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Shanks knocked by falling commodity prices

Waste management group Shanks has been hit by falling commodity prices but hopes to be in good shape when the inevitable recovery comes.

Speaking to MRW Shanks managing director Ian Goodfellow said: From late October and November prices plummeted for materials but prices have begun to recover now. Today, we can now find a home for cardboard at pre-plummet prices. It is too early to say that we are back on the road to recovery because the concern is still there.

With ferrous materials and the situation with Corus, the domestic market for ferrous is almost non existent but we are still able to export it.

We hope the market will recover in the next three or four months but not to the levels we enjoyed two or three years ago.

In its Interim Management Statement (3 February) Shanks said that its Belgian and Dutch
businesses were performing well helping overall year on year sales grow by 5.6% in the months to December 2008. But the UK has suffered an economic downturn quicker than elsewhere.

It plans to cut an estimated 55 jobs which will save £2 million but necessitate a £1.5m restructuring charge.

Goodfellow said that the firm plans to find the right sort of material to get quality inputs and quality outputs. Last year, November and December were a tough time for everybody. But when you fall over quickly you also get up as well.

The banks are still finalising their financial due diligence on the Shanks PFI waste contract with Cumbria County Council and the firm hopes that it will be sealed at the end of the financial year.
Goodfellow said: We are cautiously confident and we believe the worst is behind us. We will be in good shape when the inevitable recovery comes.

Image: Shanks recovered fuel lorry

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