Recycling firm records $194k deficit
A recycling company battling to renew its contract with three Southland councils recorded a $194,000 deficit in the 2018 financial year, but its chairman says they are on track for a surplus in 2019.
Southland’s three councils, through its combined body Wastenet, have put the region’s recycling contract out to tender instead of renewing the contract with Southland disAbility Enterprises.
The decision has caused anger in the community and an online petition has gathered more than 7000 signatures.
The major concern for many in the community is that 90 workers with disabilities at the company’s Invercargill plant face losing their jobs if the contract is lost.
A not for profit company which is owned by a charitable trust, Southland disAbility Enterprises recorded a $154 profit in 2017 and a $194,272 deficit in 2018.
Southland disAbility Enterprises Limited chairman Stephen O’Connor said a number of factors had resulted in the 2018 deficit.
The principal reasons were the disruption to the market for recycled products and a reduction in revenue earned from a Ministry of Social Development contract.
‘‘These matters have been addressed to the extent that SdE is on track to record a surplus for the current financial year,’’ O’Connor said.
‘‘We are also projecting surpluses for future years based on a satisfactory outcome of the current Wastenet tender process.’’
Wastenet has said it is faced with a significant increase in the price wanted by Southland disAbility Enterprises – how much of an increase is unknown to the public – so has opened the process up to other bidders to test the market.
Southland District Mayor Gary Tong, spokesman for Wastenet, said companies wanting to tender for the recycling contract could now do so.
He did not know if there would be any interest. ‘‘It depends on who has got the machinery, obviously Southland disAbility Enterprises has, so we expect a tender from them as well.’’
The successful tenderer would be announced in February, he said. The decision would be made through the three Southland councils on a recommendation made from representatives of Wastenet, Tong said.
Tong took a swipe at Invercargill Ratepayers Advocacy Group spokesman Nobby Clark, who wants the region’s recycling contract rolled over for Southland disAbility Enterprises.
Clark this month said the Invercargill City Council appeared to be completely disregarding the social benefit associated with renewing the Southland DisAbility Enterprises contract, given its benefits for the workers with disabilities.
Not everything the council funded should be solely based on a financial spreadsheet, he said.
However, Tong indicated Clark could not have it both ways. ‘‘Nobby Clark says the council needs to roll [the contract] over.
‘‘Three to four months earlier he is telling people council is spending too much money.’’
Clark, in response, said he had called on the Invercargill city councillors to take the lead on the issue, as the city council was the major player in Wastenet.
He reiterated that the recycling contract for Southland disAbility Enterprises should be rolled over, saying not everything was about the bottom line.
‘‘Sometimes you have to do things that aren’t the cheapest but are the best options for the community.’’