2002 February - Steve Davies - Waste Management Multinationals 2002

Public Services International Research Unit (PSIRU)
Waste management multinationals 2002
By Steve Davies
Senior Research Fellow, School of Social Sciences, Cardiff University
February 2002
Public Services International Research Unit (PSIRU)

School of Computing and Mathematical Sciences, University of Greenwich, Park Row London SE10 9LS U.K.
Email: psiru@psiru.org Website: www.psiru.org Tel: +44-(0)208-331-9933 Fax: +44 (0)208-331-8665
Director: David Hall Researchers: Kate Bayliss, Steve Davies, Kirsty Drew, Jane Lethbridge, Emanuele Lobina, Steve
Thomas, Sam Weinstein
The PSIRU is part of the School of Computing and Mathematics in the University of Greenwich, London. PSIRU’s
research is centred around the maintenance of an extensive and regularly updated database of information on the
economic, political, financial, social and technical experience with privatisation and restructuring of public services
worldwide. This core database is financed by Public Services International (PSI), the worldwide confederation of
public service trade unions. www.world-psi.org
PSIRU psiru@psiru.org 29/06/2023
1. Introduction ................................................................................................................................................................... 4
2. The main companies ..................................................................................................................................................... 4

A. 2000 turnover of European-based companies............................................................................................................ 4
B. 2000 Turnover of top US companies ......................................................................................................................... 5
3. Developments among the multinationals .................................................................................................................... 5

A. Onyx .......................................................................................................................................................................... 5
B. Sita ............................................................................................................................................................................. 6
C. RWE Umwelt............................................................................................................................................................. 7
D. Cleanaway ................................................................................................................................................................. 8
E. Rethmann ................................................................................................................................................................... 8
F. Shanks ........................................................................................................................................................................ 8
G. Biffa ........................................................................................................................................................................... 9
4. Selected developments by region ................................................................................................................................. 9

A. North America ......................................................................................................................................................... 10
 Retreat of the US multinationals ..................................................................................................................... 10
 Onyx now No 4 in the USA ............................................................................................................................ 10
 Sita enters the US hazardous industrial waste market..................................................................................... 10
B. Europe ...................................................................................................................................................................... 10
 Big UK push towards incineration offers large long-term contracts for multinationals ................................. 10
 Cleanaway Germany sees PPP opportunities in 2002 after profits slip in 2001 ............................................. 11
 Sita sets up joint venture in Poland ................................................................................................................. 11
 Onyx wins multi-million UK municipal contracts .......................................................................................... 11
 Further UK expansion for Sita ........................................................................................................................ 11
 Onyx claims ‘lead position’ in Scandinavia .................................................................................................... 12
 Sita gains ground in Sweden ........................................................................................................................... 12
 Onyx and Sita battle for market share in the Czech Republic and Slovakia ................................................... 12
 UK call for waste regulator ............................................................................................................................. 13
 Sita buys large Dutch municipal waste company............................................................................................ 13
 Vivendi Environnement gains its first multi-utility municipal contract.......................................................... 13
 Sita alliance with Rhodia pays off in Spain .................................................................................................... 14
 RWE expansion in Europe .............................................................................................................................. 14
 Sita claims over 12 per cent of UK market ..................................................................................................... 14
 Cleanaway gains in UK ................................................................................................................................... 14
 Sita humiliated in Brighton (UK) .................................................................................................................... 14
C. Asia-Pacific .............................................................................................................................................................. 15
 Rethmann accused, then cleared of corruption - but still pays AUS$250,000 ................................................ 15
 Onyx builds a platform in Asia with China as the prize ................................................................................. 15
 Sita becomes No. 2 in Australia ...................................................................................................................... 16
 Cleanaway consolidates position in Australia and expands to New Zealand ................................................. 16
 Waste Management New Zealand aims to be regional player ........................................................................ 16
D. Latin America .......................................................................................................................................................... 16
 Onyx’s Mexican business hit by downturn ..................................................................................................... 16
 Sita continues growth in Brazil ....................................................................................................................... 16
 Sita restructures in Argentina .......................................................................................................................... 17
E. Africa and the Middle East ...................................................................................................................................... 17
 Onyx active in North Africa ............................................................................................................................ 17
 Vivendi in multi-utility deal in Iran ................................................................................................................ 17
5. Trends .......................................................................................................................................................................... 17
A. A new environmental services industry? ................................................................................................................. 17
 The Vivendi model of the multiservice future ................................................................................................ 17
 The Suez model of the multiservice future ..................................................................................................... 18
B. Possibilities for expansion in the waste management market.................................................................................. 19
2002-01-Gb.doc Page 2 of 34
 Privatisation estimates for municipal waste management in key markets ...................................................... 20

 The United States market – the target for the European invasion ................................................................... 20
Financial Data for the US Solid Waste Industry ............................................................................................. 20
Proportionate size of public and private sectors in US waste industry (a) ...................................................... 21
Proportionate size of public and private sectors in US waste industry (b) ..................................................... 22
 Expansion outside the USA............................................................................................................................. 22
Global Environmental Market Growth............................................................................................................ 22
Global Environmental Markets by Region (1998) .......................................................................................... 23
Global Environmental Markets split by Environmental Sub-sector ............................................................... 23
Global Market Forecasts to 2010 .................................................................................................................... 24
Value of EU Eco-Industry by Member State .................................................................................................. 25
Germany .......................................................................................................................................................... 25
United Kingdom .............................................................................................................................................. 25
Central and eastern Europe.............................................................................................................................. 26
Total waste generated (tonnes/capita) in 1995 and 1999 in selected central and eastern European countries 26
Latin America .................................................................................................................................................. 27
Asia-Pacific ..................................................................................................................................................... 28
6. Industrial relations implications ................................................................................................................................ 28

