Biffa

History

The business was founded in Wembley by Richard Henry Biffa in 1912.

The company, then called Richard Biffa Limited, was engaged in the removal and sale of ashes and clinker from London power stations, later adding sand and gravel and waste disposal to its operations.

In 1958 Richard Henry Biffa's 19-year-old grandson, Richard Charles Biffa joined as a general trainee with duties including tea boy, yard boy, fitter's mate, driver's mate and routing clerk.

From 1960-1963 he took over responsibility for plant operations and maintenance and was made manager in 1963.

He spent the rest of the decade building the company, now called Biffa Waste Services, by acquisition and organic growth and consolidated the company's position in the waste management market. Richard Charles Biffa is also widely credited with introducing the now ubiquitous waste skip to the UK, making Biffa a household name.

Severn Trent

The business was acquired by BET Plc, the industrial services group, in 1971 and subsequently sold to water company Severn Trent in 1991 for £212 million. After significant acquisitive growth in the 1980s, the pattern from 1991 was one of organic growth stimulated by strategic regional acquisitions as well as the large purchase of American-owned UK Waste for £380 million.

Severn Trent demerged Biffa to WasteAcquisitionCo Ltd in 2008 - this was an entity formed by Global Infrastructure Partners (GIP), Montagu Private Equity & Uberior Co-Investment Ltd (UCIL). In 2010 Biffa acquired recycling firm Greenstar UK which was run at the time by the now Biffa chief executive Ian Wakelin.

Shareholders

In early 2013 a deal was concluded with the company’s financiers which saw its debt reduced and new shareholders put in place. On November 29, 2012, it announced the terms of a proposal supported by the majority of its key senior lenders to recapitalise and strengthen the business.

Today Biffa considers it is the largest waste management company in the UK with 54,000 customers, handling hundreds of thousands of containers and having 6,000 employees.

Profitable

Mr Wakelin explained that the new owners - Angelo Gordon & Co, Avenue Capital Group, Babson Capital Europe Limited and Sankaty Advisors - will "own a very large part of a business which is very profitable and cash generating. With that debt written down we can now invest more – the company has been under invested for a number of years.”

He conceded that the business had “become a little bit hamstrung because of the debt” and that it had been bought by Montague and GIP at the peak of the market.

Going forward there will be specific investment to handle industrial and commercial with the development of dirty MRFs at a cost of about £40 million. These will be in Manchester, the North East of England, Birmingham and two in London.

UK Waste

Mr Wakelin reflected that his first involvement with Biffa really came when he was managing director of American-owned UK Waste which he joined in 1989 as finance director. He became managing director and when UK Waste was sold to Biffa, he left and went on to create recycling business Greenstar which was itself bought by Biffa in 2010. He was subsequently appointed Biffa chief executive; today, from his office at Biffa’s HQ on the Cressex estate, High Wycombe, Mr Wakelin can gaze out at his former UK Waste office.

Biffa today is a business, he says, which provides services as an alternative to its early tradition of taking waste to landfll. “We started as a very simple business taking material to landfill, then transfer stations came in with bulking of loads and these can now be developed into recycling and energy from waste preparation sites.”

In terms of the market, Mr Wakelin says that business planning expects the market to be "pretty flat but that Biffa should gain market share and so increase its tonnage". And, he noted on the municipal side that despite criticism of materials recycling facilities, the company can “sell absolutely everything we create, we have buyers in the UK and from all over the world. Providing you keep control of the front end source material can be processed and work with residents to encourage them to put out suitable material is welcomed.”

He is very clear that the waste sector cannot expect miracles in terms of the quality of recyclables put out by the general public. “You are going to get what you are going to get. Modern technology is capable of dealing with this - if we can land men on the moon, we are capable of sorting out materials. We run 1,000 vehicles and undoubtedly some will have loads which are not usable. Some are clean with material that hardly needs sorting and some are in the middle. The debate is always about the piece in the middle and why would you not recover the recyclables, too many people try do too much with the dirty piece.”

In terms of today’s Biffa, the company’s activities now are 50% in the industrial and commercial sector, municipal is 20%, 15% is landfill gas and energy from waste while, the remaining 15% comes under the “other” category which includes services such as chemical treatment.

Landfill decline slowing

Mr Wakelin conceded that “landfill is a declining business” but he doesn’t think the rate of decline is as steep as it was and believes the decline is at a slower rate than it was or some people are predicting.

He said: “Landfill gas is an incredible business. The uptime of the engines is great and the cash you throw off would dwarf the ongoing cost of the sites. Every year you can find new ways of improving the amount of gas”.

The chief executive is positive too about the municipal sector pointing out that the “top two recycling councils are ours.”

In terms of residual waste and landfill, while the previous Biffa management had courted the idea of building large scale energy from waste plants as an alternative treatment solution, Mr Wakelin said the company has no plans to do so now. Instead it will produce a refuse derived fuel which he accepted will be exported although it would be “fantastic if there was a good UK market for it”.

Safety focus

And, he emphasised that safety remains a top priority at Biffa. “Safety, everywhere you look at Biffa there is a focus on safety."

Operations

Biffa provides collection, landfill, recycling and special waste services to local authorities and industrial and commercial clients in the UK. In July 2014 it extended its services to the retail sector by converting waste for Sainsbury's, enabling the chain to take one of its stores off the National Grid.

Biffa collects around four million tonnes of waste per annum from around one million households and 75,000 industrial and commercial customers .