Garbage a re­spectable in­vest­ment

En­vi­ron­men­tal con­scious­ness has driven com­pa­nies to find trea­sure in trash, writes James Dunn

The Weekend Australian - Review - - Investments -

ON the stock mar­ket, re­cy­cling is not just a noble aim of clean­ing up mess and re­duc­ing pres­sure on re­sources: it is money. As the say­ing goes, where there’s muck, there’s brass’’. With prices of vir­tu­ally all raw ma­te­ri­als go­ing through the roof, the eco­nomics and ethics of re­cy­cling have fi­nally co­in­cided. Not only do raw ma­te­ri­als cost more, at the other end of in­dus­trial pro­cesses, waste prod­ucts cost more to dis­pose of — and there are bur­geon­ing en­vi­ron­men­tal con­straints on the dis­posal of waste.

For re­cy­clers, the en­vi­ron­men­tally con­scious times bring the per­fect op­por­tu­nity to make prof­its at both end of their busi­nesses — charg­ing to take away waste, and sell­ing the re­cy­cled ma­te­ri­als.

Re­cy­cling is con­sid­ered an in­te­gral part of the emerg­ing in­vest­ment sec­tor of clean­tech’’, the term used to de­scribe com­pa­nies in­volved in al­ter­na­tive and re­new­able en­ergy sources, re­cy­cled ma­te­ri­als, en­ergy ef­fi­ciency, car­bon emis­sions re­duc­tion and wa­ter pu­rifi­ca­tion and pol­lu­tion re­me­di­a­tion tech­nol­ogy.

Jef­frey Castel­las, chief ex­ec­u­tive of­fi­cer of Clean Tech­nol­ogy Aus­trala­sia, says clean­tech is the next big wave in tech­nol­ogy. Clean­tech is where biotech was 10 years ago,’’ he says. World­wide ef­forts to ad­dress en­vi­ron­men­tal prob­lems such as global warm­ing, air pol­lu­tion, wa­ter se­cu­rity and in­creased en­ergy use are on the rise, and clean­tech, a new in­dus­try based on in­no­va­tive clean tech­nolo­gies, has be­gun to cap­ture the at­ten­tion of the in­vest­ment com­mu­nity.’’

What makes re­cy­cling such a com­pelling part of the clean­tech ar­gu­ment is that on the back of the mas­sive in­dus­tri­al­i­sa­tion oc­cur­ring in the BRIC ( Brazil, Rus­sia, In­dia and China) na­tions and the emerg­ing economies of the Per­sian Gulf, the world can no longer sat­isfy de­mand for pa­per and steel from vir­gin ma­te­ri­als alone. Re­cy­cling has be­come an ab­so­lute ne­ces­sity for in­dus­trial growth and sta­bil­ity.

Th­ese re­cy­clers have joined Sims Group on the Aus­tralian Se­cu­ri­ties Ex­change ( ASX):

CMA Cor­po­ra­tion ( CMV, mar­ket value $ 211.4 mil­lion): Met­als re­cy­cler CMA has in­te­grated op­er­a­tions in the sup­ply, pro­cess­ing and ex­port­ing of scrap metal as well as in re­source sec­tor plant de­con­struc­tion, in­dus­trial de­mo­li­tion, site clear­ance and re­me­di­a­tion. It op­er­ates in Aus­tralia, New Zealand, Sin­ga­pore, Malaysia and the US. Bro­ker In­ter­su­isse says the group’s ex­pan­sion moves over the past year or so are now show­ing the ben­e­fits: the first- half re­sult was a strong one, with rev­enues up more than 120 per cent and net profit af­ter tax up 159 per cent to $ 7.4 mil­lion. The bro­ker sees this trend as con­tin­u­ing, fore­cast­ing full- year earn­ings this year of $ 20.5 mil­lion ( up from $ 6.5 mil­lion in 2006- 07), in­creas­ing to $ 27 mil­lion in 2008- 09.

Transpa­cific In­dus­tries Group ( TPI, $ 2.3 bil­lion) Transpa­cific is a lead­ing provider of waste man­age­ment and en­vi­ron­men­tal ser­vices with op­er­a­tions across Aus­tralia and New Zealand. Transpa­cific col­lects, trans­ports, pro­cesses, re­cy­cles and dis­poses of liq­uid, sludge and haz­ardous waste gen­er­ated by the agri­cul­ture, man­u­fac­tur­ing, con­struc­tion, min­ing and gov­ern­ment sec­tors. Wastes col­lected and treated in­clude grease and cook­ing oil, used min­eral oil, sew­er­age, stormwa­ter, win­ery waste, hy­dro­car­bon wastes, bulk liq­uids, ships’ bilge, oily wa­ters, oily sludges and haz­ardous waste. The com­pany col­lects solid waste and re­cov­ers and re­cy­cles or­ganic and in­or­ganic waste ma­te­ri­als: in New Zealand it also cap­tures land­fill gas and con­verts it to elec­tric­ity. In 2006- 07, Transpa­cific earned net profit of $ 103.4 mil­lion, on rev­enue of $ 1.29 bil­lion. This fi­nan­cial year, broking firm Bell Pot­ter is look­ing for net profit of $ 184.7 mil­lion on rev­enue of $ 2.29 bil­lion, both up about 80 per cent.