A. Dangers of job losses as ‘synergies’ follow consolidation ...................................................................................... 28
B. The continuing threat of privatisation ...................................................................................................................... 28
C. Potential for international union co-operation ......................................................................................................... 28
 European Works Councils ............................................................................................................................... 29
 National co-ordination as part of an EWC ...................................................................................................... 29
 Global representation ...................................................................................................................................... 29
 International solidarity .................................................................................................................................... 30
7. Annex 1: EPSU Resolution on European Works Council Coordinators Network ............................................... 30
1. Introduction
The waste management industry worldwide is dominated by a relatively small number of companies. It is
also an industry in flux. Just a few years ago, the huge American companies were market leaders in almost
every part of the world. Today, the situation is very different. The US multinationals have withdrawn from
everywhere except North America and their place has increasingly been taken by European-based
multinationals.
However, the sheer size of the US market means that these American companies are still larger than their
European rivals. It also illustrates the scale of the task facing the European multinationals if they wish to
challenge the US companies on their home turf and make gains in the lucrative American market.
The market worldwide is fairly well developed in Europe, North America and parts of the Asia-Pacific
region, but most of the larger companies see plenty of scope for expansion – even in the relatively
competitive markets of Europe and North America.
There are a number of reasons for the largest companies’ optimistic view of potential growth:
➢ environmental pressures (both public and legislative) for improved standards of waste management;
➢ the continuing drive towards privatisation throughout the world;
➢ the similar (and related) push for outsourcing of ‘non-core’ operations in large private sector
concerns;
➢ and the growth of market opportunities in developing and transition economies.
There is also likely to be a continuation of the process towards industry concentration as the major
multinationals are better placed to bid for the larger projects that are increasingly favoured in Europe and
North America.
Those waste companies that are part of multi-utility groups believe themselves to have an additional
advantage in that they can offer integrated utilities service contracts to large industrial customers.
2. The main companies
In 1997, the UK government’s Joint Environment Markets Unit (JEMU) commented that the global
environment market (which includes water and wastewater) “exhibits many characteristics typical of an
immature industry”.1 As evidence of this the JEMU pointed to the fact that there were few global players. It
noted that there were signs of ‘maturity’ in the waste management sector with the emergence of some global
players.
However since that report was written, two of the genuinely global players - WMI and BFI (now Allied
Waste) – no longer operate globally and of the other major waste multinationals, only Sita and Onyx could
be described as genuine global players.
Cleanaway and Rethmann are active in both the European and Asia-Pacific markets but RWE, Biffa and
Shanks are, so far, confined to Europe.
A. 2000 turnover of European-based companies
Company Parent Home Turnover Area of operation

country (€million)
Onyx Vivendi France 5,260* Europe, North

Environnement America, Asia-
Pacific, Latin
America, North
Africa, Middle East.
Sita Suez France 5,030** Europe, Asia-Pacific,
Latin America,
Middle East, North
Africa.
RWE Umwelt RWE Germany 2,045 Europe
Cleanaway Brambles Australia 1,350*** Asia-Pacific and
Europe
Rethmann Rethmann Germany 936 Europe, Asia-Pacific,
Shanks Shanks Group UK 814**** Europe
Biffa Severn Trent UK 642**** Europe
Sources: PSIRU database, company annual reports

* does not include results of FCC
** includes results of Watco and EdS
*** converted from AUD at a rate of 1 AUD = 0.582627 EUR (15 January 2002)
**** converted from GBP at a rate of 1 GBP = 1.62110 EUR (15 January 2002)
B. 2000 Turnover of top US companies
Company Parent Turnover

($million)
Waste Management Inc Waste Management Inc 12,492

Allied Waste Industries Allied Waste Industries 5,708
Republic Services Republic Services 2,103
Onyx* (after acquiring US Vivendi Environnement 1,650
no 4, Superior in 1999)
Sources: PSIRU database, Hoovers, Vivendi 2001 Year end overview.

* Figures for Onyx show US turnover only.
As the value of one dollar is roughly equal to one euro, it is possible to see the relative size of the European
and American companies from the two tables above. Despite being active only in North America, WMI and
Allied Waste are still the largest waste management companies in the world (measured by turnover).
As can be seen from the table, this position of dominance in North America is, for the first time, beginning
to be threatened by the Europeans, particularly Onyx.
3. Developments among the multinationals
A. Onyx
Onyx is the waste management division of multi-utility Vivendi Environnement (itelf a subsidiary of
Vivendi Universal). During 2001 Vivendi Universal ‘clarified’ the structure of its financial holding in
Vivendi Environnement (VE) and disposed of 9.3 per cent. This still leaves Vivendi Universal holding 63
per cent of VE, something it expects to maintain.2
VE signalled its desire to be a major player on both sides of the Atlantic by listing its shares on the New
York Stock Exchange in October 2001.3
Through Onyx and VE’s participation in Spanish company FCC, the company claims to be the largest waste
management company in Europe and the third largest in the world:
• provides waste management services to 70 million people on five continents;

