About 12 months ago, the Enva Group launched a new brand under which all its resources, waste and water services now operate. These included a range of businesses acquired over a number of years which had been operating under their own names.
Chief executive Tom Walsh explains: “Enva is a new brand, but it is associated with businesses that have been around for quite a while. In the past, many constituents of Enva traded under different brands that have significant heritage in the waste industry. This could be either in terms of service footprints such as Wastecycle in the east Midlands and [William] Tracey group in Scotland, or in terms of particular waste niches like our Oakwood Fuels brand, which is the leader in [vehicle] workshop hazardous waste services.
“We seek to be successful in developing equivalent products to those derived from nature. We deliver them from waste material and that is the simple premise: we are producing products into an area of impending scarcity.”
“The Enva brand itself is a derivation of one of the heritage brands, which is the Enva business in the Republic of Ireland, the leading hazardous waste management business in that market.”
Enva handles more than two million tonnes a year of waste materials across 28 facilities in Ireland and the UK and is supported by 1,400 staff. Walsh says that bringing all the different businesses under the same brand was done for “a very particular reason – [because] we have a story to tell [about] what we do in our waste management businesses”.
He adds: “We didn’t feel we could do that through the multiplicity of brands in place at the time. We needed a new vehicle, and we formed one, in which to tell our story and demonstrate what it is that differentiates Enva in the market.”
Acquisitions in the past 18 months
Jan 2018: Blue Sky Plastics, a WEEE plastics-to-regrind/compound business, based in Lincolnshire.
July 2018: GP Green Recycling, a large organic waste composting business based outside Glasgow.
December 2018: Hadfield Wood Recyclers, a waste wood to products and energy business, with sites in Tilbury, Manchester and Middlesbrough.
Jan 2019: Bio Industries, based in Dublin, which develops organic waste water treatment solutions. These include micro-organisms that can enhance AD plant performance.
Jan 2019: Rilta, an Irish hazardous waste business, which included glass and fridge recycling.
What is now Enva was originally the environmental services division of Ireland-based DCC. Walsh explains: “As the smallest division in DCC at the time, it was perhaps somewhat inevitable, particularly given the rapid growth of its energy distribution businesses, that at some point we would become – to use the awful term – ‘non-core’ and would exit the business.
“That came about in June 2017, having gone through quite a thorough process to find the next new investment partner for the business.”
The business was sold to a group of shareholders, now majority owned by London-based private equity company Exponent. Walsh says that its two years of private equity ownership so far has been a positive experience.
“We have a major shareholder that is committed to our vision of what we think the business can be,” he says. “We now operate in an environment in which decision-making is quick and decisive. Some people have [certain impressions] of private equity, but for us it is simply a different form of capital structure that allows us to get on with growing and developing the business.
“That whole process [of preparing for sale] was quite interesting. I don’t think there are many, or any, businesses that go through a process of self-examination and examination by others in which they don’t actually form some new insights in relation to what the business is and what makes it tick.”
This made Enva realise that it excelled in resource recovery – creating resources from waste – but its previous structure of different brands and business units meant that it could not connect the strong areas of synergy and expertise within the wider group.
Walsh explains: “That structure had its advantages. We had groups of people who were very close to their markets, responsive to their customers and focused on the particular job and market opportunity at hand. But it also [meant that] it became very difficult to take the broader view of what we were doing, to connect the business and focus on the aspects we were good at”.
Establishing position in niche markets
Enva currently has a portfolio of specific waste materials which it focuses on. Walsh says it has chosen to establish positions in niche waste materials where it believes it can add value “right along the waste chain”, and take a waste back into a new product as a replacement for virgin material.
The company has a strong position in contaminated soil and remediation, particularly in Ireland and to a lesser extent Scotland: “Contaminated soil is a very buoyant market in Ireland at the moment because of the amount of development that is going on, particularly in old port and industrial areas.” It also has a longstanding position in waste wood, from which it creates a variety of products, enhanced through the recent acquisition of Hadfield.
Waste plastic is another area of focus, in particular those derived from waste electrical and electronic equipment (WEEE), through the acquisition of Blue Sky Plastics. It recently expanded its position in WEEE by buying Rilta, which means it now operates the only fridge recycling plant on the island of Ireland. There is now the opportunity for what was the Rilta operation to feed material to the former Blue Sky.
