SITA creates SITA Recycling and reveals 15% recycling rate

The UK's largest waste management company has emphasised that it is looking to grow its recycling activities

SITA, the UK's largest waste management company has created SITA Recycling and at the same time reported a 15% recycling rate.

The new business will operate as a new national "corporate division" and be run by Paul Dumpleton as general manager. As well as providing a focus for handling its existing, waste paper volumes, the development also reflects SITA's plans to play its part in the move to increase the recycling of municipal and commercial waste.

Mr Dumpleton explains the concept of the new businesss: "We established a company — Sita Power — to handle landfill gases and Sita Recycling is something similar to that. This is a corporate and not a regional function and I report in to the main board director Marek Gordon."

The general manager confirms that the new division "has been set up to reflect the growing importance that SITA sees for recycling within its business structure." In the past, although the company has dealt with huge volumes of waste paper and construction and demolition waste, it has been best known for its landfill and energy from waste work.

Audit

In tandem with creation of the new company, SITA carried out an audit of all material it handled in the UK and found that it recycles some 1.47 million tonnes annually. This tonnage includes 350,000 tonnes of waste paper per annum, 320,000 tonnes of construction and demolition, 225,000 tonnes of composting of organic waste, 90,000 tonnes of metal out of CA sites, 60,000 tonnes of glass and 10,000 tonnes of plastics. The balance is made up by recycling other materials such as 80,000 tonnes of bottom ash.

SITA Recycling's activities have been split into two core regions with an emphasis on paper recycling. Operations manager for the Midlands and the North is Tony Payne. London and the South are the domain of Graeme Coombs. In particular Mr Payne will be responsible for the marketing of the paper products generated from the business through a trading and marketing base in Nottingham. This means that SITA Recycling will provide a single marketing arm for all the paper collected although implementation of this, emphasises Mr Dumpleton, will be "through a process of evolution — it will not happen overnight."

An important aspect of the operation will be strengthening the links SITA already has with SITA Recycling internationally as well as developing links in the UK. For paper, the international market will be important although a considerable tonnage is sent to UK domestic mills. The company recycles about 350,000 tonnes of paper and cardboard each year with exports going to the Far East and Europe.

The processing and shredding of paper will be carried out to various degrees at different depots. Waste paper processing and security shredding at Tipton and Barking, waste paper at Oxford and Swindon and security shredding alone at Reading and Brighton. The security shredding is an important part of the business. Mr Dumpleton explains: "We are very pleased to have one of the largest security shredding site in London and we have a significant portfolio of lawyers and blue chip companies."

Dwarfed

The UK paper operation is dwarfed in terms of the paper recycling carried out on a European scale by SITA. Mr Dumpleton points to the company overall in Europe handling close to four million tonnes a year of paper. "The centralising of volumes gives us better recognition in the marketplace because when we are talking to paper mills with one voice we are better placed to negotiate on price and to respond to market conditions."

The precise targets for growing SITA's UK paper recycling business are not being revealed. The company confirms that in Germany and France it has targeted 20% of the market. Says Mr Dumpleton: "This gives us a voice but means we are not over exposed. With natural growth we will grow to that size in the UK. Here one million tonnes equals 20% but this is not our target. in the UK we have not set ourselves such a target target, but yes we do want to get bigger."

He explains that profitability is the main issue. "We have to give shareholders confidence to invest in the business further. Additional volume with consistent profitability and good budget performance will help open up investment."

As for the future, Mr Dumpleton says that this is going to involve developing a national infrastructure service — which will see the introduction of baling and other recycling facilities "We have many sites with waste management licences, landfill sites and elsewhere. Where it makes sense to develop a recycling infrastructure we will do that but we are likely to do it at the point of natural arising."

This expansion of facilities ties in with SITA's view that waste management in the future is going to be much more about source segregation, particularly in the commercial and industrial sector. Mr Dumpleton explains: "Light materials, plastic and card don't travel far, you can't afford to move five tonnes of cardboard 100 miles."

This network of facilities will also help SITA with its service provision. "SITA has seen a tremendous growth in national accounts and we have got to have the infrastructure to meet customers geographic requirements," he notes

The plastics side of the business sees the bulk of SITA's recycling coming from material arising in the commercial and industrial sector. The local authority side, says Mr Dumpleton, is not so easy although SITA is probably the largest collector of bottles, taking in about 3,000 tonnes a year. "The nuts and bolts are that there are not many local authorities that can afford it. Landfill tax and the National waste Strategy targets are both weight driven and public demand is often not sufficient to encourage an authority to invest in the significant cost of bottle recycling.. "

As for the future, Mr Dumpleton says: "There is a real desire to increase recycling by the government, our customers and the public. At SITA we intend to develop our facilities and operations even further to meet the rising demand for greater recycling."