• has waste management contracts with approximately 4,000 municipalities;
• has contracts with 250,000 industrial clients;
• own or operate approximately 120 sorting, recycling and transfer facilities (not including waste
paper facilities), 119 solid waste landfill sites and 83 incineration and waste-to-energy
transformation facilities worldwide. The company owns approximately two-thirds of the solid waste
landfill sites it operates.4
Although its principal markets are in Europe and North America, it also operates in the Asia-Pacific region
and in Latin America. The company conducts waste operations in Latin America through Proactiva, a 50/50
joint venture with FCC. 5 The company has consolidated most of its waste management business in the
region into Proactiva.
Vivendi Environnement has identified the group’s strategy as follows:
➢ Leverage our expertise, leading market positions and strong financial position to deliver strong
internal growth;
➢ Develop unique, integrated, multi-service offerings;
➢ Achieve and maintain "best-in-class'' performance in each of our business segments by investing in
technology and personnel;
➢ Seize opportunities arising from our worldwide reach
➢ Focus on high value-added environmental services;
➢ Make opportunistic acquisitions to expand our service offerings and geographic reach 6
Onyx has continued to play a major role in waste management in France (with new contracts in Paris and a
20 year construct and operate contract for a waste-to-energy plant in Saumur) and to expand elsewhere.
Throughout the period 2000-01, it made acquisitions in the Czech Republic, Slovakia, Denmark, Germany,
Norway, and bought WMI’s operations in Hong Kong, mainland China and Mexico.
It won important contracts in Görlitz (Germany), Sheffield, Bromley in London, Singapore, Taiwan,
Morocco, Alexandria (Egypt), Florida. Contract gains included those for large industrial customers like
Novartis7 and Usinor in Brazil.8
There have been some setbacks. The economic downturn has hit hazardous waste volumes, particularly in
the USA9 and the company has expressed concerns about the impact of falling paper prices on revenues.10
B. Sita
Parent Suez reorganised all its waste management operations under Sita (with effect from January 2001).
This resulted in Watco and EdS, subsidiaries of the Fabricom group, being brought together with Sita’s own
subsidiaries.
After the integration of Watco and EdS, Sita describes itself as No. 1 in Europe and No. 4 in the world. It
claims that the company:
▪ is present in 31 countries
▪ serves more than 74 million inhabitants
▪ operates 277 landfills, 14 000 vehicles, 85 composting sites, 71 incinerators, 220 sorting centres
▪ with 70 000 employees
▪ and 330,000 industrial and commercial clients
Suez has identified its waste strategy as follows:
• Expand waste treatment in countries where Sita already collects waste, and increase this activity’s
contribution to Sita revenues
• Consolidate leadership in Europe and continue to expand into growth markets where the Group
seeks critical mass11
As part of its policy of integrating its operations more closely, it created Sita Recycling in March 2001 to co-
ordinate the marketing of raw materials from sorting activities. It is based in Belgium.12
The company continued to make acquisitions in 2000-01. These included major operations in Sweden and
Australia bought from Waste Management Inc13, the Netherlands, the UK and a new development in the
USA with the creation of Teris LLC. The company also continued to win large municipal contracts such as
those in the UK (Bristol), Lyons and Catalunya and large industrial contracts such as General Motors
Quebec, Saab in Sweden, Ford Valencia and General Motors Powertrain in Strasbourg.14
Suez signalled its seriousness in competing in the USA by a listing on the New York Stock Exchange.
Trading commenced on September 18, 2001. During the first half of 2001, Suez generated more than 10 per
cent of its revenue in North America. This included contributions from Sita and its hazardous waste
subsidiary Teris LLC.15
C. RWE Umwelt
RWE Umwelt is the waste management division of RWE. It claims to be the leading waste management
company in Germany and the third in Europe. This effectively means that outside the USA, it is the third
largest waste company in the world.
The company’s parent RWE, has been engaged in an aggressive policy of expansion and rationalisation to
transform itself into a multi-utility. It has been involved in two major merger/acquisitions in the last two
years.
First it merged with VEW and then took over Thames Water. The group was restructured to take into
account that it is now a multi-utility with important operations in energy, waste and water.
Following the Thames acquisition, Thames Waste Management was placed under the RWE Umwelt
operating management company.
The waste management companies that formed part of the Edelhoff Group (and came with the merger with
VEW) are now being integrated into RWE Umwelt.
As well as the major acquisitions and mergers referred to above, the company also developed its waste
operations in Germany, central and eastern Europe through acquisitions, increasing the size of already
existing shareholdings and by gaining new contracts. It has a presence in Germany, Austria, the UK, Spain,
the Czech Republic, Poland and Hungary.
The company’s strategic aims fall into two geographic parts:
➢ Within Germany, regional consolidation and expansion of the basic business (domestic, industrial,
and hazardous waste, recyclable packaging materials). The company also lays great stress on the
expansion of public-private partnership operations;
➢ Elswhere in Europe, RWE Umwelt intends to expand its existing business operations in the markets
currently targeted. Additional national markets are to be opened up as part of the RWE Group´s
internationalization strategy.16
D. Cleanaway
In 2001 Cleanaway’s parent, Australian company Brambles, restructured itself with a merger of the former
industrial services unit of GKN and Cleanaway, CHEP and Recall. The ‘new Brambles’ was registered both
in London and Sydney.
Cleanaway claims to be the clear market leader in Australia, one of the top three waste management
companies in the United Kingdom, and with a significant market position in Germany. The company’s
position in Germany is partly based upon the acquisition of WMI’s German operations in May 2000.
During 2001, Cleanaway acquired Serviceteam in the UK. As a result, Cleanaway’s UK municipal waste
business has trebled in size.
The company also entered the New Zealand market for the first time.
Cleanaway believes that its prospects for growth are highly promising. In his address to the Annual General
Meeting in November 2001, the company’s chairman explained: “Increasing environmental awareness
throughout the world is leading to a growth in the demand for recycling and recovery services as well as the
traditional waste collection and disposals”.17 He pointed out that the hazardous waste market was affected by
the economic downturn but that Cleanaway was not involved in that sector.18
E. Rethmann
Rethmann is the largest family-owned firm in the world waste management business. It is the second largest
waste company in Germany and fourth in Europe.
The company’s focus is mainly on Europe (Austria, Belgium, the Czech Republic, France, Germany,
Hungary, the Netherlands, Poland, Slovakia, Switzerland and the UK) but it also has operations in the Asia-
Pacific region as well (Australia, China, Japan, Malaysia and Taiwan).
In July 2001, it announced its ‘satisfaction’ with the results of its last financial year, saying it achieved a
profit in each of its three business areas (refuse, recycling and logistics).
The company said that it also expected to do well in the current financial year. In the first five months its
waste disposal division grew by €27 million to €936 million.19
It has recently won a large contract in the Phillippines. Rethmann is part of a consortium that won the
contract for the design, financing, construction, operation, maintenance, monitoring, closure and post-
closure of a sanitary landfill for solid waste disposal in Metro Manila and host municipality Pililla, Rizal. 20
In Australia the company was involved in allegations over corruption concerning its contract with Liverpool
City Council in Sydney. Although cleared of corruption it still had to pay a substantial fee to the council in
excess tipping fees and investigation costs.21
F. Shanks
Shanks has operations in the UK, Belgium and the Netherlands. Although the company has a presence in the
full range of waste management operations (including collection, transport, recycling and treatment) it has
chosen to take a particular focus on hazardous waste and is heavily involved in incineration facilities.22
The company is currently having some problems. Profits fell in the first half of the 2001-02 financial year.
Around half of the group’s profits come from UK operations and these have been hit by what the company
describes as “the depressed state of the UK hazardous waste market”. The company also suffered losses on
its Belgian contracts.
On the other hand the company has made gains due to it holding large contracts for the disposal of Meat and
Bone Meal waste from the BSE crisis. It also had good interim results in the Netherlands and in its UK
waste services, partly as a result of the disposal of waste from the foot and mouth crisis.
In fact chief executive Michael Averill, said that, but for the contribution from the foot and mouth disposal
business, Shanks would not have been able to show an improvement on last year's second-half results.23 The
company was involved in transporting the carcasses of pigs and sheep to landfill sites. It was also contracted
to move large amounts of ash, from the pyres of cattle carcasses, to landfill sites.
Shanks has been awarded a number of significant UK contracts (such as a 25 year PFI contract in Argyle
and Bute, and a three year contract in Falkirk). The company believes that the full impact of the landfill
directive will assist its growth,24 as more waste is incinerated in order to meet the government’s landfill
targets.
Shanks is banking on changes to European rules on the disposal of hazardous waste and new local authority
contracts along with further expansion of its growing electricity from landfill gas business to help growth.25
G. Biffa
Biffa operates in the UK and Belgium.
In its first half results for 2001/02, Biffa reported that its profits more than doubled over the same period in
