Waste management companies Smart Environmental and Earthcare Environmental merge. Photo / NZME
Smart Environmental and Earthcare Environmental will merge, creating New Zealand’s third largest waste management company.
The companies said the move would accelerate the growth of a leading “circular economy” organization as New Zealand steps up initiatives to promote recycling and waste minimization.
The combined entity would provide collection services to more than 430,000 households in 20 municipalities across the country, as well as to more than 85,000 private and business customers.
It is also said to have a workforce of over 500 employees and contractors, and operate over 250 salvage vehicles.
In terms of customer reach and national footprint, the merged entity will be the third largest operator in New Zealand, behind the two foreign entities, Waste Management and EnviroWaste, which are owned by Chinese interests.
The merger combines Smart Environmental’s expertise in municipal recycling solutions and collection services with Earthcare’s strengths in organic waste collection and treatment, the companies said.
The merged group will be known as Smart Environmental, although the Earthcare and market brands will be retained.
Smart Environmental chief executive Todd McLeay said a key feature of the expanded organization would be its focus on recycling and diversion from landfills.
The merged group will have five material recovery facilities, but no clean landfill.
“New Zealand is moving away from a ‘throwaway’ economy, which has landfill as the default answer, to a circular approach that focuses on waste reduction, resource recovery and continued recycling.” , did he declare.
“This merger expands our collective reach and our ability to move this agenda forward quickly,” McLeay said in a statement.
He said Smart was well positioned given the important environmental regulatory changes underway that are expected to transform the waste industry – in particular a six-fold increase in the landfill tax between 2021 and 2024.
The aim of the higher tax was to reduce the amount of waste dumped in landfills, with tax funds being directed to recycling and waste minimization programs.
The merger created a significant national footprint and the scale needed to enable greater efficiency through investments in automation, reduced transportation costs and reduced emissions, McLeay said.
Earthcare founder Mike Jones said Earthcare has built a strong position in the collection and treatment of organics.
“The government is currently consulting on the emissions reduction and waste management strategy and both are making the removal of organics from disposal to landfill a priority. “
McLeay will be CEO of the extended group, while Jones will remain in the new management team and take a significant stake in the combined entity.
The majority shareholders of Smart are funds associated with New Zealand investment groups Maui Capital and Milford Asset Management.
Other shareholders include Grahame Christian, founder of Smart Environmental, and former Spark chief executive Simon Moutter, who chairs the board of Smart Environmental.
Earthcare was founded in 1989 and has grown into one of the largest green waste companies in New Zealand.
Waste Management has been the subject of media speculation suggesting that state-owned Beijing Capital Group Co is considering selling Waste Management, once listed, for US $ 1 billion ($ 1.4 billion).
Kiwi was delisted in 2006 after merging with Australian Transpacific Industries.
Beijing Capital acquired Waste Management for $ 950 million from ASX-listed Transpacific in 2014.
Around the same time, Hong Kong-based Cheung Kong Infrastructure paid $ 501 million for EnviroWaste.