Growing interest from Chinese investors in UK waste market, Grant Thornton says

Chinese investors are showing a growing interest in the UK and European waste management market, according to a new report.

The annual waste review by London-based accountancy Grant Thornton looked into merger and acquisition activity and legislative changes within the UK waste market in 2016.

Grant Thornton noted that there were 48 completed waste deals in 2016, that’s 26 percent up from the previous year. The figure reverses the downward trend seen in 2015 when 38 deals were completed.

It found that last year there had been a shift to larger deals, with activities surpassing ￡60 million.

The largest deal in 2016 was the acquisition of Sp anish owned Urbaser by China’s Firion, estimated to be worth 2 billion pounds ($2.5 billion).

The report by Grant Thornton said the Firion deal shows the growing interest in the UK and European waste management market by Chinese investors.

It added that as well "as a number of high profile deals across Europe Chinese investors were also reportedly interest in the acquisition of Biffa before the integrated waste management group eventually completed an IPO in October 2016".

The report expects the trend to continue into 2017 and beyond "as investors are attracted by the high growth energy from waste market in Europe as well as expertise in waste treatment technologies.

There has also been reported interest from Chinese-owned German-based business EEW Energy from Waste Ltd which is looking into the UK energy from waste sector for acquisition opportunities.

Grant Thornton said, "It will be vital for waste companies to continue to innovate in service delivery, manage the value in the supply chain more effectively and explore alternative markets - whether that be into energy production or different geographical markets".

Meanwhile, between January and November 2016, just over 67 percent of the UK’s recovered plastic exports were sent directly for recycling in China and Hong Kong, down from 75 percent during the same period in 2015.

The report cited improved quality requirements for exports and the tightening of controls on imports of recovered materials to the drop.

To contact reporter: boleung@mail.chinadailyuk.com