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A leap over the financial hurdles

Daniel Bailey

Managing the effective dis­posal of industrial materials is a constantly evolving chal­lenge, both to the planet and to technology.

The speed of technological change currently provides the greatest hope for meeting these twin challenges. The recycling industry is increas­ingly able to process not just a wider range of industrial materials, but is also finding new and more efficient uses for the materials that emerge at the end of the recycling pro­cess.

Technological progress also means greater efficiency throughout the recycling pro­cess – and thus lower costs.

UK Waste Investments

£1.9bn total investments in 2017

£4.4bn expected in 2020

£18.6bn total value of projects

£70.7m average worth of a project

Source: AcuComm

Chemical recycling is one technique to emerge recently which offers a compelling business case. It works with a wide variety of plastics and polymers, breaking them down into high-value synthetic oils that can be used to remanufacture products.

Fortunately Britain’s finan­cial sector is increasingly step­ping up to help small and medium-sized recycling busi­nesses to keep pace. One way it has done so is through the rapid growth of asset finance – loans which are secured against the asset they are being used to fund.

Today, terms can be struc­tured to suit the seasonal cashflow fluctuations and provide more than the ability to acquire the asset.

And by being secured against an asset – such as a baler or a sorter – such loans can provide accessible finance to companies leaving bank finance free to satisfy other requirements.

While asset finance for the recycling industry remains a specialist field, its steady growth is helping to lower the financial hurdles that have until now held back the uni­versal adoption of the latest recycling technology.

Official statistics from Defra show how much is at stake. Across the UK, recycling rates are stagnating and there is a real chance that England, Scotland and Northern Ire­land could all fail to meet the national target of a 50% recy­cling rate by 2020.

Critics of the Government’s 25-year Environment Plan accuse its timeframe of lacking ambition, and there is a grow­ing sense in the recycling industry that more needs to be done, and more quickly.

The winning combination of improving technology and bet­ter access to the specialist finance needed to fund it, offers the industry a rare opportunity to drive the envi­ronmental changes that the country and the planet need.

Daniel Bailey is managing director at Arkle Finance

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