the previous year, largely as a result of the acquisition of UK Waste in September 2000. However the
company emphasises that despite this, Biffa still achieved 11 per cent underlying profit growth in the UK.
And the company benefited from the foot and mouth crisis - profits in its landfill division rose by nearly 150
per cent.
The company’s Belgian operations were less impressive with profits down by £1.2m. According to Biffa,
this was due to problems in the collection division and a sharp increase in disposal costs as restrictions on
the use of Flemish landfill sites forced the company to use more expensive options of disposal.
Parent Severn Trent says that £15m in savings will be achieved once the UK Waste business has been fully
integrated by the end of the financial year.26
Although Biffa does not operate solely in the UK, around 90 per cent of its turnover is accounted for by its
British operations. The company is optimistic about its UK operations and describes the UK as “the most
attractive waste market in Europe”27 This is largely due to the opportunities presented by the UK’s need to
move away from its over-dependence on landfill for disposal of waste. Biffa sees itself as well positioned to
take advantage of the expected rise in recovery, recycling and waste treatment as the UK moves from 85 per
cent of waste going to landfill to the government’s target of 35 per cent by 201028.
4. Selected developments by region
A. North America
 Retreat of the US multinationals
Strictly speaking, there has been a decline in the activities of waste sector multinationals in North America
(or at least the USA). This is because the two giant companies that previously dominated the world market
have withdrawn to their American base.
As Waste Management Inc and Allied Waste (which took over BFI, formerly world No. 2) no longer operate
outside North America, they are effectively extremely large national companies.
Republic, the third largest US waste company never did operate worldwide. Over the last five years WMI
and Allied have sold all of their overseas operations.
 Onyx now No 4 in the USA
Thanks to the 1999 acquisition of Superior Services, Inc., Onyx North America now has an important
position in the region.
In 2000, Onyx also acquired the remaining stake held by Waste Management in Advanced Environmental
Services (AES), their joint-venture company in the United States. AES operates in the industrial services and
special industrial waste treatment sectors. Prior to the transaction, Onyx held a 51 per cent stake in AES.29
With further acquisitions from Allied Waste and some smaller purchases, Onyx has now built a
comprehensive waste management holding in the USA, which it intends to build upon.
It is involved in collection, transfer and disposal (through Superior), waste to energy (through Montenay
Inc), special industrial waste (through Onyx Environmental Services) and industrial cleaning (through Onyx
Industrial Services).30
 Sita enters the US hazardous industrial waste market
In 2001 Sita acquired what parent Suez describes as a ‘strategic position’31 in the US hazardous industrial
waste sector. It set up a new joint company (Teris LLC) with Rhodia and bought Ensco from Brambles.
Suez claims that this now makes it No 3 in the hazardous industrial waste sector.
Perhaps more importantly the company sees the acquisition as part of its multi-utility approach to industrial
customers in the enormous American market.
B. Europe
 Big UK push towards incineration offers large long-term contracts for multinationals
In its attempt to meet obligations under the Landfill Directive, the UK government is effectively
encouraging the large-scale building of incineration plants. This is seen as the only short-term answer to the
need to move away from landfill (around 90 per cent of UK waste is landfilled). Many of the incineration
facilities are part of ‘integrated’ waste management projects and attract government assistance through the
Private Finance Initiative.
2002-01-Gb.doc Page 10 of 34
These projects are extremely attractive to some of the large waste management companies as they are
usually long-term contracts (25 years) and multi-million operations. They are already generating opposition
from environmental groups and others concerned about both cost and the negative impact on recycling 32.
The UK Audit Commission warned that “twenty-five year contracts need critical consideration. For
example, technology is constantly developing and it would be counter-productive if authorities were held to
a contract for one method of disposal when a more environment-friendly and cost-effective method is
subsequently developed.”33
The Commission pointed to the fact that a number of PFIs in waste under consideration involve the building
of an energy from waste plant, and referred to a House of Commons Select Committee view that incineration
should play only a ‘moderate role’ in PFI bids, with PFI being used for long-term improvements in recycling
and composting. The Committee explained: “If not, we recommend that the role of PFI funding for waste
management should be progressively reduced”.34
 Cleanaway Germany sees PPP opportunities in 2002 after profits slip in 2001
Cleanaway believes that the high value German waste management market will offer attractive privatisation
opportunities in 2002. Having successfully integrated WM Deutschland which it bought from WMI in May
2000, the company expects to make gains in the next year.
The company hopes that this will make up for the dent in profits felt as a result of lower recycled paper
prices in 2001 compared with 2000.35
 Sita sets up joint venture in Poland
Sita Polska, which claims to be No 1 in the Polish waste market, has set up a company in conjunction with
DSI, a KGHM subsidiary, a primary copper producer36. KHGM describes itself as Poland’s third leading
industrial group. The arrangement is designed to enhance Sita’s range of services on offer in Poland and to
take advantage of the environmental changes necessary for Polish EU entry.
Sita has also re-organised its Polish subsidiaries, regrouping all of the EdS companies under Sita Polska.
 Onyx wins multi-million UK municipal contracts
In 2001, Onyx announced that it had been awarded two major municipal contracts in the UK. Onyx Aurora
together with Dalkia (Vivendi Environnement’s energy services subsidiary) have been chosen to manage
and develop the City of Sheffield's waste collection and disposal activities over the next 30 years.
The contract is worth £1.3 billion including energy sales, and is an example of Vivendi Environnement
using its multi-utility facility to bundles services together in one contract.37
In August, Onyx announced that it had gained a £150 million waste management contract with the London
Borough of Bromley, the largest of the London municipalities. The collection contract is for seven years and
the disposal contract is for fourteen years.38
 Further UK expansion for Sita
2002-01-Gb.doc Page 11 of 34
Through its subsidiary MIREC, SITA has acquired Frazier International39, a UK company that specialises in
refurbishing and reselling high-tech office equipment. Electronics recycling company MIREC is based in
Eindhoven in the Netherlands.
Frazier International is based in Dumfries in Scotland and its main services include the recovery,
refurbishing and re-marketing of second user ICT (Information and Communication Technology)
equipment. The company's annual turnover is around £10 million and it employs 140 staff.
 Onyx claims ‘lead position’ in Scandinavia
A number of acquisitions in Scandinavia have improved the position of Onyx. It now claims to be regional
‘leader’ in Scandinavia following the deals involving Danish company, Marius Pedersen and the acquisition
of Norsk Gjenvinning in Norway at the beginning of 2000.
The alliance with Marius Pedersen involves the creation of a joint company 65 per cent owned by Onyx and
boosts the presence of Onyx in Sweden and Denmark.40
 Sita gains ground in Sweden
In 2001 Sita reorganised its Swedish assets after making further acquisitions in the country, creating a new
unit - SITA Sverige AB. It brought together Miljöservice, acquired by Sita in 1996, with WM Sellbergs,
acquired from WMI by Miljöservice at the end of 2000 in partnership with the energy company Sydkraft
(which holds a 9 per cent stake in SITA Sverige).
In January 2000, Miljöservice made a 100 per cent acquisition of Stockhom Miljötransport from the
Stockholm municipality.
The company claims that the new unit is now No. 2 in Sweden's non-hazardous waste market with €154
million proforma revenues and 1,000 employees. Its assets include over 1,000 vehicles, 8 waste storage
facilities, 3 transfer stations, 8 industrial and business waste sorting facilities, and 2 residential waste sorting
centers.41
This strengthening of its position in Sweden followed earlier moves elsewhere in Scandinavia in which Sita
took a 58 per cent stake in Denmark’s No 3 rubbish collector, Renoflex.42
 Onyx and Sita battle for market share in the Czech Republic and Slovakia
The Onyx/Marius Pedersen alliance also draws together the operations of both partners in the Czech
Republic and Slovakia.
The company has been involved in other acquisitions too, such as the March 2000 deal giving subsidiary,
IPODEC ONYX Bohemia, a majority holding in the Czech company PAPKOV. This acquisition gives
Onyx a countrywide presence and means it can provide a more extensive range of services, notably to
industry and supermarkets, while having an outlet for recyclable materials43.
As a result of the Marius Pedersen alliance and acquisitions like PAPKOV, Onyx now claims to be the
leading waste management company in both the Czech Republic and Slovakia.
Meanwhile Sita has also been making gains in the area. In July 2001, it bought the Czech Republic’s fourth
national waste management operator, Recycling Park (RCP). It has reorganised its Czech operations
bringing together RCP with EdS-Cz and grouped them altogether under the name of Sita Cz.
2002-01-Gb.doc Page 12 of 34
Sita now claims to have a presence in all the Czech Republic’s main cities and to be able to offer a full range
of waste management services. It also now claims to be the country’s No. 2 operator.44
 UK call for waste regulator
The new president of the UK Institute of Wastes Management (IWM) has warned of local cartels and the
need for a regulator in the UK waste management industry.
IWM president Dr Cathy O’Brien, caused a stir at the 2001 IWM conference with her call for a waste
