A group of waste management company directors and managers visited Germany last month to see themselves how the Rethmann Group, the country’s largest waste management company is operating in a range of sectors and developing the concept of a circular economy. Steve Eminton joined the group and found a business with aims for overseas growth and views that have a strong relevance to the UK.
The scope and extent of Germany’s huge privately-owned Rethmann Group which owns the Remondis waste management company is vast. From producing all types of recyclables, through to being a strong player in animal byproducts, the group is dedicated to maximising use of resources.
Founded in 1934, Remondis expanded rapidly in the 1990s which also saw it takeover the Lippewerke facility in Lunen which is now Europe’s largest waste management site, or as Remondis prefers it to be known, “the largest centre for industrial circular-flow economy in Europe”.
Today Norbert Rethmann is the honorary chairman of the supervisory board of the Rethmann Group. His father, Josef, acquired a small haulage business in Selm, in the Dortmund area, back in 1934 at a time when the main work of the waste industry was the collection of ash. In 1959 the company won a “dust-free waste collection” contract for the local authority and that work was to be the foundation for today’s business.
The Rethmann Group is today split into three operating companies: Remondis with a turnover in 2012 of 6.8 billion Euros; Rhenus, a logistics business, had a turnover of 4 billion Euros; and SARIA, a renewable energy and animal byproducts business turned over 1.2 billion Euros. This gives a total turnover for the group last year of 12 billion Euros with employee numbers at about 60,000. Still, the company has maintained its traditional character. The headquarters of its three divisions are all still in the Dortmund area, for example. Remondis is seated in Lnen, Rhenus in Holzwickede next to the airport, and Saria in Selm.
Remondis is today found across the globe, operating in a wide range of sectors under its own name and under a variety of brand names. And, the German giant is an example to learn from for the UK, the company is promoting the concept of a “circular economy” to the fullest extent.
Not only is the practical side of the company’s activities an area upon which UK businesses might draw for ideas, the words of its honorary chairman Norbert Rethmann, are not to be taken lightly. He is the pioneer of the company and with its worldwide reach and strength in the German waste market, there are few, if any, in Europe who can know quite so much about recycling and waste and resource management.
Mr Rethmann recently hosted a visit by senior members of the UK waste management industry who had the opportunity to see for themselves the capacity of Remondis to treat waste rather than see it disposed of.
They also heard about the company’s two other divisions, one in logistics and the other in organics waste treatment. And they learnt that Norbert Rethmann has passed ownership of the business equally to his four sons: Klemens, Ludger, Georg and Martin.
Among Mr Rethmann’s clear view and he has the ear of Germany’s environment minister are that the UK should not be going down the route of new tech- nologies such as gasification and pyrolysis, should not build energy from waste capacity unless feedstock is guaranteed in the long term and that every effort should be made to capture all material for use as a resource. The latter represents a true approach to a circular economy and Mr Rethmann claims that his company’s advantage is that it went early down the recycling route.
Rhenus, which takes its name from the Latin word for the Rhine river, is an international business with a number of depots in the UK and and the total number of employees is 24,000. It was acquired to the level of 90% in 1998 by the Rethmann Group because it was Germany’s largest glass recycler and while bringing glass to the business for reprocessing, it also now provides a vast logistics network that can also handle waste and recycling materials for the waste division.
BMW uses Rhenus to export its cars to the UK and it has regional hubs in Basildon, Bradford, Cannock and Manchester. On the management side, Rhenus is described as “very decentralised”, which appears to be a feature of the businesses across the Rethmann Group.
Remondis, which is branded in white capital letters on a red background, is the major force within the business although going forward, Mr Rethmann expects to see more growth coming from Saria’s activities as this market offers more potential for expansion.Remondis is the largest company in the German waste and resources and water sector. It operates in the commercial sector and on PPP, public private partnerships, with municipalities usually at a 49% level so as to avoid complete responsibility under the contracts, if for example, tonnage shortfalls occur. While it has an international base, its flagship facility is the giant waste treatment and recycling centre in Lunen just to the north of Dortmund.
The Lippewerke facility at Lunen covers 230 hectares and was previously home to an aluminium manufacturing plant plant with a former E.ON power plant alongside.
