Two major mergers for the recycling and waste industry
 
There have been considerable moves and changes in the recycling and waste markets in the last 3 weeks which could turn the UK provision for these services' upside down.
 
Biffa have purchased the collections arm, processing facilities and industrial and commercial parts of the Viridor UK operation who were owned for many years by the Pennon Group who also own South West Water. In 2020 Viridor was sold to the KKR Group and as of 21/05/2021 has been acquired by Biffa.
 
At the same time Veolia has launched a takeover bid for Suez Recycling and Recovery Limited through a share acquisition.
 
It will take some time for these large-scale purchases to bed themselves in but basically the market has been reduced from 4 national service providers to 2 reducing the tender options, and market options to 2 main players. Yes,there will still be some regional players like B&M, Smiths, Select, Cawleys, and Grundon in the marketplace but many in this sector have also been swallowed up by the larger players in very recent times. Weir, Wards, O'Brien's and Simply Waste have all been purchased recently by Biffa.
 
As a result of this activity there is a distinct lack of choice, and variation of national suppliers. There will be reduced competition particularly for larger value projects, where there is duplication of facilities and resources there is likely to be closures and job cuts. The greatest risk however is in prices and charges. It is not inconceivable that price increases forced by the 2 new "Leading" service providers will be high and extravagant and those not in fixed price agreements will potentially suffer in the future. For our Government customers such as universities and the NHS there will be no way of passing these increases on and some have not tied contracts into RPI fixed agreementsor as in most of our customers at least 3 year fixed price contracts.
 
This should almost create a perfect storm for our recycling and waste benchmarking review. If prices are going to rise then everybody needs to be looking at alternative solutions and ideas to nullify the effect of those that cannot be countered.
 
Conclusion
 
Current and recent buyouts of various recycling and waste organisations will lead, in the near future to reduced suppliers in the marketplace particularly at the Tier 1 level. We suspect that considerable price increases will occur in March / April 2022 if not before.
 
To counter this and to ensure you are ready and prepared for a future with fewer options we strongly advise considering a benchmarking review of your recycling and waste solutions. This will help you to increase recycling and reduce costs in the short term and plan for the longer term. Through our tailored strategies and recommendations which we have developed over a number of years you may avoid painful issues in the longer term.
 
"If there's a better way to deliver your FM services we will help you find it"
 
T: 01684 580680
E: efficiency@sitemark.co.uk
W: www.sitemark.co.uk