The Investor - Moneyweb's monthly investment magazine Issue 4 | Page 21

INTERWASTE FINDS VALUE IN WHAT OTHERS DISCARD. In 2008 consumer goods company Unilever SA sent 151 000 tons of waste to landfill. By 2013 it had reduced this to 50 000 tons and by January this year the multinational achieved its goal of sending absolutely no general waste to a landfill site. July 2016 is the second target: zero hazardous waste to landfill. Unilever is ahead of the curve in SA. Globally the disposal of waste to landfill is frowned upon and South Africa is actively tightening legislation in this regard. This is forcing companies and municipalities to pay more attention to their waste streams. They have to. SA produced 108 million tons of waste in 2011 and less than a tenth of that is recycled. Aside from the fact that landfills are unsightly and produce toxic gases and ‘teas’, South African towns and cities are running out of space to dump their waste. (See: Pie graphs). This is creating opportunities for waste management companies like JSE-listed Interwaste. “This is a small company with lots of opportunity to grow,” says Brendon Hubbard, a fund manager at Clucas Gray, which owns 7.5% of the company. “They operate in a space in which demand for their type of essential service can only increase, where municipalities haven’t planned well.” Over the past decade Interwaste has transformed itself from a “hump and dump” operator that simply collected waste and trucked it to third party facilities, into an end-to-end integrated waste management service provider. This means investing in its own facilities – landfill sites, waste-toenergy plants, waste sorting sites, and its own fleet of 400 trucks. “This is a capital intensive process,” says group financial director André Broodryk. “We could drive earnings up tomorrow if we stopped ISSUE 4 – JULY 2015 21