Biffa’s chief executive says his company’s agreement to acquire Viridor’s collections business demonstrates its ambitions in the industrial and commercial (I&C) waste market.
Michael Topham addressed a webcast this morning (21 May) a few hours after Biffa announced it had agreed to acquire the I&C collections business and “certain recycling assets” from Viridor for £126 million (see letsrecycle.com story).
Biffa has agreed to acquire the collections business and ‘certain recycling assets’ from Viridor for £126 million
The acquisition includes three waste transfer stations in Edinburgh, Sheffield and Cornwall, 15 depots across the country and ‘wet waste depots’ in Slough, Thurrock and Taunton.
The recycling assets include four material recycling facilities (MRFs) in Ford, Plymouth, Milton Keynes and Masons, three composting facilities in Priorswood, Walpole and Dimmer and an anaerobic digestion plant in Walpole.
‘Significant’
Mr Topham said: “This is a really significant deal for us. It’s going to make a massive difference. I think it’s going to be very earnings-enhancing, but hopefully it’s going to be very straightforward for us from a strategic perspective.
“We’ve talked for a long time about our ambitions in the I&C market. We’ve done lots of deals and we’ve always delivered on those. We’ve integrated in a very disciplined way: we’ve always delivered on synergies and this will be no exception.”
Through the acquisition, Biffa will acquire Viridor’s nationwide I&C fleet of 270 vehicles and 15 depots across the UK. If the deal goes ahead, these “synergies” will see Biffa combine and reroute I&C collections to make savings through efficiencies.
I&C waste volumes have been among the hardest hit throughout the pandemic. In its trading update for the third quarter of the 2020/21 financial year, Biffa said volumes had stabilised at around 80% of prior year levels for the fourth quarter (see letsrecycle.com story).
Sustainability
Mr Topham also said the deal underpinned Biffa’s commitment to its sustainability ambitions. Biffa says the deal strengthens its position as one of the largest recyclers of post-consumer materials in the UK and supports focus on helping customers to increase recycling through “improved flexibility of service”.
Michael Topham is chief executive of Biffa
Increased route density and efficiency will reduce the carbon intensity of Biffa’s services and positions it “better” to deploy alternative fuel vehicles, the company says.
It says its increased scale “further strengthens” its positioning to meet upcoming regulatory changes to services, including compulsory separate recycling and food waste collections. The government is currently consulting on these policies as it looks to increase consistency in collections (see letsrecycle.com story).
The deal also underpins Biffa’s growth in plastic recycling through increased control of feedstock for its polymers business, the company says. Biffa officially opened a £27.5m recycling plant for PET plastics in Seaham, County Durham, in January 2020 (see letsrecycle.com story) and announced it would increase the capacity of its plastics recycling plant in Washington, Sunderland, by 14,000 tonnes per year in March this year (see letsrecycle.com story).
Mr Topham added: “The underpinning of the sustainability strategy is really exciting to me. I think it talks to the complementarities there are between what we’re doing and our sustainability ambitions.”
Electric vehicles
When asked how far Biffa could go in making its entire fleet electric, Mr Topham expressed optimism but sounded a note of caution.
Biffa’s 27-strong electric fleet was unveiled in Manchester on 8 March
He said: “The electrification of waste collection is in its very, very early stages. In truth, at this stage electric vehicles are double to triple the cost of conventional technology and are not suitable for a lot of the collections that we do. They will work in places where it’s a low mileage range within a route and on pretty flat ground.”
Biffa is in the process of rolling out the “first” full electric fleet in Manchester, representing 27 vehicles (see letsrecycle.com story). Mr Topham said the process was “about halfway done” and “working well”.
He added: “We’re naturally starting in city centres. It can’t come soon enough. We’re at the vanguard here, but this is a long-term ambition.”
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Source: letsrecycle.com Waste Managment
