We have a clear Group strategy to deliver sustained growth and attractive returns through:
- Delivering merger benefits, including committed annual cost savings of €40m in 2019/20;
- Driving margin expansion across the Group through our self-help initiatives of commercial effectiveness, continuous improvement and off-take management;
- Strategic expansion by investing in innovation, broadening our products and services, and investing where we are structurally advantaged in the growing circular economy and can deliver superior returns; and
- Managing our portfolio of assets and businesses: exiting those that are non-core or under-performing and redeploying capital into segments where we can deliver increased returns and growth.
The merger has combined two similar businesses with complementary inspiring visions, organisations, product portfolios and geographic footprints. It is on track to deliver significant synergies, far greater than just cost reduction. Renewi plays an important role as a recycler and supplier of high quality secondary raw materials in the growing circular economy to meet the increasing needs of its customers, regulators and society.
The creation of Renewi has widened the range of products and services to our combined customer base. For example, we are now not only providing the Dutch incineration industry with high quality recovered fuels from the Netherlands, the UK and Belgium, but also recycling its bottom ashes into products for building materials and immobilising its fly ashes through our Mineralz business, providing industrial cleaning services through our Reym business and managing some of its non-core waste streams such as bulky or green waste. We have also been able to extend our “Total Care” offering that provides industrial cleaning, waste collection, logistics and treatment to larger industrial customers under a single service.
As a result of combining the two legacy businesses, we have also expanded and strengthened our geographical footprint and now cover the whole of the Benelux and other European countries such as Germany, France and Portugal. We can serve customers across the Benelux more efficiently, saving on logistics costs, improving customer care and reducing our carbon footprint. Our increased scale also means that we can procure certain assets and supplies at more competitive prices.
As expected, we are seeing a wide range of benefits from combining the logistics scale and expertise of VGG with the broader treatment capabilities of Shanks. Significant synergies have been delivered through the rerouting of waste collected from VGG customers to be treated in Shanks facilities, expanding margins and optimising asset utilisation. Our merger has also resulted in better prices and capacity utilisation.
We are also progressing a further initiative regarding the potential benefit of digitalisation on our industry and on Renewi. We will focus initially on driving efficiency within our own company through automation, robotics, and digitalising interfaces with customers and suppliers. In the longer term, we will focus on emerging technologies for the industry such as smart bins, web-based customer relationships, asset light strategies and other potentially disruptive models.