The challenging markets in which businesses in our sector operate have again been painfully obvious recently.
As we have reported, Suez UK has been forced to close its Nordic Recycling division barely a year after buying it.
The sums cannot have added up, and it must have been additionally galling for Suez when the local authority publicly sets out in detail the normally confidential details of its contract - and how much Bywaters was paying to take it on. On reputational grounds alone, it cannot have been easy for Suez to let Nordic go, but these are not easy times.
Equally dispiriting was the bleak public statement from Premier, fund manager for the New Earth group, over the serious underperformance of the energy-from-waste plant at its Avonmouth complex and the likely break-up of the group. Premier warns that “the terms of any sale are unfortunately likely to be unfavourable for shareholders”.
Phrases such as “performance consistently well short of targeted levels”, “higher than expected costs” and a need for “further essential and significant capital expenditure” are classic symptoms of problems encountered in this sector.
So it is certainly not a helpful time for a series of policy decisions which threaten to slow progress to more energy from renewable sources. The immediate removal of Levy Exemption Certificates in the Budget prompted an exasperated Veolia director Richard Kirkman to complain on BBC Radio 4’s Today programme: “This isn’t a way to run a Government.”
There has been a rush of these crunched gear changes since the election. It makes one wonder if they would have happened much earlier under the coalition Government if the Lib Dems had not been reining back their Tory partners. Perhaps ministers Dan Rogerson, Ed Davey et al deserve more credit?
Despite all this gloom, JCB’s remarkable manufacturing facilities in Rocester, Staffordshire (below), are an excellent counterpoint. The company is keen to extend its already considerable presence in the waste sector and, last week, I joined a media tour of its eye-opening operation which employs more than 5,000 people in the UK.
It was interesting to see work underway into a new waste equipment demonstration area in a former quarry nearby. It’s a shining example of British expertise.