Over the past couple of months, the media has been littered with environmental news stories; examples have included the 25 Year Environmental Plan announced by the Prime Minister, the Chancellor’s budget and its implications for the waste industry, and finally the risks posed by China’s restrictions on waste imports.
These developments are bringing about significant changes within the waste sector – prices paid for waste materials such as cardboard and scrap metal are volatile; prices for plastics have nose-dived recently due to China’s restrictions on waste imports.
Changing market conditions are the perfect opportunity for some waste suppliers to drop the amount they were paying businesses for their waste. Whereas most of these variations will be fair, businesses can be on the end of some bad deals if the appropriate controls are not in place with their waste supplier.
A recent project with a multi-site aerospace component manufacturer who generates large volumes of various types of scrap metal is a good example. Although the incumbent supplier was suitable, we quickly realised that the contract prices were below-market. Following a thorough tender process, we were able to unlock rebate improvements of over £200k per annum from the same supplier, and additionally offer alternative suppliers that could meet the same pricing commitments.
Of course, it is hard to negotiate effectively without knowing the market value of materials. Around 65% of UK-produced waste is exported around the world. Therefore, it is necessary to keep abreast of both domestic and export market trends. Currency fluctuations can also play a part in export pricing and have clearly done so since the Brexit vote hit the value of sterling.
Mitigating cost rises
April 1st 2018 brought cost increases across the waste sector, which happens each April when landfill tax increases.
Taking the time to properly research the market allows businesses to identify better ways to organise their waste management or more fitting materials to use within their businesses. If waste disposal methods have been ‘working’ for years, they should still be assessed in line with operational requirements. We often find that even those businesses that have been recycling successfully for years are actually missing out on key cost saving measures through streamlining operational processes and reducing labour costs.
During your assessment you may need inspiration. We have helped other businesses increase their bottom lines and improve waste management. Allowing us to share best practice with you may be the motivation you need to apply the practice to your own business.
Following our involvement, many businesses realise that improving processes is not as complicated as they thought. With the help of our consultancy services you can save money by implementing the best solutions that work for your business. Get in touch with us today to discuss more about your waste management solutions.
Article by: Dan Howells