Business: Processed and recycled ‘black bag’ household and commercial/industrial waste, converting 70% for recycling and productive use. The company utilised autoclave technology to process waste, converting the organic content (waste paper, card and vegetable matter) into a biomass-rich fibre while sorting the dry recyclables such as plastics and metals. The fibre was suitable for use as a soil conditioner or as a biomass-rich fuel for the creation of ‘green energy’.
Date of Investment: October 2005
Strategy: Ailsa3 recognised the potential of this company and took a small interest in the venture; Andy Hinton became chairman of Sterecycle in 2005.
Outcome: The Sterecycle patented system was safer, cleaner, more cost effective and more efficient than existing technologies. With the massive increases in land fill tax together with EU Directives demanding a reduction in the amount of biodegradable waste that is land filled, the Sterecycle process represented a genuine and attractive alternative to land fill.
Sterecycle completed three rounds of equity financing, raising almost £40M from major institutional investors including Fidelity and Impax. This enabled the company to open the UK’s first commercial scale autoclave treatment plant, in Rotherham South Yorkshire in June 2008. The plant became fully operational in 2008, processing 100,000 tonnes of mixed domestic and commercial wastes per annum, supported by a 6 year contract from three Local Authorities. Work commenced on further expansion in 2011 which included the construction of a front end Materials Recovery Facility (MRF) to extract greater quantities of plastics and other recyclates from the waste stream. Planning permission was granted for the addition of a CHP plant to be fuelled by the fibre created by the process. Similar planning permissions were granted on a site that the company owned in Cardiff.
Unfortunately the high costs of raising new finance, delays in commissioning the new plant, poor operational performance of the existing equipment and a dramatic fall in global recyclate prices meant that the company was forced to enter administration in September 2012.