24-25 Jul 2024

Resilient waste and recycling sector to ride out tough times

Apr 9, 2020 Community

Adaptable larger operators are set to survive – some may even thrive – following the coronavirus challenge.

While no-one could have anticipated the scale of the coronavirus pandemic gripping Australia, the country’s modern and efficient waste and recycling sector is better placed than most to meet the challenge of COVID-19.

Not only does the public rely on these companies to handle hazardous industrial and medical waste, the Australian waste and recycling sector has developed robust protocols to protect the health and safety of its workers.

But industry leaders say that while Australia’s large corporates will survive this changing business environment, smaller operators who rely on the hospitality sector or office-based clients could struggle.

“With so many businesses [across Australia] shutting down, that’s obviously impacting financially on some parts of the waste sector,” says Rose Read, CEO of the National Waste and Recycling Industry Council.

On a more positive note, the waste and recycling industry has proved extremely nimble in coping with higher volumes of both household and medical waste as Australians self-isolate and hospitals go into overdrive.

“People who work in the waste and recycling sector are a resilient and positive bunch,” says Read. “It’s also a very supportive industry; if things get tough, individual companies will help each other out.”

Changing work practices

The waste and recycling industry has moved quickly to implement a range of stringent measures to protect the health and safety of its workers. These include social distancing, the use of protective clothing and even splitting shifts to reduce possible exposure to COVID-19.

Read says while large national operators already have a robust set of safety protocols, these have been further refined in the face of the current threat.

“For major national companies, the focus remains on keeping their staff healthy and their staff employed,” she says.

Cleanaway Waste Management Limited, Australia’s largest waste and recycling company, with more than 250 sites and 6,500 employees nationwide, has tightened work practices to protect truck drivers from the killer virus.

“We’ve implemented measures such as social distancing, [more frequent] cleaning of the trucks and splitting shifts so that they are not congregating together in the depot,” says Mark Biddulph, Cleanaway’s head of corporate affairs.

In response to the changing business environment, Cleanaway has also reassigned vehicles and drivers from areas of low demand to those where they are most needed, such as the medical sector. “Luckily, our nationwide fleet provides that mobility and flexibility we need at the moment,” says Biddulph.

Immediate impact

With so much of the Australian economy in lockdown mode, it’s hardly surprising many specialist waste collection operators are limping from one day to the next.

Tony Khoury, executive director of the Waste Contractors & Recyclers Association of NSW, says parts of the industry (such as household waste) remain bullish, while some smaller operators face an uncertain future. “At the moment it’s all about survival and getting the job done in difficult circumstances,” he says.

Khoury, whose organisation represents 204 operators across NSW and the ACT, says while some members are struggling, the overall picture is confused since the three primary waste sources (municipal, commercial and industrial, construction and demolition) are performing differently.

“The volumes are all over the place,” he says. “In some parts of the industry, such as municipal, they have gone up a bit because more people are working from home, but most of the commercial and industrial volumes are down.”

Cleanaway’s Biddulph is similarly cautious about jumping to conclusions about the impact of COVID-19. “It’s too early to tell with residential [waste] whether we’ve had any increase or decrease,” he says. “But you’d imagine there will be a significant increase. Where we’re seeing a downward flux is in commercial and industry [waste] because so many SMEs have been impacted.”

Threat to small operators

Many of Australia’s smaller waste and recycling firms are certainly feeling the pinch. Khoury says operators with clients in the hospitality and commercial sectors are likely to be the most under pressure.

“Our advice to members is to really take a hard-line look at your business if you want your business to be still going in September or October,” he says.

He believes one of the consequences of this downturn in business could be a consolidation of the waste and recycling industry as larger firms absorb smaller operators that find themselves with reduced cash flow. “Some of the bigger operators are always looking to grow their businesses by making strategic acquisitions,” he says.

On a more optimistic note, Khoury says operators who survive the next few months will be in a good position to thrive in a post-COVID-19 world. “There will always be a demand for waste collection, processing and disposal services,” he says.

Future opportunities

Having been classified as an essential service by the Federal Government, Australia’s waste and recycling industry is well-placed to ride out the coronavirus storm.

Exactly what the industry will look like next year is impossible to predict, but many observers predict consolidation as some smaller operators collapse or are taken over by rival companies looking to expand.

Well-off operators might take advantage of the Government’s $150,000 tax write-off scheme to purchase new plant equipment – that offer expires on June 30. “If you need an asset and have the cash, I’d advise operators to tip in and buy that asset because you’ll receive an instant deduction,” says Khoury.

Read has no doubt the industry will continue to invest and provide a comprehensive range of services to customers.

“Australia’s waste and recycling sector is highly mechanised and uses the latest systems,” she says. “We’ve always had a big focus on worker safety. I believe we’re well placed to handle the current challenge.”

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