Jonathan Short, deputy chairman and founder of ECO Plastics, says we can change the way we do business to “disrupt the waste chain” and reduce our carbon footprint
CIWM Journal Online Exclusive
Whilst the focus of our sector is often on how government policy is or isn’t helping it achieve the UK’s national recycling targets, we should never lose sight on how we as an industry are constantly moving forward in our own right. Our sector is still a young one, but one which shamelessly strives to innovate and deliver new value throughout the waste chain, both in terms of economics and sustainability.
ECO Plastics seeks to be at the forefront of that wave of innovation. Whilst we wait for the Government to catch up with the sector, we’re taking matters into our own hands. For us the first step is to challenge and change the way the market currently operates – a strategy we’re calling “disrupting the waste chain” – and make plastics recycling in the UK stronger than ever.
The scale of opportunity to grow the recycling industry is vast. Currently, the UK recycles over 400,000 tonnes of household waste plastic each year, the equivalent weight of 2,197 four-carriage trains) or 58,823 African male elephants. It’s a huge achievement considering the recycling revolution began in earnest only a decade ago. Still, given that only 19% of the 600m tonnes of total products and materials entering the UK economy each year is recycled according to WRAP, there is a significant opportunity to recycle even more.
To seize this opportunity, we desperately need regulatory change and the plastic reprocessing industry will be much more vocal about this in the coming months – much is promised by Government but little is delivered.
A Role For The Industry
There is also a strong role to be played by the industry. Our business strategy to ‘disrupt the waste chain’ involves three key stages: establishing long term contracts with key feedstock partners; working with partners to make waste processing more cost effective; and improving the over-all quality of feedstock.
ECO Plastics has set a goal to acquire 70% of all feedstock from long term contracts with valued suppliers, by the end of the year. This departure from traditional short term purchasing on the spot market may seem radical, given that it can deliver robust prices at times. However, the spot market provides very little certainty over future revenue levels and we believe that the price stability derived from long term contracts represents the best deal for us and our supply chain. Importantly, it will enable us to calculate long term cost projections, thereby eliminating considerable risk and granting us access to finance for expansion and R&D at better rates. Expansion will drive further cost savings through economies of scale, and most importantly enable us to recycle more valuable resources in the UK which can’t currently be recycled domestically, thereby growing the UK recycling industry as a whole.
To seize this opportunity, we desperately need regulatory change and the plastic reprocessing industry will be much more vocal about this in the coming months – much is promised by Government but little is delivered.
Currently, we source 40% of our feedstock from long term partnership contracts. Our latest partnership, signed earlier his year, is with leading waste management firm, Viridor. The 12-month contract sees Viridor supplying our Hemswell bottle recycling facility in Lincolnshire with up to 10,000 tonnes of plastic bottles throughout 2014. At 6% of our total processing capacity (150,000 tonnes), this represents a significant milestone for ECO Plastics in our drive to develop more strategic relationships within the supply chain.
The second tenet of our strategy is a drive to improve the quality of feedstock supplied to us for processing through our Supplier Quality Audit (SQA) service. This pioneering service enables suppliers, such as local authorities, to tap into ECO Plastics’ expertise to refine their own processes to produce the most efficient waste streams. The new streamlined process will require less sorting and will divert more of a local authorities’ tonnage from landfill annually due to ECO Plastics’ superior sorting technology.
Sorting Efficiently
The third tenet of our strategy is an initiative to work with some local authorities to assist them in how to sort their recycled plastics collections most efficiently. This enables those councils with the appropriate facilities to create a new revenue stream, from what was previously a cost, by conducting an initial sort of the waste to isolate their mixed plastics, which they can then sell directly to us. This new income, combined with the need to meet more stringent recycling targets, will prompt local authorities to encourage more recycling in the community, therefore diverting more waste away from landfill and saving on costly landfill tax. This presents a genuine win for local communities, both financially, and environmentally. At the same time, it provides a further opportunity for ECO Plastics to establish longer term partnerships.
Our first contract to embody our new strategic business model is our ground breaking new long-term partnership with Gwynedd Council, Wales. As part of this relationship, our SQA team advised on how to improve quality of feedstock, and we’ve established a long term contract to purchase the feedstock directly from the Council. It’s a great deal for both parties, and one which we hope we will replicate with local authorities throughout the country.
Together, we can disrupt the waste chain by changing how we do business, generate sustainable long term industry growth and reduce our carbon footprint.
