleanaway highlights itself as having an excellent balance sheet with debt ratios well within banking covenant requirements.
The annual report declares volatility in the commodities supply chain has led to increased sorting costs and instability in commodity pricing. Vik has often maintained Australia’s recycling crisis presents an opportunity rather than a threat to the viability of the sector.
“It is the right thing for the waste industry in Australia and in general. There is something not right about waste going to developing countries and them sorting it out. We just don’t want that to happen,” Vik says.
He says that being a publicly listed entity places additional pressure on Cleanaway as a company, but it’s a challenge it is pleased to take on.
“Because we are a listed entity and have to go to market every six months, our changes become a lot more visible than an international subsidiary or a company which is not listed,” he says.
The positive side effect of market fluctuations is that Cleanaway has fast-tracked much of its Footprint 2025 strategy to support the local marketplace.
Following the collapse of SKM Recycling Group, Cleanaway Waste Management acquired the senior secured debt in the group for around $60 million with the exception of its glass recovery services business. This includes the property, plant and equipment from a network of five recycling sites, comprising three materials recovery facilities (MRFs), a transfer station in Victoria and a MRF in Tasmania. SKM also has two sites in South Australia.
KordaMentha have been appointed the receivers of the group. At the time of Waste Management Review’s interview with Vik, Cleanaway was looking to acquire the assets and return them to a sustainable footing as part of the sale process being undertaken by the receivers.
Prior to the publication date, Cleanaway was successful in its bid for SKM assets with completion of the process on track for the end of October. One of its sites in the network includes an advanced plastic sorting facility in Victoria.
Commenting on the acquisition, Vik said significant progress had been made in clearing waste stockpiles from the sites, repairing plant and equipment and bringing the sites to required safety, environmental and operational standards.
“We expect to gradually restore operations in Victoria over the coming months,” he said.
Speaking to Waste Management Review, Vik agrees some systematic changes are needed to support the future viability of the industry. However, he concedes collection will be difficult to consolidate due to the low barriers to entry.
“There is something fundamentally wrong about the industry structure. Aside from Visy, there is not even a single big waste management player which is upstream and vertically integrated. There is not even a single big waste management player in commingled recycling in Victoria.
“China’s National Sword has triggered the industry structure to go back on a balanced, even, long-term sustainable footing and hence our interest in SKM assets.”
“A company like Cleanaway cannot have a Footprint 2025 strategy flowing through without commingled assets in Victoria. That is part and parcel of a vertically integrated waste management company.”
It was speculated that Cleanaway was interested in buying SKM’s glass recycling business not covered by the receivership. Vik says that while Cleanaway was initially interested in this, the acquisition is now in doubt given the scale of glass stockpiles.
Instead, should Cleanaway acquire SKM’s assets, Vik says Cleanaway will look at building its own glass beneficiation plant.
He says that Cleanaway’s future focus will be to become a downstream processor.
“We see ourselves investing in plastic pelletising and going downstream on glass crushers,” Vik says.
Vik says that Cleanaway’s view is that Australia needs to move to a harmonised national four-bin system with mandatory FOGO and glass bins the key to improving commodity value.
“We are ready to invest a lot more in different parts of the country if we can see that certainty of policy and harmonisation,” he says, adding there is a fair amount of Footprint 2025 still to be revealed.
Likewise, he says that whenever Cleanaway invests, it looks at the entire value chain, including location, policy framework and its total market share.
Vik says that each state should have a container deposit scheme but recognises it might be difficult to harmonise all at a national level.
He says this system would then become best practice through better education, investment in infrastructure and manufacturer and consumer acceptance of recycled material as the final piece of the circular economy puzzle.
Footprint 2025 is going from strength to strength as Cleanaway in October announced a joint venture with Macquarie Capital’s Green Investment Group to develop a waste-to-energy (WtE) project in Western Sydney.
A site has been acquired for a potential facility in Eastern Creek and an environmental impact statement is being prepared and released for public consultation early next year. The site is expected to cut Western Sydney’s annual landfill volumes by 500,000 tonnes – almost a third of the red bin waste generated per year in the local area.
Trevor Thornton is a lecturer in hazardous materials management at Deakin University and has prior experience with the Environment Protection Authority Victoria.
He says the metropolitan areas certainly benefit, but one concern would be whether the same level of service is afforded to regional areas.
“I’ve heard some issues about large companies that get a statewide contract but just outsource a lot of the more distant rural areas under their banner, but they don’t get the same service to the client.
“But I think in the main, if you’ve got five or six companies offering the complete service, I think that’s a good thing.”
Likewise, he believes the purchase of ailing companies such as SKM can only be a good thing, and that if additional oversight is required, that would be a matter for the ACCC.
