Tox Free caps off good year at $130m

Four acquisitions in just more than a year has propelled Kwinana-based waste management solutions provider Tox Free Solutions from a $1.5 million company two years ago to a business with a market cap of $130 million.

This is an achievement of which managing director Steve Gostlow is proud, after years of losses leading up to 2004 as a result of attempts to commercialise Tox Free’s, now successfully deployed, thermal absorption technology.

The listed company’s current half-year earnings results indicate a rise in net profit of 143 per cent on the previous corresponding half year, with revenue up 60 per cent to $7.9 million.

The market has also responded positively to the company’s acquisition activity, lifting its share price 66 per cent in the past month.

“The company has expanded quite quickly in the past two and half years,” Mr Gostlow told WA Business News.

“We wanted to provide a one-stop shop, providing all the industrial services on site. It’s a service that industry required – they wanted to deal with one company.”

Tox Free started its acquisitive growth phase in January 2006 by acquiring Delvex Industrial Cleaning, expanding its portfolio into industrial cleaning for the shipbuilding and port services in Henderson and Fremantle.

This was followed in mid-2006 by the acquisitions of Kalgoorlie-based Grime Fighters Fluid Clean, and Specialised Tank Cleaning Services, which operates from Henderson.

But its biggest acquisition, in February this year, was of Kimberley Waste Group for $13 million, which expanded the reach of Tox Free’s services throughout every region of WA.

Now successfully commercialised, Tox Free’s thermal absorption unit is considered the best available technology for the treatment of contaminated soils, according to Mr Gostlow.

He said that, with recent hazardous waste incidents at Bellevue and Brookdale drawing public attention to the hazardous waste management sector, taking on the role of industry leader in innovative technologies was vital.

“Since the Bellevue incident, the standards from the state government and the emphasis on the waste management industry has been significantly increased,” Mr Gostlow said.

“We’re continually getting inspected. We have a lot of inspections from our big blue-chip clients to ensure our practices are appropriate.”

Mr Gostlow’s technically experienced team includes one full-time environmental health and safety compliance manager, six chemists and two environmental scientists.

“We’ve maintained that we’re a highly qualified, highly technical solution provider, not just a dig and dump provider,” he told WA Business News. “Even our technical sales operators are chemists or environmental scientists.”

But, Mr Gostlow argues, the industry has cleaned up its act since Bellevue, with tighter monitoring and industry consolidation reducing the number of smaller players.

“[Bellevue] was clearly an isolated incident,” he said.

“Those days are over. The industry’s very much consolidated, there are now only three or four players in the game.

“We’re serious about the operations and community perceptions. We’re aware that we have to keep investing in our own sites to bring in new and better technologies.”

With interstate operations in the form of a specialised tank cleaning division servicing navy boats in Sydney, the company’s current focus is on growth within WA.

The state’s booming oil and gas industries, the expanding Australian Marine Complex and Kwinana industrial area, plus the state government’s new Contaminated Sites Act legislation, have created huge opportunities for Tox Free.

“The state is booming, and everywhere there’s growth there’s also a requirement for industrial services and especially waste management,” Mr Gostlow said.

The company has also been approached by several overseas companies and governments interested in applying the thermal absorption technology to solve their waste management issues.

Earlier this year, Tox Free entered into an agreement with US-based Remtech Inc to undertake an environmental remediation project at the Vanderberg military base in California.

The company has also been approached by the Polish government, and companies from countries including China, to assist in reducing their landfill.

One of the applications for the technology of particular interest is for turning used tyres back into their constituents – oil and carbon black – which could then be used for generating electricity and making new tyres.

“We’ve found [this application] hasn’t been commercially viable in Australia, as landfills are quite cheap here, but it could be in future,” Mr Gostlow said.

“We’re trying to stay ahead of the game, looking at other technologies and developing and bringing them into the group, so that when the market changes here in WA we can take advantage of it.”