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Commercial

The Commercial Division represents around two thirds of the revenue of Renewi. It provides a wide range of waste management solutions.

Renewi is market leader in the Benelux and collects and transports waste from households and businesses to sorting, treatment and processing facilities. We provide customers with cost-efficient waste management solutions whilst giving waste a second life as high-quality raw materials and energy.

The commercial waste market covers the collection, sorting, treatment and ultimate disposal of waste materials from a range of sources. The market can be divided into three main sources of waste: Construction and Demolition (C&D), Industrial and Commercial (I&C), and Domestic. Renewi deploys part of its own sorting and recycling operations within this division for, amongst others things, paper, cardboard, wood, plastics, metals and C&D waste. Other specific recycling activities are clustered within the Monostreams Division.

Our unique business model in this market is to focus on the value that we can recover from specific waste and material flows that we can upgrade during the sorting and treatment phases of the cycle. This also means that we apply our knowledge on material flows to collection methods and logistics solutions for specific customer segments and sectors.

We generally collect a large part of our volumes ourselves to secure waste volumes, and we dispose only of the residues that we are unable to convert into a reusable product or recyclate. In this way, we ‘waste no more’ both environmentally and economically. Our general business model is set out in the graphic below.

We operate our commercial division in the Benelux. Our sites have a diverse profile in terms of the source of waste and customer segments, which affects its current financial performance and competitive strategy.

Markets

The Commercial Division serves three main market segments across the Benelux.

The industrial and commercial (I&C) segment meets the needs of specific markets, sectors and businesses including production factories, offices, hospitals, retail, shops and restaurants. Waste streams are preferably collected in a pure form and separated at the source to ensure quality, such as segregated paper or plastic, food waste or glass. Within this sector there still is a significant flow of mixed waste. We develop programmes to further minimise this mixed waste stream by informing our customers of the positive impact of separation of waste, both economical and environmental, and we even provide communication programmes to boost our customers’ waste minimisation and separation.

The I&C segment was challenged during 2011-15 by over-capacity in the Dutch incinerator market and severe pricing competition. Market conditions have improved over the past 12-18 months, with the incinerators full and prices beginning to rise. These higher prices for incineration also have a positive effect on recycling as separation of waste becomes more financially viable for our customers. The introduction of dynamic pricing, so that movements in the value of the products we make are reflected in the gate fee we charge to take in waste, has reduced risk to the business operating model.

The construction & demolition (C&D) segment is primarily served by the former Shanks businesses. C&D waste arises from residential, commercial or infrastructure construction. The construction market in the Netherlands, which had hit a 63-year low in 2014, has continued to recover well since then, with growth of 6.3%. Pricing remains relatively weak, with many of the major customers still experiencing low margins.

The domestic segment provides “hands and wheels” services in door-to-door municipal collection. This can be through a direct service agreement or through a form of Public Private Partnership in which Renewi controls the service provision for a management fee. The municipal segment is fundamentally different to the activities of our Municipal Division because the contracts tend to be much shorter in duration and for collection only; in the Netherlands the waste remains the property of the municipality.

The Commercial Division also operates in a number of niche segments, many of which are complementary to the principal segments outlined above. These include the collection, separation and aggregation for treatment of small packed hazardous waste such as batteries, paint and out-of-date pharmaceuticals, the collection of organic waste streams from restaurants, a wood chip manufacturing segment and two landfills.

Technologies and Products