A family-owned composting business in eastern Scotland has announced the injection of around £2.2 million in finance from the Business Growth Fund, as it seeks to expand its operation across Scotland.
Keenan Recycling, which is headquartered in New Deer in Aberdeenshire, announced the BGF funding on Monday (September 28), and is seeking to secure a greater volume of business in Scotland’s central belt around Edinburgh and Glasgow.
The company, which is run by entrepreneurs Grant and Gregor Keenan, launched its commercial food waste collection service in Aberdeen and Aberdeenshire in 2010 and now processes around 60,000 tonnes of waste per year.
Keenan operates a 14-acre in-vessel composting facility at New Deer, near Turriff, and recycles food and garden waste from local authorities and businesses into compost for agricultural and horticultural use.
The company also opened a base at Linlithgow – in between Glasgow and Edinburgh – in August 2015 and has invested £700,000 in a fleet of six lorries to roll out its organic waste collection service to customers in the two cities.
Keenan has said that the additional investment from BGF will help to finance the expansion of its services in the area, where the firm is already collecting food waste from more than 600 clients and is on hoping to reach 1,000 businesses within the coming month.
Through the deal, BGF, an independent company providing growth capital for small and mid-sized businesses, will take a minority equity stake in the firm and a seat on the board. The company also invested £7.5m in December 2014 in J&B Recycling, which has two facilities in Hartlepool and a waste transfer station in Middlesbrough (see letsrecycle.com story).
Richard Pugh, investor at BGF, added: “The market backdrop continues to be supportive, with the Scottish Government committed to the tightest recycling targets in the UK, culminating in zero organic waste to landfill by 2021.”
According to Grant Keenan, who established the Keenan Recycling in 2001, much of the company’s growth has been aided by a boost in available food waste feedstock resulting from laws brought in by the Scottish Government in 2014.
The Waste (Scotland) Regulations oblige businesses in non-rural areas producing more than 50kg of food waste per week to present it separately for collection. From January 2016 the law is set to change to include businesses producing over 5kg of food waste per week.
Speaking to letsrecycle.com this month, Mr Keenan said that focus now needed to turn to encouraging suitable quality feedstock is available to produce demand for compost end products.
He said: “Zero Waste Scotland has played its part now, they have got the facilities, they have got the collections, I have no doubt that where they want to be looking now is quality, as an industry we are in danger of ruining it for ourselves because of plastic getting into digestate and going into fields and Zero Waste Scotland maybe needs to look at putting some funding into cleaning up the industry and making sure we do it properly.
“Where the problem is that the market is fragmented at the moment where you’ve got anaerobic digestion plants with no collection services and collection service companies that don’t have processing plants and the collection companies don’t really care what they collect as long as they can get the money for their bin as long as they can dump it on the anaerobic digesters doorstep.
“The problem with them is that they don’t want to push back on the collection company in case they threaten to take it elsewhere and they have basically got a big beast that needs fed. I think there is an opportunity, one thing we are looking at doing is setting up satellite sites to take in material from local authorities and our own collections, de-package it, put it in a tanker and take it to the anaerobic digesters and that way it will be nice clean feedstock and we’ll deal with properly.”