Mr Rethmann remarked: “No-one wanted a waste facility but this was a 230 hectare manufacturing site. We took on the former workforce and have created many jobs.”
A startling 1.5 million tonnes of input material is recycled here in Lunen every year which “has to leave the plant as secondary raw material.”
There is an emphasis on high quality for all the material produced ranging from waste paper through to scrap metal and plastics.
The company has been very active for a long time in waste electrical and electronic equipment (WEEE) recycling at Lunen. It has treatment plants in Poland, France, Austria and the north and south of Germany with Mr Rethmann emphasising: you have to do more than shredding, chemical procedures and processes are needed.
Waste electrical and electronic items are handled on a large scale at the site. Remondis operates within Germany’s WEEE system and receives material from civic amenity sites and registered suppliers, such as for used white goods.
Citizens bring WEEE to CA sites and this is stored in five categories. Sites raise an order for collection to AAEAR the company in between the sites and the producers.
The producer has to give a monthly forecast and will be allocated material and then have 45 days to arrange the collection of the container. Large volumes are taken to Remondis and at the Lunen site material is processed in a range of ways and data is captured to ensure proof of recycling. A manual process is used to take the fridges apart ahead of full depollution while on the small WEEE, line batteries and circuit boards are removed.
In German households there is usually a yellow bin for recyclables. Mr Rethmann considers that this is a difficult fraction because it is not homogenous. He cautions that because of this, he is not in favour of recycling municipally sourced material at a very low level. In particular, he is referring to plastics from the domestic stream and explains that Remondis is trying to focus on recycling of plastics from industry rather than from household waste.
“Plastics recycling,” says Mr Rethmann, “can be difficult because the material is very heterogenous. We have to be very careful about plastics recycling. We have problems taking them out and producing the material and the pressure is there to recycle more plastics. This is wrong, you cannot recycle every container and with incineration of them it generates electricity.”
Local managers at Lunen say they “feel like an entrepreneur inside the enterprise. Somehow we feel independent in what we do.”
This independence puts the pressure on but also appears to bring results and is presumably essential to running such a number of large operations on one site.
Mr Rethmann is proud of the success of Lunen. “We have grown production by 50% over the last seven years by investing in this site. Everything is centralised here.”
And it certainly is. Some of the hazardous waste material received at the company’s hazardous waste depot on Merseyside in the UK is sent to Lunen for processing and the material is a significant part of its activities. The site has the biggest hazardous waste incinerator in North Rhine Westphalia with a capacity of 140,000 tonnes per annum and Remondis also has its own landfill for hazardous material.
However, emphasis is put on finding secondary uses for the materials. For example, the majority of alkalines processed and treated result in a synthetic mineral, known as Casul, which can be used to create a white colour.
The site receives materials under contracts for waste and recycling services for 800,000 inhabitants and material comes in also from the private sector and the company’s competitors.
A notable feature is a 140,000 tonne biomass incinerator which has had a new flue gas device fitted. It has not always proved profitable and is a joint venture between Remondis and Steag producing electricity and heat.
One difficulty is that it has to compete for material with power plants in Holland which receive a higher subsidy at 83.3 + 140 Euros per MW hour compared to 83 in Germany.
This creates what the company describes as a “fight between the Netherlands and Germany because the Netherlands are so close.”
Wood can command a price of 10-15 Euros per tonne and the wood price is seen as key to being able to achieve break even.
Science is evident at Lunen with a large well-equipped laboratory building. Mr Rethmann explains: “For security we take a sample from each hazardous waste sample and people here define whether the waste can be recovered or disposed of. A customer that wants to send us material has to accept us to have this analysis.
“All our secondary raw materials and fuels are analysed here before going out. We know that one day it will come back again and we don’t want any problems.”
The activities of the group on the biowaste organics side of the circular economy appear to excite Mr Rethmann even more than the tradtional side of the business.
He explains that it is a very important sector and that legislation has changed across Europe to require, in Germany the recovery of animal waste, and in France for example of food waste.
Today, through sister company SARIA business the group has “the leading European position in this sector with 137 sites in 12 countries.”
Mr Rethmann says: “There has been an important change, before when we talked about the disposal of animals there were only two products, fats and proteins. We have managed in the last couple of years to treat a wider range of materials.