management industry regulator, and claims that the industry was fragmented and short-term in its approach
to waste planning,
She also said that some companies were operating “local monopolies” and unfairly forcing up prices charged
to local authorities for waste disposal.
Dr O’Brien argued that the creation of a waste industry financial regulator could also help in parts of the
country where prices were too low and consequently discouraged investment in recovery routes such as
recycling. This has been taken by some observers as an oblique reference to the practice of loss leaders.
Dr O’Brien pointed out that: “Setting a minimum and maximum gate price for each type of method of waste
management solution could help the financial planning for future facilities…”
The call for a financial regulator for the industry is unlikely to be a popular one with the waste management
companies. One ‘senior waste industry figure’ told the letsrecycle.com web site that this was "tantamount to
market interference and could lead to serious concerns about long-term investment."45
 Sita buys large Dutch municipal waste company
In November 2000 Sita announced that it had been awarded the tender to acquire municipally owned waste
company, ARA in the Netherlands.
ARA provides services for 200,000 residents in the Arnhem region. The five municipalities that owned the
company decided to sell due to rising operating costs.46
 Vivendi Environnement gains its first multi-utility municipal contract
On 27 April, 2001 Vivendi Environnement announced that it had been selected to operate all of the
municipal services of Görlitz, Germany. The Görlitz city council agreed to a proposal made by Vivendi
Environnement's German subsidiaries for the partial privatisation of its Stadtwerke.
The company claims that this is the first time the complete management of a Stadtwerke (municipal services
company), covering all the municipal services, has been outsourced to a non-German European Group.
Vivendi Environnement paid DM108 million for 74.9 per cent of the Stadtwerke's capital stock.
The company argues that it was able to win the approval of the privatisation committee and city council by
stressing the integrated "multiservices" approach proposed, emphasising Vivendi Environnement's activities
in water and wastewater services, energy services, local transportation and waste management.
Vivendi Environnement operates in Germany through its subsidiaries OEWA, Vivendi Water's German
subsidiary for water management, Dalkia for energy services, Onyx for waste management and Connex for
transportation.
2002-01-Gb.doc Page 13 of 34
 Sita alliance with Rhodia pays off in Spain
Through Teris, a joint enterprise with Rhodia, Sita gained a large 15 year hazardous waste contract in
Catalunya. Revenues from the contract are expected to be €15 million a year and to increase as volumes of
waste rise.
 RWE expansion in Europe
In July 2001, RWE announced that with its 50 per cent owned subsidiary, Trienekens, it was taking over
Remex – a German company operating mainly in construction waste management and recycling.47
In 2001 in Poland, the company increased its stake in WPO, the Wroclaw municipal cleaning enterprise,
from 63 per cent to 79 per cent.48
In 2000-2001 RWE subsidiary, Edelhoff Environmental Services GmbH, developed a waste management
scheme for the German contingent to the Macedonian and Kosovo KFOR force.49
 Sita claims over 12 per cent of UK market
Sita now claims to have 12.2 per cent of the UK waste management market. This follows a series of large
contract awards and acquisitions.50
The company gained a 25 year Private Finance Initiative contract in Gloucestershire and a seven year €121
million waste management contract in Bristol.
Towards the end of 2000, Sita bought City Waste in Birmingham in the UK, and in January 2002 announced
that it had taken over Frazier International, a specialist in refurbishing and reselling high-tech office
equipment. The acquisition was made by Sita subsidiary, Mirec (an electronic recycling company based in
the Netherlands).
 Cleanaway gains in UK
When Cleanaway bought Serviceteam, it also bought contracts with 80 municipalities. The company is using
this as a springboard to increase its market position in the UK.
It has already won new contracts from Hackney and Birmingham councils, has begun the construction of a
large Material Recovery Facility (MRF) in Rainham and has won a number of new contracts from industrial
customer like BAe Systems.51
 Sita humiliated in Brighton (UK)
As well as making gains in 2000-01, Sita also faced setbacks. In Britain it was thrown out of a large
municipal contract in Brighton because of persistent quality failures and breaches of contract, culminating in
industrial action.52
At one point complaints about poor quality service reached 700 a day. Local media alleged that Sita had
deliberately underbid in order to win the contract. The Brighton and Hove Argus commented: “The root of
the problem is that Sita took on the contract at too low a price. Each time it tried to break even, it fixed
routines for the staff which they considered impossible. It is said to be losing £4 million a year on the
Brighton and Hove contract, a figure which even a refuse giant such as Sita must find unsupportable.”53
2002-01-Gb.doc Page 14 of 34
Strike action over pay and conditions changes took place and eventually Sita were removed from the
contract by the local council and had to pay £3 million in compensation.
This followed complaints about Sita’s poor performance in other UK contracts (in Dudley, Slough, Oldham
and South Gloucestershire54)
C. Asia-Pacific
 Rethmann accused, then cleared of corruption - but still pays AUS$250,000
In Australia Rethmann was involved in allegations over corruption concerning its contract with Liverpool
City Council in Sydney.
Between 1992 and 2000, a series of practices developed that resulted in Liverpool Council being wrongly
charged tipping fees for the disposal of commercial waste by Rethmann. The company was cleared of
corruption but paid almost AUS$250,000 to the council in excess tipping fees and investigation costs.55
Rethmann was cleared because the Independent Commission Against Corruption (ICAC) found that the
employee concerned was dumping the waste materials for his own convenience, and did not receive
inducements for doing so. The investigation also found that Rethmann failed to provide new waste
receptacles as required by its contract with Liverpool Council. Rethmann employees removed tags from a
number of receptacles, thereby removing evidence of their age.56
The ICAC said that Liverpool council did not have proper corruption safeguards and recommended that “all
councils should assess their current practices, and if required, take the steps in the report to strengthen their
contracting against corruption risks."
 Onyx builds a platform in Asia with China as the prize
As WMI retreated to its US home, it sold its assets all over the world. Onyx bought WMI’s Hong Kong and
mainland China operations and used them as a base from which to improve its position in the region.
It has continued its expansion in Asia with further acquisitions and contracts. In March 2001, the company
announced that it had been awarded a 5 year, €52million waste collection contract for central Singapore.
In January 2001, Onyx entered a chemical waste joint venture with Rhodia in Korea - Onyx bought a 50 per
cent interest in Eco Services Korea for €45.6 million.57
In January 2001, the company announced that it had won the tender for management of the Household
Waste Incineration Unit in Tai-Tung County, Taiwan. It is expected to generate revenue of €250 million58
over 20 years. This followed earlier contract awards in Taiwan.59
The company now operates in eleven Asian countries (including China, India, Korea, Malaysia, the
Phillippines, Singapore and Taiwan) and employs 5,000 staff in the region. It claims to be the market leader
in waste management in Asia.60
The company sees these acquisitions as giving it a strategic foothold to take advantage of the prospects
presented by the opening up of the Chinese market.61
2002-01-Gb.doc Page 15 of 34
 Sita becomes No. 2 in Australia
In 2000, Sita bought Pacific Waste Management, and with that claims it became No 2 in the Australian
market.62
It was bought in partnership with Singapore-based Sembcorp Industries and reflects another aspect of Sita’s
expansion in the Asia-Pacific region. The group has other partnerships with Sembcorp in Singapore and
Indonesia.
The company, now renamed Sita Environmental Solutions, recently won what it describes as ‘Australia’s
largest waste collection contract’. It is an eight year contract said to be worth AUS$151 million. 63
 Cleanaway consolidates position in Australia and expands to New Zealand
Cleanaway Chief Executive CK Chow announced in September that the company had made profitability
improvements in Australia through cost reduction and service initiatives following the restructuring. The
company claims to be the largest waste operator in Australia and has continued acquisitions with the
purchase of Wastemaster in Darwin.
It has also entered New Zealand for the first time in a joint venture with NZ company Envirowaste.64
 Waste Management New Zealand aims to be regional player
Waste Management New Zealand was formerly the New Zealand unit of WMI. It is no longer connected to
the American giant but is building itself up to challenge some of the larger companies in the region.
It is now active in Australia with several acquisitions in 2001 and has ambitions to expand further.65
D. Latin America
 Onyx’s Mexican business hit by downturn
On 31 August, 2000, Onyx announced the acquisition of WMI's special industrial waste business in Mexico.
It consists primarily of the ISO 14001 certified Monterrey industrial waste landfill and five transfer
facilities.66
However in 2001, parent company Vivendi Environnement reported that recession in Mexico had hit the
hazardous waste business and together with increases in prices for fuel and other items, there had been a fall
in volumes of waste processed.67
 Sita continues growth in Brazil
In 2000 Sita subsidiary VEGA, signed a 20 year €200 million contract with the municipality of Salvador.
The tender was for the design, construction, operation and supervision of a clinical waste processing plant,
as well as a landfill and a transfer station intended to manage the urban waste (domestic and commercial) of
the 2.4 million inhabitants of the city of Salvador.68
2002-01-Gb.doc Page 16 of 34
 Sita restructures in Argentina

