Global Renewables shifts overseas to seek expansion
Wednesday, 28 March 2007
High profile alternative waste treatment company Global Renewables will reduce local investment in search for greater opportunities in Europe. The company says small landfill levies and lack of other drivers to reduce waste to landfill are pushing its investment away from the Australian market.
Turning rubbish into resources, GRD's Eastern Creek facility for Global Renewables
After signing a 25-year waste-processing contract with two UK councils last month, the subsidiary of Perth-based GRD has decided to move its head office to Manchester, UK.
Global Renewables said while the $5 billion Lancashire contract created a singular expansion opportunity, the search for future investment in the UK was due to the lack of waste reduction legislation in Australia.
The manager of Australasian development for Global Renewables, Brad Rodgers, told EMN while the majority of capital would be re-invested offshore, the company would retain a foothold in the Australian market.
"We are not leaving Australia, we will be keep doing some business here. We have many people who are not moving to the UK. If an opportunity comes up here we won't miss it," he said.
It has in the last few weeks re-opened its showcase facility at Eastern Creek in Sydney after a fire last year, and is still hoping to secure federal and Victorian funding for a plant in western Melbourne.
Waste gate fees and levy charges are much lower in Australia compared with the UK, where legislation is forcing local councils to pay substantially for every tonne of untreated biodegradable municipal waste sent in landfill.
Progressive targets in the EU's Landfill Directive start in 2010 and culminate in 2020 with a 60% reduction in biodegradable municipal waste to landfill. Councils that landfill more than their annual allocation will be forced to pay $375 per excess tonne.
On the flip side, a council reducing waste further than the target creates a cash commodity in the form of a credit. The mechanism will create a boom in the alternative waste treatment sector.
Rodgers said by 2010 more councils and operations will be looking for alternative waste reduction in order to avoid penalties, reduce waste costs and obtain credits for beating waste reduction targets.
"That type of framework creates a clear incentive for UK councils to buy our services, an incentive which we don't have in Australia," Rodgers said.
He added while Global Renewables was making the smart commercial move, it does see a future in the local market.
"We've been lobbying (governments here) for almost 10 years. We will continue but we need to ensure a return for our shareholders. We are not giving up," he said.
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