“The company targets categories 2 and 3 material for added value. Category 1 material, which sees a public responsibility for perished animals and which the company disposes of on behalf of the public sector, cannot come back into use other than as energy, for example as a combustible or biodiesel. After processing, category 2 materials are used as fertiliser, for example, and only category 3 material can be used as an ingredient for pet food.”
“My vision”, adds Mr Rethmann, “is that the principles that apply to SARIA will apply to the waste sector as well.”
He cites the production of Heparin, made from the small intestines of pigs which is a separate activity carried out for the group in Spain. The intestines are collected right after slaughtering in the slaughterhouses. They are food-grade material. The heparin is extracted afterwards and the intestines are cleaned, weighed and sold to sausage producers in the food chain.
Another target area is fish waste, 50% is wasted, he says. “This stream is so interesting, from salmon waste we can make pure salmon oil. Salmon oil costs 3,000 Euros a tonne, so it is worthwhile specialising.”
He continues: “From fish and meat we have two million tonnes of residues per year. England is for us a very important outlet concerning one particular product, lard. So we supply 40,000 tonnes of lard every year to England.”
At Marl SARIA opened a new biogas plant last year. Using commercial food waste the 9.2 million Euro plant consists of two fermenters, one gas storage tank, one fermented substrate store and two CHP unites capable of generating 3.1 MW.
ReFood in Marl, the business division handling food waste, can process up to 88,000 tonnes of food waste each year and the plant is the fifth of its type in Germany. Biodiesel produced is sold under the name Ecomotion, and is 100% organic and renewable. Also produced is a certified fertiliser, which is given to farmers although some pay for the material.
SARIA’s Euromeat and KFU businesses also play their part in the sector.
The ReFood activities are now developing in the UK and Mr Rethmann points to the company’s site at Doncaster, “which has 120,000 tonnes of capacity and runs at 100%.”
There is another one in Widnes and he says that plans for a plant in London are in hand. The ReFood business in the UK developed with the acquisition of PDM, formerly Prosper de Mulder, a rendering business based out of Doncaster. ReFood Uk is owned by SARIA (sister company of Remondis).
While the UK visitors had a wealth of expertise in waste management and recycling, it was clear that there was admiration for the success of the Mr Rethmann and the company. And there was interest in his views on the waste business.
For individual business, there was a clear message of independence for local managers but there was a firm control line to home base. There was also a strategy, he said of keeping losses as short as possible with almost a three month cut-off.
Mr Rethmann also said that the sector should be interested in all kinds of waste management and watch for new waste streams. “We are not afraid of competition because we are self confident in everything we do. There is a huge market in waste and we assume to a large extent that we to have to be close to the customer to have influence on the waste streams. There will always be collection on the one side and treatment on the other.”
But, when questioned about the future, he said that waste management comes back to the circular economy. He said his philosophy for the business “is not a secret at all. In 1977 I have defined corporate guidelines and one principle is that treatment is more important than disposal. That is why we have started very early on recycling in order to minimise residues.
“We are at the very beginning. If you look at Europe as a whole, eastern countries as far as waste treatment is concerned are 20 years disadvantaged. In China one pig has only 60 grammes of waste, in Germany 10-12 kilos.
“We are going more away from the waste business and transferring to a circular economy. Our commercial plants get hazardous and commercial waste but that is decreasing. But recycling is under constant growth and that is why the circular economy is our growth. In 20 years time the circular economy will be as important as the chemical or automotive sector.”
On the municipal side, Mr Rethmann is cautious about tying up local authority contracts. He claims that for household waste – there is a remunicipalisation taking place in Germany. “This is really a public task. This is really simply from my point of view the job of transporting waste from one place to another. Can’t do much for this as there is political will so that’s why we want to do more on recycling.”
He also foresees a reduction in demand for energy from waste incinerators.
The outlook for Remondis is clear: overseas expansion. As the honorary chairman says, waste management firms in the German market have seen big losses, there is overcapacity in treatment from composting plants through to incinerators and the market for household collected material is 25% less that it was.
In the future, he predicts “growth will be outside Germany. We invest every year 800 million Euros and they don’t go into Germany, they go abroad.”