Viridor chief executive Colin Drummond who is also a main board director of Pennon – which owns South West Water – told letsrecycle.com that the acquisitions of Suffolk Waste and Lavelles are part of the company's strong commitment to the waste sector.
“Our statements have been consistent that waste management is a core business of the Pennon Group. We see waste as a good business and as a value to our shareholders.”
Mr Drummond explained that Viridor was focused in its approach to waste management in choosing to operate in specific segments. “We have never been involved in the municipal collection end which is a very difficult end and will remain so.”
And, he warned that waste management companies can also find commercial and industrial work to be difficult unless they had a high market share. Waste treatment and disposal, which is where we are is different. If you have good facilities, then you can deliver.”
Price rises
In its last annual results published earlier this year, Viridor posted a turnover of 106.1m. Operating margins excluding the impact of landfill tax were 17.7% with total landfill volumes of 3m tonnes and the price per tonne rose by 4%.
Mr Drummond confirmed that Viridor's prices were continuing to go up, rising, rising above inflation. The better prices are to be found in areas where there is a shortage of landfill, especially in southern England. This is reflected in the areas where the company has landfill, including Dorset, Devon, Hampshire, Oxfordshire, East and West Sussex and Suffolk.
The company also has sites at Dunbar in the east of Scotland which takes waste in by rail from Edinburgh as well as in north west England and Derbyshire.
This spread of sites, claimed Mr Drummond, is of benefit to Viridor. “Overall every waste business has a mixture of assets and our geography is one of the best”.
The latest acquisitions, he explained, tie in with the company's current business. The Suffolk one ties in with its activities at Ipswich and Lavelles in Trafford Park will be a feeder for landfill as well as carrying out recycling of aggregates.
Looking ahead, Mr Drummond says the group will continue to be willing “to make acqusitions as long as they make strategic sense and the price is right.”
And, Viridor is now awaiting a decision in 2002 for the East Sussex waste management contract for which it is competing against Onyx. “This,” he said, “is a large contract by any standards.”
Subscribe for free