Now is not the time to lose sight of the recycling agenda and material prices will bounce back again next year, claims Shanks UK managing director.
Speaking to MRW Shanks UK managing director Ian Goodfellow said: As an industry we were not prepared for the sudden downturn in material prices. But we [Shanks] have been fortunate that we have long term contracts, partly based on private finance initiative contracts, and long term relationships with our contractors to ensure that they get material stored and out. We have no intention of stockpiling.
We are still very committed to recycling and we have plans to build a new facility in Glasgow next year. We are all feeling the downturn and it is severe but I believe it will be relatively short term.
We expect to see some material price recovery in the latter part of next year.
Shanks recently partnered with energy company Scottish and Southern Energy to bid for three Private Finance Initiative (PFI)-funded waste contracts in Yorkshire. Goodfellow said that Shanks will continue to search for opportunities in the business and go from strength to strength.
Goodfellow also said that Shanks was still taking in the same quantity of materials and had stable end markets for them but may have to find interim storage for ferrous materials.
He said: But this is all part of the cycle of business life and you get through it eventually at the other end.
Undoubtedly this will affect our finance from recyclates but it will not affect our overall performance.
Shanks has contracts with local authorities and collects municipal waste and commercial and industrial waste. The firm also has an 18-year contract with East London Waste Authority to take waste from four east London boroughs.
Goodfellow praised the Environment Agency for issuing guidance to companies to ease materials storage concerns (See MRW story, November 12). He said: This is a very good positive good reaction from the EA who have responded quickly to the problem.
He said that companies should avoid the temptation to landfill recyclables and store their materials for reprocessing if they need to.
As well as operations in the UK, Shanks has businesses in Holland and Belgium, Goodfellow said that the firm was very robust here in terms of revenue and profit.
I have been in the waste business for a long time and this has happened before. Now is the time not to lose sight of the recycling agenda and to divert materials going to landfill. Our aims will still be to recover good quality materials and deal with the short term challenges.
Previous story, Shanks partners up with Scottish and Southern Energy, (07/11/08)