It also has expertise in treating and recovering waste oils of various varieties and is the largest collector of waste oils in Ireland and the UK.
Organic waste is another area in which Enva is strong, both in Ireland and Scotland, and this includes composting operations as well as creating fertilisers from waste water treatment plant sludges. Hazardous wastes and pharmachem wastes are also part of its portfolio.
It has a growing position in glass recycling, traditionally in Scotland, but it now also operates one of the two waste glass-to-cullet recovery plants on the island of Ireland. It also has solid recovered fuel production and plasterboard recycling skills.
Walsh points out that the company does not operate merchant facilities that simply attract material from other waste firms into those recovery solutions. It also has front-end customer markets, such as significant trade waste businesses in the east Midlands and Scotland. In Ireland it has particular expertise in aspects of industrial services such as tank cleaning and decontamination. Its feedstock is therefore a mixture from its own collection activities and from other waste companies looking for particular solutions.
Slightly to the side of its conventional waste business, it has expertise in water and waste water treatment and support services.
“The key to keeping what is quite a complex organisational structure together is really our people,” says Walsh. “It requires skilled managers and technical people, and needs commercial leaders to keep that complexity working and moving in the right direction. It is really at the core of what we do – our ability to attract, develop and retain good people.”
He explains that many of Enva’s managers operate across the commercial and technical fields, and the business has found this to be the ideal skillset.
The company has and still is in the process of rolling out investment into information and communication technologies, to help with connecting the entire business operation, moving away from “the old standalone silos that existed within the businesses to making sure that knowledge and capability that exists in one part can be deployed in another”. Walsh also wants to ensure “that we are properly connected with our customer base, and that we are speaking to them in formats they expect in this day and age”. Its investment has allowed the company to communicate its strategy and vision to all its staff.
Walsh says: “Our business is based on quite a simple premise: fundamentally, we believe that we all live in a world where many of the resources that support how we live are finite in nature…they are going to increase in cost as there is greater competition for what is there.
“What we seek to do, where we seek to be successful and make our investments is in developing equivalent products to those derived from nature. We seek to deliver those from waste material and that is the simple premise: we are producing products into an area of impending scarcity.”
Walsh explains that, during the past couple of decades, the gap has narrowed between the quality, reliability and functionality of recovered materials and virgin materials and, as that gap narrows, it is reflected in price. In recent years, further value in recovered or recycled content has appeared as brands actively state ambitions to substitute virgin with recycled material. Some of the fuels produced by Enva are worth more than their virgin equivalents because of specific attributes, such as being low-sulphur, for which there is particular demand.
But a challenge to the business will be its ability to navigate the regulatory landscapes “in order to allow us to be as progressive as we want to be in creating second lives for waste material”.
Enva operates under the jurisdiction of principally three waste regulatory authorities: the Environment Agency, the Scottish Environment Protection Agency and the Environmental Protection Agency in Ireland. Walsh says: “We have great respect for the work these agencies do, and we are very conscious that they have got onerous responsibilities in terms of environmental protection.
“Sometimes we feel that another of the responsibilities – the promotion of positive outcomes for waste material through use of the end-of-waste mechanisms – does not get sufficient priority. It can tend to conflict with the whole area of risk in terms of environmental protection. And, in general terms, we believe that the waste sector will be better served by a rebalancing of those two.”
Walsh explains that “if the regulatory authorities are more willing to engage in some risk-taking” in recognition of the potential benefits in creating new materials from waste, there could be more innovation in the sector.
“I think we are being stymied in getting behind the initiative of doing the best we can with waste materials,” he comments.
Walsh says that Enva has three materials that are in the end-of-waste pipeline: “To be frank, we will be more comfortable and the environment would be better served if the mechanisms that allow us to progress those [materials] were clearer, more efficient and quicker.” This can be frustrating for the business and could be a barrier to others from “being progressive” with waste materials.
“If there were a different mindset, if the pull-through of material into end-of-waste almost became a key performance indicator for the industry and for regulators, then we all line up behind a greater emphasis on taking material down that road and you would unleash quite a lot of latent innovation in the industry.”
