Declining economic activity led to reduced waste volumes and impacted significantly on the Resource Recovery business.

 

The past year was challenging for the waste management industry. Reduced economic activity has resulted in the emergence of excess capacity in parts of the waste management chain. As a result, margins have been eroded and the investment environment has become less stable.

 

The industry has responded with reduced prices to customers. Tactical changes to reduce excess capacity and cost reduction have been a key focus.

Resource Recovery has responded on two fronts. Firstly and most immediately it has responded to market conditions, reduced its cost base and passed on savings to customers. More fundamentally, Resource Recovery continues to lay the groundwork for competing in a future where landfill reliance for residual waste is substantially reduced and alternative end treatment technologies of waste are offered to customers.

Results
Turnover for the year was €50.4 million. Commercial waste management volumes declined over the year, largely as a result of lower activity levels in key sectors such as retail, hospitality and construction. The decline in underlying waste volumes generated across these sectors showed signs of abating in the final quarter.

 

The Group’s domestic business grew strongly in terms of numbers of households serviced in the year. Lower overall prices, strong customer take-up on pay-by-use options and favourable pricing on recyclable and organic bins resulted in a reduction in the average household waste management charge.

 

Residual waste volumes for composting or landfill from external customers increased strongly during the year.

 

Competitiveness
Trading under the AES waste management brand, Resource Recovery provides services to commercial businesses nationwide and domestic customers in the wider midlands region.

 

A lower level of economic activity has reduced waste volumes by up to 20% in certain sectors. Commercial and domestic customers demanded lower prices and more efficient solutions. Resource Recovery responded by focusing on design and execution of its waste solutions. The rollout of domestic pay-by-use options allowed customers to reward themselves by reducing waste volumes and by maximising usage of recyclable and organic collection options.

 

The regulatory environment for waste services continues to evolve. The deployment of new policy instruments such as increasing landfill levies and limits on the amount of organic waste that can be deposited in landfill continues to open up investment opportunities for modern waste treatment technologies. The finalisation of overall policy frameworks and consistent and effective enforcement of existing regulations and standards are important in creating the confidence to underpin these investments.

 

Sustainability
In the past year, we completed the rollout of domestic brown bin services to customers in counties Kildare, Limerick and Carlow. Further rollouts in counties Offaly, Tipperary and Meath got underway in 2009/2010.

 

Largely as a result of these initiatives and continuing investment in recovery facilities, the proportion of commercial and domestic waste handled through the AES waste management business that was diverted from landfill increased from 50% in 2008/2009 to 53% in 2009/2010.

Innovation
In 2009/2010, Resource Recovery completed the installation of a tracking and identification solution across its refuse collection fleet. The solution is based on radio frequency identification (RFID) technology and provides valuable data for maximising vehicle routing efficiencies. It also provides data on waste volumes, allowing customer-tailored waste management plans to be constructed and facilitates online customer communications and transaction management.

 

The business’s plans for investing in large-scale residual waste treatment technologies (as an alternative to depositing untreated waste at landfill) continued throughout 2009/2010. Further announcements are due in 2010. Construction is expected to commence on a 25,000 tonne waste composting plant at Drehid, Co. Kildare in 2010.