He says the trend towards consolidation in Australia would mirror that of other more populous nations such as the US, Canada and parts of Europe.
Mathew Dickens, CEO of Corio Waste Management, a family-owned business focused on waste collection and organic waste treatment based in Geelong, sees an opportunity from consolidation to compete with the major players.
“Consolidation does lead to less competition, but it can also mean the acquirer has more to lose as you have most of the market share and that can only go in one direction, but for companies my size it creates opportunity,” he says.
Mathew says with further consolidation, Corio can aim to compete on service standards, respond quickly to changing customer requirements and provide a point of difference as a family-owned business.
“From a customer perspective it [further consolidation] would mean less choice and higher prices, and that’s not a problem for us as we don’t compete on the basis of price. We know what our costs are because we measure and analyse them all the time,” he says.
He says that Corio tends to focus on what it can offer in terms of variety and frequency of service, collection standards and customer service.
Mathew says the recent consolidations are nothing new but rather history repeating itself in an industry cycle where consolidation inspires new entrants into the industry.
In the US, integrated companies such as Waste Management Inc, Clean Harbors, Republic Services and Advanced Disposal dominate the market.
Mathew points out that Republic Services is an example of smaller operators merging to become a larger organisation, a trend that could always repeat itself locally.
Republic Services is one of the largest providers of non-hazardous solid waste and owns around 207 transfer stations and 190 landfills, according to Superperformance SAS data.
He says there will still be room for niche, specialised operations that handle smaller volumes.
“If there is going to be a remanufacturing industry that’s developed onshore, you need to spread that risk,” he says.
Mathew says that Corio remains focused on growing its organic waste collections in Geelong and Melbourne treated at its composting facility based in Shepparton.
“We want to build tunnel composting facilities in other regions in Victoria. It relies on government contracts, but we’re confident we can make it happen,” he says.
Next week’s instalment features an interview with SUEZ CEO Mark Venhoek.
The Australasian Waste & Recycling Expo has announced its upcoming 2019 Speaker Series, including a new stage addition.
Over the last 10 years AWRE has built a reputation for attracting some of the finest speakers from Australia and overseas to its two-day event, featuring leading minds from not only the waste and recycling industry, but all levels of Australian government and Top 200 ASX listed companies.
It appears 2019 will be no different, with speakers from the Department of Planning, Industry and Environment, the Waste Contractors and Recyclers Association of NSW, Australian Packaging Covenant Organisation, Australian Battery Recycling Initiative and Veolia Australia & NZ.
Headlining the Industry Forum, presented in partnership with the Department of Industry, Planning and Environment, will be a panel discussion on ‘The Future is Recycling,’ which will deep dive into the core issues, insights and opportunities currently facing the waste and recycling sector.
Panellists include Veolia Australia & NZ General Manager Resource Recovery NSW Christine Hodgkiss, Renew Chief Operating Officer of IQ Renew Graham Knowles, SUEZ Australia & NZ State General Manager NSW Tony Grebenshikoff and Waste Contractors and Recyclers Association NSW Executive Director Tony Khoury.
According to an AWRE statement, the event will also shine a spotlight on the national issue of food waste, with the addition of the new Food Waste Stage.
“From sustainable package solutions, updates on the national food waste strategy to presentations from true food waste warriors, AWRE is driving the conversation on food sustainability,” the statement reads.
“Key speakers taking to the Food Waste Stage include industry experts from Coles, Fight Food Waste Cooperative Research Centre, Australian Institute of Packaging, Yume Food Australia and many more.”
AWRE 2019 will take place on the 30th and 31st October at the ICC Sydney in Darling Harbour.
SUEZ has renewed its contract as Sydney Trains’ waste management provider, continuing a seven-year partnership with the rail operator.
SUEZ will continue to service Sydney Trains’ network of infrastructure throughout the greater Sydney area and across New South Wales, including train stations and maintenance facilities operations centres.
SUEZ NSW State General Manager Tony Grebenshikoff said the renewal follows a competitive tender process, and reflects SUEZ’s record of successful service expansion across the Sydney Trains network.
“A new feature of the contract includes the introduction of advanced technologies, such as weight-based billing and enhanced reporting capabilities, as well as additional training modules that can be easily accessed by all employees through a range of devices,” Mr Grebenshikoff said.
“These and other initiatives will enable SUEZ to work closely with Sydney Trains to provide a seamless and streamlined experience under the renewed, up to 5 year, contract.”
Mr Grebenshikoff said SUEZ had worked closely with Sydney Trains on the rollout of multiple initiatives to achieve waste reduction targets.
“We are proud to have maintained an average on time service success rate of 98 per cent,” Mr Grebenshikoff said.
“SUEZ looks forward to continuing to work with Sydney Trains to provide safe, reliable and efficient collection services across all sites, and supporting this essential public transport network in Australia’s largest city.”
