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Credit crunch hits MRF operators

Waste management companies which operate materials recycling facilities (MRFs) are finding it difficult to sell on steel cans, paper and cardboard on to reprocessors.

Barnsley-based waste management company DTS Environmental has just opened a new MRF but director David Thackray told MRW that the collapse in material prices had come at an awful moment for us. He said: We were just in the process of setting up a new service to local businesses taking in their waste paper, with the idea of baling it and sending it on to reprocessors. Before we could start, however, the price paid for paper has fallen through the floor. As such weve had to go back and reevaluate that venture.

We were already sorting out a great deal of cardboard since installing the MRF and, frankly, some reprocessing companies arent even returning our calls when we offer them our baled card. Supply really seems to have exceeded demand in that industry for the moment.

Thackray continued: We are already hearing from potential customers that they can no longer see the point in separating recyclable material such as paper and then paying someone like us to collect it, when they could easily throw everything in with their general waste collected by the local council. This affects the viability and quality of any recyclable products that can be sorted from the commingled waste, further reducing its value to the reprocessing industry and making less desirable alternatives such as incineration and landfill increasingly attractive.

But Thackray said that DTS core business had always been skip hire and demolitions and the firm will be able to sort, store and sell on the waste they get from that part of the business and he was not locked into any long term obligations to take in waste that we dont want.

Waste management company, Holmen Paper recycling manager Charlie Thompson said: The MRF sector is a hard place to be at the moment. There are two key problems. It is difficult to get rid of materials and if you can find an outlet the value of the material in some cases is zero. In the case of plastics and mixed papers the value has fallen to zero. And card if you can get the orders are about £20 per tonne.

On top of that you have to pay for high operational costs and you are not getting the revenue from the sale of materials. Guys will find it very hard.

Thompson said that his company was in a fortunate position in that the Tilbury MRF takes in 50% newspapers and magazines which is then dealt with internally and not sold externally. He said: We have longer term relationships with people [reprocessors] and still have the ability to move material on.

He said that this was not the case with everybody and that this winter will be the survival of the fittest. Thompson said that those MRF operators who do not collect a gate fee to get their revenue from somewhere may face problems over those that collect gate fees from councils because they will make a loss.

He said there could be potential problems if MRF operators start stockpiling their materials and get caught in the Christmas rush, where it is the busiest time of the year for reprocessors. Those who havent got steady outlets over the Christmas period will find have a hard time, added Thompson.

Thackray added: We can only imagine the problems that other waste management companies, that previously made agreements to take in commingled waste for a number of years at fixed prices, are facing.


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