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Investment in waste: Craig Shaw, Advetec Holdings

Following the recession, we find that return on investment (ROI) is only part of the reason companies consider investing in our waste management solutions.

The other factors include the actual speed of installation from concept to completion, the time that planning and approvals takes, the potential downtime and productivity changes while any new plant is being built.

Other crucial elements we see are worries about security of continuity and whether this will affect earnings potential within the scope of the existing business although our technology could perhaps lead to an expanded business, diversification or even investment in new equipment. 

We find that direct cost saving or income earning investments that are more successful when applying for funding are those that ‘tick’ multiple boxes, such as with our Raptor and Bio-reactor, because this equipment achieves a faster return on investment than those that tick only a few boxes, (typically three to five years).

Savings or earnings are achieved through vast reduction or even elimination of landfill fees, transport costs and storage costs. As our process turns over 80% of sewage sludge and municipal waste into a dry powder and relatively clean water (which easily complies with ‘grey water’ descriptions or can be allowed to go to drain without the large fees attached to more dirty water,) it’s easy to achieve cost justification.

Similarly, because customers have found the Advetec Bio-reactor achieves strong results in reducing organic matter in liquids; cutting transport, storage, water purchase costs and discharge fees this again helps with cost justification. Sometimes a new investment in an existing business is just to make efficiency improvements.

Exactly the same core funding rules apply to this type of investment in our technology as they would to a piece of new process equipment such as the Raptor.  A ‘local’ situation has shown a need that is waiting to be satisfied. Since our technology is unique it means customers can be confident that there will be no competition, so ROI is secure.

If waste management solutions have multiple benefits attached to the correct equipment being used in the right situation, we can also demonstrate indirect benefits.

These include improvements to company image, reduced environmental impact from the core processes of the organic waste producing business, less land being used through reduced storage costs and, very importantly, getting ever closer to maximization of recycling within a given business. In addition, in certain situations, if the plant being suggested allows existing equipment to run more freely, this can also reduce maintenance costs and sometimes down-time, giving more fuel to the investment argument.

Funding success is governed by risk reduction. If you spread those risks by demonstrating flexibility within the business plan, you can reduce dependence on matters outside of your control. Justification of a business plan should always be easy. A good business plan with multiple income ‘sources’ and security of continuity is more easily funded.

Craig Shaw, chief executive, Advetec Holdings

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