Sterecycle plans to build and operate five new recycling plants in the UK

(17/07/2009)

Sterecycle Ltd has announced a £200 million expansion programme that will create 300 new jobs while reducing Britain’s dependence on landfill for the disposal of domestic and commercial refuse. As part of the expansion programme, the Company is raising £50 million in new equity capital from institutional investors and has appointed UBS as financial adviser for the fund raising.

Sterecycle plans to build and operate five new recycling plants around the UK based on its proprietary steam autoclaving technology, increasing its total capacity to handle unsorted household and commercial waste to approximately 1.5 million tonnes a year – equivalent to the annual waste produced by a city of three million people. These facilities, to be built over four years, will also provide local authorities with a commercially proven alternative to mass incineration of waste, a contentious local issue.

The expansion follows the successful ramp-up of processing capacity at Sterecycle’s initial autoclave waste recycling plant in Rotherham, Yorkshire – the world’s first commercial-scale facility that applies steam to separate and recycle unsorted household waste. This pioneering plant, built on a former British Steel works, commenced operations last June. Its capacity is being increased up to 200,000 tonnes a year, following a successful planning application in January 2009. Using proprietary technology, Sterecycle’s recycling plant is able to divert 70% of residual waste away from landfill, converting unsorted household waste into a variety of reusable materials and an organic compost-like material.

Demand for Sterecycle’s recycling technology and services is increasing as local authorities come under intense pressure to meet UK and European Union directives to reduce landfill use or face the threat of heavy financial penalties. In addition, the recent UK budget means that landfill tax will increase to £72 per tonne by 2013.

Since its foundation in 2003, the Company has raised a total of £23 million in equity finance, with funds coming from blue chip institutional investors including Goldman Sachs, Fidelity International, Impax Environmental and Ailsa3Ventures.

Duncan Grierson, Chief Executive and Founder of Sterecycle, commented: “We are delighted to announce a bold growth strategy as local authorities increasingly seek innovative solutions to reduce landfill use for disposing of unsorted waste. The investment will increase our total number of plants to six and will create 300 new jobs across Britain. The fact that we are raising £50 million in a tough economic climate is a reflection of our confidence in Sterecycle’s novel technology and long-term prospects.”

The use of steam, or “autoclaving”, in the waste sector has previously been relatively small-scale and limited to sterilising medical waste. Sterecycle’s clean waste treatment process “steam sterilises” the unsorted waste at low temperatures in rotating 40 feet long sealed vessels called autoclaves, using a combination of steam and pressure, treating 25 tonnes of waste in each batch. The waste is then sorted using a series of recycling processes such as size screening, magnetic separation and infra-red. The process is able to sterilise and recycle the steam cleaned metals and plastics, as well as convert the waste food and paper into a high quality organic fibre (sterefibre®) that has many applications, including as a renewable energy source or as a soil enhancer for land remediation.

Related categories:  Biodegradable waste   Glass recycling   Metal recycling   Paper and cardboard recycling   Plastic recycling   Recyclable materials   Textile recycling