July
Sita reorganized its Argentine operations in 2000. After increasing its holding in CLIBA to 60 per cent in
June, Sita transferred two thirds of it to CESPA, its Spanish subsidiary. Sita is now a 40 per cent shareholder
in what it claims is the Argentine waste management leader. CLIBA is the waste services business of the
Argentine Group Benito Roggio e Hijos, which mainly operates in Buenos Aires and Cordoba.69
E. Africa and the Middle East
 Onyx active in North Africa
In Morocco, in the first half of 2000 the company received an order (worth €2 million per year for five
years) from the district of Fès-Agdal to collect its household waste and a concession contract from the
Agadir district to create three transfer centres, a composting plant and a landfill (worth € 2.3 million per year
for five years).70
It also won a contract to manage the waste services in Alexandria, Egypt (a long term contract worth €25
million a year for 15 years).71
 Vivendi in multi-utility deal in Iran
In January 2002, the Iranian government announced that it had signed a Memorandum of Understanding for
co-operation with Vivendi on a multi-utility deal that would involve water, wastewater, and the
establishment of a waste-to-energy incinerator near Tehran.72
5. Trends
A. A new environmental services industry?
Vivendi has outlined its vision of the changing nature of what it calls the ‘new environmental services
industry’73. This new industry does not just refer to waste management, although it is an important part of
the picture. Vivendi identify three key trends:
➢ Increase in environmental standards

