Pennon plans £65m plastics recycling facility as profits jump
The waste business wants to recycle 60,000 tonnes of plastic a year.
The owner behind waste management firm Viridor is set to open a new recycling plant which will be able to recycle 8% of all plastic thrown away in the UK.
FTSE 250 company Pennon said bosses will spend £65 million on the facility, which will be powered by its own nearby rubbish-burning power plant.
The site, based in Avonmouth near Bristol, will have the ability to reprocess 60,000 tonnes of plastic a year – making it the biggest plastic recycling plant in the UK.
Pennon already has 11 rubbish-burning power plants – or “energy recovery facilities” – and chief executive Chris Loughlin said the company is looking at potentially opening two more plastic recycling sites next to other plants.
The announcement comes as Pennon, which also owns South West Water, revealed that profits have jumped thanks to increased awareness and demand for recycling.
Revenues rose 6.1% to £1.48 billion in the year to March 31, with pre-tax profits up 8.3% to £259 million.
Viridor had a particularly strong period, with revenues at the division growing 8.5% to £852.7 million and pre-tax profits soaring 25% to £88.5 million.
South West Water revenues rose 1.7% to £581 million, with pre-tax profits flat at £181 million.
Mr Loughlin said strong results at Viridor were helped by high-profile campaigns about plastic pollution, often fronted by Sir David Attenborough.
He said: “Market dynamics continue to be favourable, with the ‘Blue Planet effect’ spurring action, while the Government’s recent Resources & Waste Strategy will encourage positive reform.”
Since the documentary Blue Planet II highlighted the levels of plastic dumped in the ocean, campaigners have called on the Government to introduce a plastic tax, and ministers have opened a consultation into the proposal.
Pennon’s new recycling plant will be able to re-purpose plastic waste and sell it on to companies which can then re-use it.
To maintain its green credentials, the site will be powered by the firm’s “energy recovery facility” which burns around 320,000 tonnes of non-recyclable rubbish collected from homes by Viridor.
Investors were less impressed, however, with shares falling 1.2% to 725.4p in Thursday morning trading.
On the water business, South West Water has outperformed its rivals, but bosses have still warned over its future with the Labour Party promising to re-nationalise the industry if it wins power.
But Mr Loughlin said: “We’re very mindful of the debate on Labour’s views. But companies can worry and speculate too much and lose focus on the core business. That’s something we want to avoid.”
He also warned Labour against its plans to potentially pay below-market prices for water companies as part of re-nationalisation.
“Our investors are typically UK pension funds, so if someone was thinking of giving a below-market price that would hit pension funds and would have an impact that would influence the political debate.”