Biggest Deal to Date for WRAP's Equipment Leasing Scheme
The eQuip scheme helps recycling businesses to lease equipment. Since its inception two years ago the scheme has guaranteed £6 million of recycling equipment.
Wastecom is a relatively new venture, started in late 2004 by Managing Director Chris Simms. Drawing on his 15 years experience in the construction and demolition industry, Chris formulated a clear business plan.
“The strategy was twofold,” he says. “First, find the right location – thereby shortening the travelling distance between the waste producers and the landfill sites. Second, have the right equipment to process the wide variety of wastes being produced.”
Finding Finance
The location was duly identified and Wastecom now occupies a 6.5 acre redeveloped site in Kettering, Northamptonshire. Bank of Scotland Corporate arranged the funding for Wastecom’s growth plans. The 28 pieces of Redox equipment backed by the eQuip guarantee form part of a total finance package worth £3.6 million.
Chris Cresswell, Asset Finance Manager for Bank of Scotland Corporate, says: “We are very pleased to have supported Wastecom in this significant project. The eQuip guarantee made the £1.1m of asset finance for the recycling line possible, allowing us to offer Wastecom the best deal.”
WRAP’s eQuip scheme enabled Wastecom to achieve its business aims at a critical juncture. The capital expenditure required to develop the site was significant and unforeseen adverse ground conditions diverted cash originally reserved for plant and machinery.
Chris Simms explains: “The members of the eQuip team fully understand the growing trend of waste management, which is something more traditional lenders sometimes struggle with. The eQuip Residual Value Guarantee enabled us to fulfil our plans for the site. It also makes capital repayments slightly less than the best commercial forms of finance available.”
Historically, banks or lease finance providers have been reluctant to provide leases for new and specialist technologies. With the residual value underwritten by eQuip, the scheme’s ten finance providers are more comfortable about providing lease deals on recycling equipment. They are also encouraged to offer more competitive lease terms and flexible repayment options.
Improved Recycling Capacity
Wastecom’s state-of-the-art recycling plant opened in November 2005. Employing 18 people, the recycling facility is capable of sorting, screening, crushing, bulking and baling and boasts a processing capacity in excess of 160,000 tonnes of waste per annum.
The Kettering facility was designed by Alfatek Partnership, in association with Redox. Managing Partner of Alfatek Simon Ingleby says:
“Companies like Wastecom are very aware of the advantages that a purpose-built facility can bring to waste sorting and segregation. However, it has not been easy for companies wanting fixed and dedicated equipment to obtain the assistance required for such a financial commitment. The WRAP eQuip scheme was therefore a valuable tool in enabling this project to be built.”
The new facility serves a range of waste-producing sectors: construction and demolition (C&D), commercial and industrial (C&I) and municipal solid waste (MSW). Customers include jobbing builders, skip companies, utility companies and the local authority. Currently, Wastecom does not run its own transport, so it has developed reciprocal arrangements with several bulk carriers who bring waste to the plant and then deliver secondary and recovered materials to end users. This significantly reduces the company’s transport costs.
Wastecom plans to recycle at least 35,000 tonnes of aggregates per year as well as household waste including glass, plastic, aluminium, steel, paper and cardboard. According to the company, the first six weeks of operation have yielded an initial recycling rate of 92% on heavy construction and demolition and 77% on commercial and industrial waste.
Future Growth
The Redox plant is just the first stage in a three-year plan to extend the site in Kettering. Planning permission has already been granted to develop an additional 40,000 square feet of space and a number of projects currently in the preliminary stages of development will further enhance the holistic approach to waste management adopted by the company.
Dr Bevis Watts, WRAP Business & Finance Programme Manager, comments:
“We are extremely pleased that we have been able to support Wastecom in leasing the recycling plant it needed. It is now the only facility of its type within a 50-mile radius and has boosted recycling capacity in the region. It is particularly satisfying that our largest single deal to date has been completed so successfully and that it is providing the basis for future growth.”
Full information about the eQuip RVG scheme and other business support services available can be obtained by calling the WRAP helpline on 0808 100 2040 or visiting www2.wrap.org.uk/business_and_finance.
Notes to editors:
- WRAP (the Waste & Resources Action Programme) is a major UK programme established to promote resource efficiency. Its particular focus is on creating stable and efficient markets for recycled materials and products and removing the barriers to waste minimisation, re-use and recycling.
- A not-for-profit company, WRAP is backed by substantial Government funding from Defra and the devolved administrations in Scotland, Wales and Northern Ireland.
- WRAP is currently running fifteen programmes. Twelve of them relate to market development, comprising nine material streams (Paper, Plastics, Glass, Wood, Organics, Aggregates, Tyres, Batteries and Plasterboard) and three generic areas (Business & Finance, Procurement, and Regional Market Development). Three further programmes relate to the wider resource efficiency remit - Collections, Communications and Awareness, and Waste Minimisation.
- More information on all of WRAP’s programmes can be found at www2.wrap.org.uk
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