➢ Privatisation/deregulation and globalisation/outsourcing
➢ One stop shopping
Vivendi argues that these trends will push the industry into a new model characterised by:
• Attractive and growing markets

• Long term contracts and predictable cash generation
• High level of technical expertise
• Global multi services offering the key
 The Vivendi model of the multiservice future
2002-01-Gb.doc Page 17 of 34
Source: Vivendi presentation to Investors and Credit Analysts, June 2001
Naturally they regard themselves as ideally placed to make major gains in the ‘new industry’ with their
operations in water, waste, energy services and transport (plus their holding in Spanish utility, FCC).
However it is a view that is also largely shared by rival French multi utility, Suez. Although they are not
involved in transport they compete with Vivendi in water, waste and energy services. Their waste unit, Sita
has already put into practice the thinking behind Vivendi’s vision with the establishment of Sita One, a one-
stop shop for major multinational customers operating in Europe.
It has created Suez Industrial Solutions (SIS), a joint subsidiary of the Energy, Water and Waste Services
divisions, in an attempt to an integrated, coherent Group response to the perceived needs of a changing
market. SIS will organise and unify the Group’s resources, “by coordinating its industrial development
policy, and by taking direct responsibility for supervising the Group’s major multi-services contracts”74.
 The Suez model of the multiservice future
2002-01-Gb.doc Page 18 of 34
Source: The Group’s New Industry Services Organization And Objectives, Suez, Paris, Tuesday, February 27, 2001
As part of this more integrated, multi-utility approach some restructuring has taken place at senior level at
Suez. In January the company announced that Jacques Petry, former Chairman and CEO of Sita has been
moved to become Chairman and CEO of Ondeo (the group’s water operation), but he has also been given a
“mission aimed at identifying and leveraging the cost and development synergies between the Water and
Waste Services Divisions of Suez”.75
On a smaller scale, the other European-based competitors are attempting to follow suit in the sense of
creating groups which offer a full range of waste management services.
There are some concerns among environmentalists about industry’s support for ‘integrated waste solutions’.
For example, the European Environment Bureau is worried that this will ultimately lead to the cheapest and
easiest solution rather than the most environmentally appropriate.76 They fear that incineration will become
the main focus of waste management rather than waste prevention.
B. Possibilities for expansion in the waste management market
In 1995 Onyx, Vivendi’s waste management unit, generated just 10 per cent of its revenues from North
America and Europe (outside France). By 2000, North America and the rest of Europe represented 43 per
cent of revenues.77
The company has also been increasing the proportion of its revenues generated from industrial customers as
opposed to its municipal customers.
It believes there is still considerable scope for growth in both these areas.
The company’s view is that the trend towards outsourcing in industry will continue and intensify as will the
desire of large companies for worldwide contracts and central purchasing. 78
2002-01-Gb.doc Page 19 of 34
In the municipal sector, the company believes that privatisation will continue and that considerable
opportunities remain in France and the USA and that there is a large potential yet to be realised in Europe
outside France, as well as in Latin America and Asia.
 Privatisation estimates for municipal waste management in key markets

