Waste management companies in Perth are enjoying more demand for their services, but face continuing challenges finding markets.
Waste management companies in Perth are enjoying more demand for their services, but face continuing challenges finding markets.
When Jim MacNaughton moved from the UK to Perth 12 years ago, he saw an opportunity to do things differently in the waste management sector.
His Malaga business, Cleartech, has achieved strong growth, moving an estimated $100 million of waste, despite not having a big fleet of trucks as his competitors do (Cleartech only has two trucks, and plans to keep it that way).
Instead, Cleartech partners with a variety of other businesses, including composting company C-Wise, skip bin supplier West Bin, and tanker supplier Team Livestock Cartage to deliver waste management services to its clients.
“Our industry has always been operations focused, and you always needed to have your own trucks,” Mr MacNaughton said.
“We don’t operate that way, we’re the solution provider.”
In the Cleartech business model, the operations come in behind the sales people who find a solution.
“The waste industry has been a graveyard for sales people; that needed to change,” said Mr MacNaughton, who believes the lack of equipment helps Cleartech be truly independent.
“We’re busier now than we’ve ever been, because more people are engaging with us.
“The economic downturn has forced people to look harder at their costs.
“A few years ago, people didn’t really care, they just wanted us to get rid of their waste.”
Industry moves
Cleantech is not the only company targeting growth opportunities in the sector.
Earlier this month, ASX-listed Cleanaway expanded its operation in Western Australia through the purchase of Matera Waste, the business established by former footballer Peter Matera and his brothers, Michael and Gerard.
As part of the deal, Peter Matera is expected to stay with the business for the next year.
Maddington-based Aurigen Group, which is pursuing an ASX listing, had bought the Matera business this year but onsold it to Cleanaway.
Another notable development this year was the entry of major east coast player JJ Richards & Sons to the Perth market.
Privately owned JJ Richards opened its first WA depot in Bassendean in May, and already has about 30 people and 20 trucks.
The company has focused initially on commercial and industrial waste, but aspires to break into municipal waste.
JJ Richards’ entry to WA came shortly after global player Suez consolidated its position in the state by paying $87 million for local company Perthwaste.
Regulation
These changes come against a backdrop of industry frustration over the lack of government leadership.
This was reinforced by a scathing report released last week by acting auditor general Glen Clarke, who found the state government had failed to hit any of the targets in its own waste management strategy.
The report said WA produced an estimated 6.2 million tonnes of waste each year, but only about 40 per cent was diverted from landfill, much lower than the national rate of 60 per cent.
The report concluded that one of the reasons for this poor outcome was the lack of coordination between the two key agencies – the Department of Environmental Regulation and the Waste Authority.
Mr MacNaughton concurred with the main findings.
“Recycling is happening despite the DER and Waste Authority, not because of them,” he said.
“To have real sustainable change, the authorities need to engage with us as contractors and the waste producers.
“We can then get real traction, real outcomes, and most importantly, sustainable solutions.
“It has worked in parts of Europe, there is no reason it can’t work here.”
Mr MacNaughton believes it’s the industry that is driving growth.
“We, as operators are moving the industry forward by finding new innovations on waste usage,” he said.
“That is because we have more sophisticated clients who want more, we also have the commercial pressures to make our service offering stand out and be different.”
Mr MacNaughton said one example was the ability to turn plasterboard into compost.
“That allowed us to go to the building industry and tell them we’ve got a solution,” he said.
The auditor general’s report found that recycling rates had increased since 2012, when the Barnett government released its waste strategy, but not enough to meet its targets.
The biggest problem areas were construction and demolition (C&D) waste, which is the largest source of waste in WA, and municipal solid waste.
Companies that focus on C&D waste, such as Bayswater-based Capital, have reported a big inflow of material for recycling after a four-fold hike in the landfill levy; but they are battling to find markets.
Capital managing director Ray Gullotto said that finding markets was challenging because of the product testing guidelines applied by agencies such as Main Roads Western Australia and the Department of Environment Regulation.
Most notably, strict testing has blocked the use of crushed recycled concrete as road base, even though this is common practice in other states.
Environment Minister Albert Jacob launched a $10 million program in April to support recycling of C&D waste.
This includes $8 million for local councils and $2 million of competitive grants.
The latter has attracted applications totalling just $482,000.
“That’s a good start, but I’d like to see a lot more applications come in so that we can start driving behavioural change,” Mr Jacob said.
However, the minister also reiterated his support for product sampling and testing specifications, which he said were in place to ensure recycled products would not result in unacceptable impacts on public health or the environment.
He added that a sampling and testing support scheme, to assist industry with testing products to ensure the recycled material was eligible for funding under the program, was still being developed.
