Annual Report 2013

Managing Director’s Review
Business Review - Resource Recovery

Resource Recovery is an integrated waste management business providing collection, recovery, recycling, disposal and advanced technology treatment of waste services. Waste collection services operate under the AES brand, providing both domestic waste management throughout the Midlands, South East and Mid West regions, and commercial waste management nationwide.

Innovation with a fresh approach

Our focus is on delivering exceptional customer service and maximising the re-use potential of managed waste materials. One of our key goals is diversion of waste from landfill.

Air & Odour 
Abatement Water and 
wastewater

"Through continuing improvement measures in service provision, specifically in domestic collection, customer acquisition and retention targets were achieved."

Challenges

Reduced Waste Volumes

The economic downturn has led to a continuing reduction in domestic and commercial waste volumes, although the rate of contraction has slowed from recent years. Industry over-capacity has prompted aggressive product pricing, resulting in the failure of several operators within the sector.

Cost Base

As for many other sectors, Resource Recovery experienced considerable cost increases, particularly due to rising fuel costs in collection activities. A large increase in the landfill levy saw greater volumes of waste being exported. Many integrated operators absorbed the landfill levy rather than passing it on to the generators of waste, thereby discouraging the recycling and recovery of waste through the ‘polluter pays’ principle.

Prices & Margin

The exporting of waste has resulted in downward pressure on landfill gate fees which, together with the proposed levy increase, leaves a very difficult trading environment for landfill operators. There has also been a significant drop in demand and prices for commodities recovered from recycling operations. These increased residual disposal costs, combined with reduced yields for recovered materials and over capacity within the sector, have ensured that yield and margin per customer remain below target.

Achievements

Service Level Improvements

Through continuing improvement measures in service provision, specifically in domestic collection, customer acquisition and retention targets were achieved. Resource Recovery’s cutting-edge technology resulted in lower collection costs per customer, a decrease in missed bin collections, an overall improved customer experience and a reduced carbon footprint for the fleet. The business was also ahead of regulatory targets for the roll-out of the brown bin (organic waste) service, which further enhances the domestic service offering.

Drehid Waste Park Facility

The business received planning approval from An Bord Pleanála for the construction of a 250,000 tonnes per annum Mechanical Biological Treatment (MBT) plant at the Drehid facility. This will be the most advanced, fully integrated and sustainable resource recovery facility in the country. In addition, Drehid’s organic waste compost facility has been approved by the Department of Agriculture, Food & Marine. The Drehid waste park facility will provide a long term, sustainable and far superior method of treatment for waste than current industry processes. A landfill gas project will be commissioned and become fully operational by the end of 2014, delivering significant long term returns.

Commitments

Improved Service Offering

The business will continue to improve its service to domestic and commercial customers, thereby reinforcing Resource Recovery’s position as the service provider of choice. The business will deliver innovative recycling and recovery solutions for industrial customers, thereby providing full visibility of their waste streams. This will assist customers with the delivery of their sustainability agenda.

Sustainable Indigenous Processing

The business welcomes the 2012 ‘A Resource Opportunity’ policy statement issued by the Department of the Environment, Community and Local Government and embraces the objectives and initiatives contained therein. Resource Recovery looks forward to its implementation and will strive to surpass the expectations outlined for the industry. In particular, through the Drehid waste park, Bord na Móna will provide a strategically located processing facility. This will offer sustainable treatment methods including segregation, recycling, organic composting and recovery options (including the ability to supply value adding feedstock to Retail and Powergen), as well as residual landfill for non-treatable waste fractions.

Growth, Consolidation & Improvement

While acquisition and market consolidation opportunities are welcome, Resource Recovery will focus on improving the business, as well as stimulating growth in turnover and margin through customer retention and service efficiencies. In addition there will be a sharp focus on waste processing and treatment costs, reduced logistics through re-routing, while cost savings and efficiencies will be targeted in all support service activity.