Partner Article

Grant Thornton study reveals waste sector growth

Despite an overall decline in UK manufacturing production, analysis by business and financial adviser Grant Thornton UK LLP shows a 60% increase (from 15 deals in the first half increasing to 24 in the final six months of the year) in corporate financing deals in the waste and recycling sectors between the first and second half of 2012.

This is backed by forecasts from the Office of National Statistics, which states that the waste management industry is expected to grow by up to 3.1% in 2013-14, whilst the recycling and recovery market is forecasted to expand at 4% over the same period.

Recent corporate financing deals in this area include an institutional buy-out of Biffa; Kier Group’s acquisition of a 50% stake in Biogen and Viridor’s acquisition of Pulp Fiction’s paper recycling business.

Mike Read, director and head of waste at Grant Thornton UK, who is based in the firm’s Leeds office, commented: “Greater consumer awareness of the importance of recycling and corporate responsibility has increased the levels of recycling performance across both the municipal and commercial sectors.

“UK household recycling has grown consistently over the last 10 years with 43% of household waste sent for recycling between 2011/12 and this is reflected in an analysis of the deals within waste management.

“For example, recycling accounts for 39% of the deals by volume and, within this figure, paper recycling accounts for 38% of deals and electronic waste 17%.

“Whilst this creates commercial opportunities, the key to success is being able to offer high quality recyclates.

“Our analysis of recent deals shows targeted investment in developing new services and technologies to reclaim and reuse materials, which is vital.”

A number of factors look set to continue this momentum at the top end of the waste hierarchy.

The Department of Environment, Food & Rural Affairs (Defra) has recently published a consultation for its Waste Prevention Plan, with the goal of saving UK businesses around £17 billion and reduce greenhouse gas emissions by 16 million tonnes of carbon dioxide equivalent.

This was posted in Bdaily's Members' News section by Mark Lane .