9 January 2009

Waste firms respond to “misleading” media coverage

Two of the UK's most prominent waste management companies and the Environmental Services Association have all issued statements on the state of the recovered materials market in the wake of “misleading” media coverage.

French-owned Veolia Environmental Services has claimed that it is not significantly exposed to change in demand from reprocessors for recovered materials despite images being printed of its Rainham materials recycling facility (MRF) as part of a Mail on Sunday story entitled “Recycling Fiasco”.

The 'stockpile' of material photographed by the 'Mail on Sunday' at Rainham relates to mixed paper which requires further reprocessing in order to meet the quality requirements of end-users

 
Paul Levett, deputy chief executive, Veolia ES

Further shots of the facility were featured in a BBC News story on alleged stockpiling of materials, shown last night (January 8).

And, Taunton-based Viridor Waste Management has claimed that demand for materials has started to recover as Asia resumes more normal trading activity following the Christmas period.

Tax-payers

According to the Mail on Sunday story, council tax payers were facing a multi-million pound bill to store 100,000 tonnes of waste paper and card due to the downturn in markets for the material (see letsrecycle.com story).

Commenting on the use of the Rainham facility in the Mail on Sunday's story, Veolia's deputy chief executive, Paul Levett said: “The 'stockpile' of material photographed by the 'Mail on Sunday' at Rainham relates to mixed paper which requires further reprocessing in order to meet the quality requirements of end-users.

“It will be reprocessed as soon as capacity becomes available,” he added.

Mr Levett acknowledged that, in the “specific economic environment”, Veolia had extended storage capacity at its MRFs and would, if necessary, develop further “contingency measures” in response to future market changes.

But, he stressed that the company had still been able to find markets for materials that passed through its facilities.

“We have in place a wide and established reprocessor network that we continue to supply on a regular basis,” Mr Levett said. “Therefore we are not significantly exposed to any change in demand from individual reprocessors and continue to be able to place our output product in the market.

“Neither landfill nor incineration has ever been considered by us,” he added.

Viridor

Further comment on the market situation came from Viridor, which claimed that since the “dramatic fall” in commodity prices in October and early November 2008, markets had stabilised.

The positive fundamentals of global demand for quality recyclate materials and the resource management industry remain in place

 
John Viviani, managing director, Viridor Waste Management

This echoes industry surveys conducted by WRAP, the Local Government Association and the Environment Agency in the lead-up to Christmas, which suggested that prices for materials were less volatile (see letsrecycle.com story).

In a statement, the company said and there had been some early positive signs of price recovery in most materials during December and January, albeit at much lower prices than those enjoyed for most of 2008.

The company added that while the economic downturn was set to be prolonged, reduced consumption was likely to be reflected in lower recyclate arisings, which it claimed would help to redress the balance between supply and manufacturing demand.

And it cited the fact that its specialist marketing company, Viridor Resource Management, had developed a strategy to market its 1.5 million tonnes of recyclate a year.

John Viviani, the managing director of Viridor Resource Management, said: “Viridor's established marketing strategy and end-market relationship have ensured market access continues and stock building has not been necessary”.

However, Mr Viviani pointed to the need for higher gate fees, commenting that in current conditions these “cannot be offset by material sales revenue”.

Demand

And, both firms expressed confidence that markets would continue to recover, with Mr Levett saying that: “We do not expect the current market conditions to be maintained and we expect there to be a strong demand for recyclable materials in the medium to long term.

“Irrespective of market conditions, we will continue to comply fully with our contractual obligations to our local authority customers,” he added.

His belief in long-term stability was echoed by Mr Viviani, who said: “The positive fundamentals of global demand for quality recyclate materials and the resource management industry remain in place, demonstrated by the stability that has returned to the market in recent weeks.”

ESA 

Alongside comments from Viridor and Veolia, the Environmental Services Association – which is the trade association for the waste industry – accused political leaders of not talking enough with the waste sector.

ESA's Chief Executive, Dirk Hazell said:”Our Members report that, despite the slowdown in global economic activity and lower prices for collected materials such as paper and plastics, markets appear to be stabilising and shipments are continuing to British and overseas recycling reprocessors. It is not unusual to see pauses in trading activity over Christmas period and before the Chinese New Year but our Members report that stockpiling has been the exception, not the norm.”

“Economically competitive and environmentally sustainable recycling is a modern British success story, with collections at their highest ever levels and set to rise. While markets go up and down, recycling is here to stay and Britain must sustain its upward trajectory.”

Reflecting on recent press coverage, Mr Hazell concluded: “Our industry is doing its job in challenging global market conditions. To support present and future recycling and the valuable environmental job our sector is doing, we hope political leaders will in future first talk to rather than simply about us”.

 

 

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