Sydney Trains Chief Executive Howard Collins said the contract renewal enables SUEZ to continue an already well established partnership between the two parties.
“We have been satisfied with the service provided by SUEZ over the past seven years, and we look forward to seeing what new initiatives SUEZ has that will provide further efficiencies in waste management.”
Wastech National Projects Product Manager Mike McConnell takes Waste Management Review through the company’s materials recovery facility concept design process.
When China placed contamination restrictions on imported waste in 2017, Australian material recovery facilities (MRF) had to face up to the realisation that their technology wouldn’t meet the 0.5 per cent rate.
According to a 2018 federal analysis of Australia’s municipal recycling infrastructure, a major issue for MRFs is the lack of technical capacity to sort commingled, highly contaminated municipal waste materials to a standard that meets stringent export specifications.
In the wake of China, prices for plastic, cardboard and paper have dropped. Demand for higher quality material however had risen, which offers significant market opportunities for processors willing to invest in technical capacity and optical sorting upgrades.
Wastech National Projects Product Manager Mike McConnell says the complexity of current challenges makes turnkey solutions more attractive than ever.
“The industry is presently facing a unique set of challenges, and many recycling companies don’t have the time to sit down and analyse how to best upgrade their facilities,” Mike says.
“Through evaluating the industry via reports on waste volumes, equipment needs, collection methods and operational requirements, Wastech is able to provide clients with fully realised MRF concepts and design.”
According to Mike, the key to good business practice when developing a MRF is building trust with the client.
“Effectively turning a client’s initial request into a well-functioning MRF requires trust between both parties. We need to understand their volumes, waste composition and material process flows,” Mike says.
“At a minimum you will be working with the client for six months, and in some cases, it might take two years. It’s really important both organisations understand each other and the process.”
Mike says concept design begins with a study of the client’s needs, starting on the base level of whether they require a retrofit for an existing MRF or to develop an entirely new facility.
From there, Wastech looks at the client’s required volumes, tonnes per year and what waste streams the proposed plant will be dealing with.
Mike places high importance on this initial stage, noting the significant variability of waste streams and therefore the customer’s equipment needs.
“Understanding the composition of the waste stream is key as it informs all equipment purchasing decisions,” Mike says.
“For example, what kind of screening is needed? Does the client require optical sorting? Are they dealing with coloured or uncoloured containers? Are they dealing with both?”
Following this, Wastech examines what outputs the client is looking for in relation to desired end markets and purity.
“Looking at material process flow involves working out how the MRF will achieve the client’s specified requirements, most significantly the levels of purity needed to achieve the finished product,” Mike says.
“We formulate a material process flow and mass balance analysis, which then helps us determine what equipment is needed, and then we review that in detail with the client.”
Through a partnership with CP Group, an American separation and material recovery equipment manufacturer, Wastech is able to support MRFs for commingled recyclables, municipal solid waste, construction and demolition material, commercial and industrial waste, waste-to-energy operations and e-waste.
Wastech offers a range of screening equipment, notably the OCC Screen which automatically separates cardboard from other fibres and containers.
The company also provides optical sorting sensors, collection hoods to transport handpicked film, eddy currents for nonferrous material, metering drums, air drum separators, silo blowers, trommel screens, balers and conveyor belts.
“Following the initial design presentation, we can adjust and modify equipment choices,” Mike says.
“Once the client is happy and following multiple reviews of the initial concept and design, we conduct a number of site visits where we measure the existing or proposed facility to figure out how the equipment will best fit into the space.”
Following this, Mike says Wastech develops a 3D model for the client, which allows them to fully visualise the proposal.
“We find 3D visualisations to be a much more effective communication tool than simple facts and figures or drawings,” Mike says.
The next stage is the tender process, where Wastech provides a quote for the facility’s realisation.
“When we’re working with clients on the design and concept over a period time, be it local government or private companies, a real trusting relationship is established. They know what we are offering is value for money,” Mike says.
“In addition to relationship building, we have a long history of delivering MRFs, so clients know if they request a certain level of purity that’s what Wastech will supply.”
Mike says the SUEZ MRF in Bibra Lake, Perth, is a recent example of Wastech’s turnkey process.
Wastech was commissioned to upgrade an already existing SUEZ MRF through the introduction of optical sorting equipment, which, according to Mike, led to a significant increase in efficiency and subsequent output.
A spokesperson for SUEZ said in May that the company is committed to taking action to expand recycling and sorting processes.
“SUEZ’s investment in a state-of-the-art optical sorting system, in partnership with Wastech, is one of the ways we have enhanced our infrastructure to increase our recovery, and therefore recycling rates at our MRF in Bibra Lake,” the spokesperson said.