Re­claim In­dus­tries Lim­ited ( RCM, $ 7.2 mil­lion): Re­claim is a waste tyre re­cy­cling com­pany that pro­cesses the re­cy­cled rub­ber into anti- slip sur­fac­ing, safety, traf­fic, ar­chi­tec­tural, hor­ti­cul­tural and gar­den­ing rub­ber prod­ucts. Re­claim has re­cy­cling fa­cil­i­ties in West­ern Aus­tralia and South Aus­tralia, and man­u­fac­tur­ing and dis­tri­bu­tion fa­cil­i­ties in Vic­to­ria, Queens­land, New South Wales, WA and SA. In 2006- 07, Re­claim re­ported a 10- fold jump in net profit to $ 226,000 on rev­enue of $ 15.2 mil­lion. But in the De­cem­ber 2007 half, the com­pany slipped to a loss of $ 408,000, on rev­enue of $ 8.4 mil­lion.

Hy­droMet Cor­po­ra­tion Lim­ited ( HMC, $ 35 mil­lion): Met­als re­cy­cler Hy­droMet has two main busi­nesses, the pro­cess­ing of used lead- acid au­to­mo­tive bat­ter­ies and the treat­ment of smelter wastes. The bat­tery re­cy­cling plant at Unan­derra in NSW pro­cesses onethird of the na­tion’s vol­ume of used lead- acid bat­ter­ies, re­cov­er­ing the lead, which is sold as shred­ded scrap metal, or used in zinc sul­phate fer­tiliser. Hy­droMet also re­cov­ers and re­cy­cles the plas­tic and acid com­po­nents of the bat­ter­ies. The smelter waste treat­ment op­er­a­tion, at New­cas­tle in NSW, treats an­ode slimes from nickel and cop­per smelters, re­cov­er­ing for sale se­le­nium ( used in agri­cul­ture and glass and pig­ment man­u­fac­ture), tel­lurium ( used in high- tech op­ti­cal ap­pli­ca­tions such as night vi­sion’ equip­ment) and pre­cious met­als.

Hy­droMet man­ag­ing di­rec­tor Gre­gory Wright­son says his com­pany has lim­ited world­wide com­pe­ti­tion’’, as con­firmed by its win­ning of a ma­jor se­le­nium/ pre­cious met­als re­cov­ery project on be­half of Fal­con­bridge Nor­way. He says there is no other re­cy­cling process avail­able’’ to smelters such as Fal­con­bridge. Hy­droMet has ap­plied for coun­cil per­mis­sion to build its own sec­ondary lead smelter at New­cas­tle. In the De­cem­ber 2007 half- year, Hy­droMet re­ported a nine­fold jump in net profit to $ 3.56 mil­lion, on rev­enue of $ 20.2 mil­lion.

Tox Free So­lu­tions Lim­ited ( TOX, $ 128.9 mil­lion). Tox Free op­er­ates pro­pri­etary ther­mal des­orp­tion tech­nol­ogy at its fa­cil­ity in Kwinana, West­ern Aus­tralia. The com­pany’s in­di­rect ther­mal des­orp­tion tech­nol­ogy is de­fined as a BDAT ( best demon­strated avail­able tech­nol­ogy), by the US En­vi­ron­men­tal Pro­tec­tion Agency, and has been ap­plied suc­cess­fully in a large num­ber of op­er­a­tions in­clud­ing the treat­ment of con­tam­i­nated soil, sludge, re­fin­ery sludge, pes­ti­cide- con­tam­i­nated soil and ma­te­rial, py­roli­sis ( de­com­pos­ing by heat­ing to high tem­per­a­ture in the ab­sence of air) of rub­ber and plas­tics, and waste to en­ergy. The tech­nol­ogy has suc­cess­fully pro­cessed used car tyres, turn­ing them back into their orig­i­nal con­stituents, be­ing car­bon black and high- calorific fuel oil. The fuel oil is suit­able for elec­tric­ity or en­ergy gen­er­a­tion and the car­bon black suit­able for re- use in the man­u­fac­ture of new tyres. For the De­cem­ber 2007 half- year, Tox Free earned net profit of $ 3.1 mil­lion, up 7 per cent, on rev­enue that dou­bled to $ 15.9 mil­lion.

Intec Lim­ited ( INL, $ 40.3 mil­lion). Intec is build­ing a plant at Hel­lyer in Tas­ma­nia to use its patented hy­dromet­al­lur­gi­cal tech­nol­ogy to ex­tract zinc, lead and sil­ver from elec­tric arc fur­nace dust, a waste prod­uct from the man­u­fac­ture of gal­vanised steel, and lead sul­phide re­cov­ered from the Hel­lyer zinc con­cen­trate project. Intec sells bulk zinc con­cen­trate to smelter cus­tomers in China, and ex­pects to make avail­able a lead sul­phide prod­uct as well. Intec owns a 20,500- tonne stock­pile of elec­tric arc fur­nace dust and a 460,000 tonne stock­pile of for­mer lead smelter residues at Zee­han, Tas­ma­nia. This his­toric stock­pile has lain idle for decades, wait­ing for an ap­pro­pri­ate tech­nol­ogy to be­come avail­able to re­cover eco­nom­i­cally the con­tained zinc, lead and mi­nor met­als. For the De­cem­ber 2007 half- year, Intec earned net profit of $ 1.2 mil­lion, on rev­enue of $ 14 mil­lion.

Anaeco Lim­ited ( ANQ, $ 15 mil­lion). Anaeco, which listed in Novem­ber 2007, has de­vel­oped a re­cy­cling tech­nol­ogy that re­cy­cles the or­ganic com­po­nent of mu­nic­i­pal solid waste into agri­cul­ture- grade com­post and bio- gas, and sep­a­rates out items such as steel, plas­tic and gas for re­cy­cling by third par­ties. The com­pany says the DiCOM tech­nol­ogy is suit­able for the cost- ef­fec­tive re­cy­cling of large- scale feed­lot ma­nures, pig­gery wastes, poul­try wastes, and other

prob­lem­atic agri­cul­tural residues.’’ Anaeco is not yet prof­itable.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.