Date: April 1, 2009
Source: Waste Business Journal
$56 billion Waste Industry Shows Solidarity in Tough Times, May Consolidate Further -- New report documents the magnitude of industry changes and identifies economic, regulatory and technological drivers affecting the business. Waste Business Journal estimates that 505 million tons of municipal wastes (MSW) were generated last year in the US. This was down slightly from 510 million tons in 2007 due to the economy. Collecting, processing and disposing of these wastes generated $55.7 billion in industry revenue. While MSW is said to be recession resistant, it is a product of a steadily increasing population and consumer behavior (we will always generate trash), close to 25% of the waste stream is comprised of commercial and industrial wastes from businesses. Even more vulnerable are construction and demolition debris (C&D) wastes whose volumes plummeted 15% in 2008, having fallen 7% in the year before. Despite the decline in volumes, waste management companies have managed to hold the line on pricing and actually win 4-6% increases that have helped them maintain positive revenue and earnings growth more than offsetting the loss of business. These and other vital industry statistics and analysis are part of Waste Business Journal's latest report: Waste Market Overview & Outlook 2009. The report offers a thorough examination of the various segments of the business, the major players, and the evolving nature of the industry, changing role of the private sector and changes in volumes, pricing and capacity by state and region over time, including our projections through 2013. The recent merger between Allied Waste and Republic Services (number two and three respectively) and Waste Connections' bold purchases of assets promises a reshaped industry much further along its path of privatization. The companies understand that one way to deal with turbulent economic times amidst rising fuel, labor and equipment costs is to streamline operations and vertically integrate their markets. Rising costs have focused company managers on disciplined price increases especially now that the industry is more consolidated, more attentive to return on invested capital, more rational about valuing existing landfill capacity, and mindful of lessons in the past when pricing was sacrificed. The more recent decline in fuel costs will benefit company operating margins, however the volatility of those costs implies that surcharges and hedging programs are likely to remain in place. Expect to see continued focus on controlling vehicle maintenance and insurance costs while investing in fleet upgrades and worker safety programs. Additional cash from operations will likely go towards "tuck-in" acquisitions, asset swaps and other vertical integration measures for which companies can reap immediate cost savings. 2008 was a revealing year for the recycling business. Sky high commodity pricing earlier in the year built great confidence in the long term viability of the industry when all at once falling prices were a stunning reminder of its vulnerability. Community recycling programs across the US took a big hit as the global economic downturn eroded demand and drove down prices paid for recycled materials. Some communities are likely to give up recycling programs altogether especially since once profitable programs now represent a significant expense. The collapse in the recycling market, where prices were off by as much as 75% to 100%, is a direct by-product of the financial crisis and our increasing reliance on markets in China and India, as demand has slumped for material to be converted into everything from boxes, to car parts and construction materials. Communities may begin to employ flow controls, recently granted them by the Supreme Court, to assure the viability of their recycling programs during these dire times, but are unlikely to get back into the landfill business. The high capital costs and huge economies-of-scale that attend landfills lends advantage to the private sector, especially large publicly traded companies with greater financial wherewithal and the ability to control wastes across an entire region, needed to feed larger landfills economically. As new landfills become harder to permit, more waste is moving interstate. New York City now boasts that a third of its waste moves by rail to landfills as far away as South Carolina. Now that state's legislature and that of its northern neighbor have deployed moratoriums on new landfills. Those firms with landfills can expect to wield more pricing power, likely to justify further industry consolidation. To learn more about the Waste Market Overview & Outlook 2009 which costs $595 US, Visit: http://www.wasteinfo.com/overview.htm. Or, call (619) 793-5190. Waste Business Journal publishes newsletters, directories and reports, and performs customized research for the waste management industry. WBJ has served this industry for over seventeen years, during which time, the company has accumulated through direct survey and other means a great deal of historical and current industry economic data. Using its proprietary database of waste disposal facilities and companies, WBJ staff regularly analyze waste disposal trends including volumes, prices, and capacity and publishes these findings in a number of its regular reports (available in print and on-line). Table of Contents (Abstract) 1.1 Recent Events 1.2 Economic Outlook 1.3 History 2.1 Industry Overview: Size and Segments 2.2 Industry Overview: Total Generation, Recovery & Disposal 2.3 Collection Markets 2.4 Processing Markets 2.5 Disposal Markets 2.6 New Disposal Technology 2.6.1 Bioreactors 2.7 Landfill Development and Operating Costs 2.8 Incinerator Operating Costs 2.9 Waste Management Market Dynamics and Geographic Distribution 2.10 Movement of Waste and Attempts to Control its Destiny 2.10.1 Flow Control 2.10.2 Waste by Rail 2.10.3 Interstate Waste Movement 2.11 Waste Processing and Disposal Volume by Region 3.1 Top Solid Waste Management Companies 3.2 Leading Firms in Waste to Energy 3.3 Industry Mergers and Acquisitions 3.4 Municipal Solid Waste Authorities 4 Landfill Capacity 5 Pricing 6 Materials Recovery 6.1 Market Review 6.2 Resource Recovery Market 6.3 Paper Recycling 6.4 Plastic Recycling 6.5 Aluminum Recycling 6.6 Steel Recycling 6.7 Glass Recycling 6.8 Largest Recycling Companies 7 Other Solid Waste Management Segments: Special And Industrial Wastes 7.1 Scrap Tire Recycling 7.2 Construction & Demolition Debris Disposal And Recycling 7.3 Food Wastes 7.4 Yard Waste and Composting 7.5 Wood Wastes 7.6 E-Wastes 7.7 Landfill Gas 7.8 Biomass 7.9 Waste-To-Ethanol 7.10 Autoclaving 7.11 Gasification and Pyrolysis 7.12 Plasma-Arc 7.13 Lamp Recycling 8 Strategies for Success 9.1 Waste Management Equipment Market 9.2 Waste Management Equipment Company Profiles For more information, contact: Waste Business Journal James Thompson or Ian Trueblood (619) 793-5190 info@wastebusinessjournal.com http://www.wasteinfo.com.Sign up to receive our free Weekly News Bulletin