Brexit is another issue, and Walsh says that customer enquiries into its preparedness spiked at the turn of the year. As it has operations in the Irish Republic and the UK, Enva moves a fair amount of material between the UK and EU and vice versa. But Walsh says the business is comfortable that it has broadly dealt with issues on transfrontier shipment rules and EU regulations on chemical substances because unilateral agreements have been reached between the UK and other European member states on allowing permissions to continue after Brexit.
“When we move away from waste-specific issues, we have the same concerns as everybody else, such as logistics, capacity and backlogs. But we are able to manage for a specific period of time through use of managing inventory.”
On the potential impact of losing its EU workforce, he says this has been something the company has been living with for a number of years, particularly in the east Midlands: “And what we have seen, what everyone else has seen, has not been a cliff edge in the past two years, with people deciding to go home, but a gradual tightening of labour markets for operatives and drivers.”
Attracting and retaining people is a broader challenge. “The journey we are going on in terms of resource recovery relies on technical expertise to a greater degree than typically exists within the waste industry,” says Walsh. “We are challenged in terms of articulating to those potential candidates that we are a space that is worthy of their career aspirations because, in the past, that would not necessarily have been the case within the waste industry.”
“Slightly to the side of its conventional waste business, Enva has expertise in water and waste water treatment and support services.”
The company’s rebranding and messaging should all help to make it an appealing employer to work for, but Walsh foresees it will continue to be a challenge to attract the best people, particularly with its preferred combination of technical and commercial skills. He adds that there is a clear alignment between environmental objectives and commercial benefits, and that its activities need to make commercial sense for the business to reinvest in people and operations.
On a personal note, Walsh says it is environmental factors which drive him: “I am passionate about the environment and about the [problem] that hangs over us all: the growth in population and the cap in resources is a wedge that is coming at us quite quickly.
“I am lucky to have found a career and a role that allows me, in a small way, to have a role in helping to deal with and unlock some of these issues. Recovery of waste materials alone is not the answer, but it is necessary if we are going to buy ourselves time to deal with the issue.”
About Tom Walsh
The chief executive of Enva has led and been with the business and its previous owner DCC since 2011. Before that he ran AES/BnM, one of Ireland’s largest waste management businesses. He has vast experience in the logistics sector in the UK and Europe, having previously held senior management roles in Exel and DHL. He has a finance background and qualified as a chartered accountant earlier in his career.
Walsh on acquisitions
“We have been busy on the acquisition front in the past 18 months, with a very particular theme for them. You will have noticed that we haven’t been involved in acquisitions that grow our trade waste business, for example.
“But we have been active in acquisitions that either complement and bring more capabilities to our existing materials recovery operation or bring us into new materials, where acquisition is a faster and more effective route for us to develop a portfolio.
“In relation to the first of those, Hadfield is a very good example. Within the Enva group, for a very long time we have had an active wood recovery business – that is not widely known because it is sat under the old, heritage brands. We saw with Hadfield the opportunity of getting better at not just collecting more wood but at producing value-add products from both our own and Hadfield’s wood stream.
“Where we acquire an end-to-end waste chain, a good example is Blue Sky Plastics. It is the foremost in the UK for the conversion of plastic residue from the WEEE recycling industry back into quality-assured virgin-equivalent polymer pellets.
“With our acquisitions we are capable of dealing with different scenarios. For example, when we bought the GP Green business in Scotland, the owners had a clear agenda that they wanted to pursue other business interests and we can deal with that. We were capable of putting our arms around that business and integrate it quickly and efficiently into our operations.
“On the other hand, with larger companies like Hadfield, and particularly where the team has the ambition to stay with the business and drive it further, we are also capable of dealing with that in our model. We plug in that type of business in a different way and allow a larger degree of autonomy, but that model works for us as well.”
Walsh on Government intervention
“With all such changes, there is a time and a place for Government intervention. And it tends to be at the point of promoting change. There also needs to be a point at which the limited government resources and schemes need to be sensitive to when they need to move on.
“When they have provided an impetus to particular markets, and where the recycled or recovered product has become the new norm, then those materials tend to find their own way and find their own value.”