“This investment, alongside working with our customers, has allowed us to ensure contamination is kept to a minimum and helped to keep the kerbside recycling system sustainable.”
Australian Paper and SUEZ have appointed Sumitomo Mitsui Banking Corporation (SMBC) financial advisor for their $600 million waste to energy facility in Victoria’s Latrobe Valley.
Australian Paper General Manager Corporate Development David Jettner said SMBC would contribute additional commercial expertise to the project during the critical development phase.
“As financial advisor, SMBC will provide specialised support for project development and establish debt financing facilities, as we seek to build a missing link in Victoria’s waste management infrastructure,” Mr Jettner said.
“We are now moving forward to secure waste through the Metropolitan and Gippsland Waste and Resource Recovery Groups tendering processes, establish contractual engineering, procurement and construction arrangements and arrange funding for our project.”
Mr Jettner said SMBC would play a vital role in helping Australian Paper navigate those processes.
“They will also provide sectorial experience to the project as the mandated lead arranger, with 15 successful energy from waste projects internationally including the Kwinana project in WA,” Mr Jettner said.
“Our facility remains the first energy from waste project in Victoria to achieve an EPA Works Approval, and along with SUEZ and SMBC, we are excited to move a step closer to making our vision for Latrobe Valley energy production from residual household waste a reality.”
According to SUEZ Victoria General Manager Nat Bryant, less than one per cent of Australia’s residual waste is used for energy recovery.
Additionally, Mr Bryant said landfill is the only option for household waste from South East Melbourne and Gippsland.
“With the closure of the Hampton Park landfill by 2025, our project will provide a vital solution to south east Melbourne’s impending waste management crisis,” Mr Bryant said.
Australian Paper’s $7.5 million waste-to-energy (WtE) feasibility study has confirmed the social, economic, environmental and commercial viability of its proposed WtE facility in Maryvale Mill Victoria.
The study’s summary report highlights the waste management challenges facing south east Melbourne and concludes that Australian Paper’s WtE facility could provide a unique opportunity to address pending landfill closures.
According to the report, the facility could annually prevent 550,000 tonnes of waste from being trucked across Melbourne from municipalities in the south east to landfill sites located in the city’s west.
Australian Paper Chief Operating Officer Peter Williams said the project would result in an investment of over $600 million in the Latrobe Valley, creating 1046 jobs per annum for the three years of construction.
“With Melbourne’s looming landfill challenge Australian Paper’s WtE project is the missing link in waste management infrastructure for the south east – creating efficient energy from residual household and commercial waste and achieving a more sustainable outcome than disposal to landfills,” Mr Williams said.
“By diverting 650,000 tonnes per annum of residential and commercial waste from Victorian landfill, the facility could provide Melbourne with essential waste management and resource recovery infrastructure.”
According to Mr Williams, the facility will reduce CO2 emissions by more than 540,000 tonnes per year.
“By replacing natural gas at the Maryvale site, Australian Paper will return enough gas to the market to meet the annual needs of up to 70,000 Victorian households annually,” Mr Williams said.
“WtE technology is a proven and reliable low emissions technology, meeting the strictest European emissions standards and has been used extensively in Europe, Japan and North America for decades.”
Mr Williams said Australian Paper would now focus on the development stage, working with partner SUEZ to finalise approvals and seek to secure long term waste supply contracts.
The Bastille Festival in Sydney has teamed up with SUEZ to transition into a more environmentally sustainable event.
Director Vincent Hernandez said the festival welcomes hundreds of thousands of visitors over four days, generating an estimated 20 tonnes of waste.
“Tonnes of rubbish – plastic wine cups, food packaging, food waste, cigarettes buds and more. How can we do better?
“That’s precisely the question I asked myself after the success of last year’s festival but I needed an expert to lead us and SUEZ accepted the challenge to help us make a difference,” Mr Hernandez said.
SUEZ will implement the festival’s waste collection system to ensure waste is minimised and diverted from landfill.
SUEZ NSW General Manager Tony Grebenshikoff said simple changes such as installing appropriate recycling bins and raising awareness about what is and is not recyclable will make a significant difference.
Other changes include a plastic ban, and requirement that all stall holders use energy-saving LED lights.
Re-usable glasses and compostable cutlery and plates will be mandatory for food stall holders, and non-recyclable packaging will be eliminated for food consumed at the festival.
Wastewater and cooking oil will be collected separately and treated appropriately, and public transport will be encouraged.
The festival will also attempt to minimise the contamination of recyclable material and food waste by using separate organic and co-mingled bins, with a target of 75 per cent diversion rate from landfill.
Power generators will be shared by stall holders, operating on energy saver mode to optimise the use of electrical resources as well as using electricity generated from solar panels.
To support the effort, the festival will be working with local organisations, communities and individuals to help implement and manage the new policy.