The board of the Network agreed on Wednesday to the plan, which will see full FRN members around the country being taken on as sub-contractors.
” We are not trying to establish a cartel. This is about raising the amount of items being re-used. “
– Paul Smith, FRN
A shell company – FRN Enterprises Ltd – has already been set up to broker national deals for furniture and waste electrical and electronic equipment (WEEE) re-use. FRN members are to be invited to join the scheme next month.
Hopes are that the 250,000 electrical items and 1.5 million furniture items being reused by FRN's 300 member groups will more than double in the next three years under the new trading company.
Contracts
Paul Smith, FRN chief executive, told letsrecycle.com that the Network is already talking to retailers, manufacturers and compliance schemes concerning possible contracts.
He said he hoped that trading by the new company could begin by Christmas.
Mr Smith explained: “For some time we have been putting companies in touch with our members working both regionally and nationally, but now we have decided to take a more formal approach – particularly with the WEEE Directive expected soon.”
Mr Smith said the set up costs for the project overall had been about 50,000 – mainly for obtaining required legal advice – and this has been partly assisted by a 15,000 grant from Defra's Waste Implementation Programme.
Competition
Written legal advice obtained by FRN particularly details the new scheme with relation to competition and monopoly laws. This was particularly important, Mr Smith said, if some of the Network's larger members like Bristol-based SOFA project and Liverpool-based Furniture Resource Centre were to become involved.
“We have extensive legal advice into the competition laws,” he said. “We are clear within our legal advice what we can and cannot do – we are not trying to establish a cartel. This is about raising the amount of items being re-used, not about reducing competition.”
The FRN chief executive said the new company would end up working in competition with some community-sector re-use groups. But, commenting on the large London-based group Green-Works, which specialises in office furniture, he said “most of our members do not deal with office furniture, so we are talking with Green-Works about that”.
Mr Smith said he believed the new company would allow the number of WEEE items re-used by FRN members to rise from 250,000 to over one million in the next few years.
He added that the 1.5 million to 1.75 million items of furniture being re-distributed to low-income homes by members could double.
Costs
For those re-use groups that do join the scheme, minimum standards will have to be reached for capacity, re-use work and management as well as meeting all legal requirements.
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Subscription fees varying from 125 to 275 will be required to cover the inspection and accreditation of their operations, which is likely to be undertaken during the autumn.
Groups awarded sub-contracts would then pay 50p per item re-used back to FRN, and 50p per tonne for those contracts including transportation costs.
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