Estimated Privatised Portion (per cent)
65
60
50
30
10
France North UK Germany LA/Asia

America
Source: Vivendi Presentation to Investors and Credit Analysts, June 2001
 The United States market – the target for the European invasion
The scale of the potential in the USA is illustrated by Allied Waste who estimate “that the 1999 revenues of
the non-hazardous solid waste industry in the United States were approximately $40 billion. The non-
hazardous solid waste industry has traditionally been very fragmented, particularly in the collection segment
of the business. Publicly traded companies, municipalities and privately held companies, generate
approximately 56 per cent, 24 per cent and 20 per cent of the industry's revenue, respectively”.79
Allied argues that the tighter regulatory regime since the beginning of the 1990s increased the amount of
capital required for solid waste operations and that this laid the basis for the increased concentration in the
industry. Smaller firms were unable to raise the necessary capital and were forced to sell to the larger
companies. In Allied’s view “the recent cycle of industry consolidation is substantially complete” 80. This
view is unlikely to be shared by the French waste companies, Sita and Onyx.
Recent figures provide an estimate of the size and shape of the waste market in the USA.
Financial Data for the US Solid Waste Industry
Annual Net Employee Average

Number of Revenues Number of Wages Wages per
Sector Organizations ($ Billions) Employees ($ Billions) Employee
Publicly Traded Companies 28 $20.6 119,500 $4.3 $36,000
Privately Held Companies 11,900 $12.4 151,700 $2.6 $17,100
Public Sector 15,100 $10.3 96,600 $3.1 $32,100
Mean Estimate 27,028 $43.3 367,800 $10.0 $27,200
2002-01-Gb.doc Page 20 of 34
Source: The U.S. Solid Waste Industry: How BIG is It? By Edward W. Repa, Waste Age, Dec 1, 2001.
These figures are based on surveys commissioned by the Environmental Research and Education Foundation
(EREF). For the purposes of this study solid waste included any non-hazardous waste sent off-site for final
disposal, incineration, recycling or composting. Nonhazardous waste included household waste;
commercial, business or institutional (CBI) waste; special waste; construction and demolition (C&D) debris;
regulated medical waste; yard waste; sludge; and scrap tires.81
Organisations involved in collection, disposal, recycling, incineration, composting or other solid waste
processing were divided into three categories:
• Publicly traded companies (private companies that issue stock currently traded on a national stock
exchange)
• Privately held companies (all other private companies)
• Public sector (municipalities)
The figures are not based on a census of the industry but on sampling. The results are mean estimates based
on an 85 per cent or better confidence level for data collected in 1999. Nevertheless, they provide some
interesting data, that matches estimates made by the large companies.
56 per cent of the organisations operating in the US waste management industry were public sector bodies
(15,100 in total) and they accounted for 24 per cent of the revenues generated with 27 per cent of the number
of employees.
44 per cent of organisations in the industry were private companies. Of these, privately held companies
accounted for almost all (99.8 per cent) of the private sector operators, while only 0.2 per cent were publicly
traded.
But these 28 listed companies account for 48 per cent of net revenues with 32 per cent of the workforce. The
smaller companies (11,900 of them) account for 28 per cent of net revenues with 41 per cent of the
workforce.
The relative size of the private and public sectors in the USA are shown in the following tables (the same
information is presented in two different ways).
Proportionate size of public and private sectors in US waste industry (a)
Private companies Other Private Public sector Totals

(stock exchange companies
listed)
Number of 28 11,900 15,100 27,028

organizations
% of total number 0.1 44 55.9 100
of organizations
Net revenue 20.6 12.4 10.3 43.3

($ billions)
% of net revenue 48 28 24 100
No of employees 119,500 151,700 96,600 367,800

% of workforce 32 41 27 100
Source: Derived from figures in The U.S. Solid Waste Industry: How BIG is It? By Edward W. Repa, Waste Age, Dec 1, 2001
2002-01-Gb.doc Page 21 of 34
Proportionate size of public and private sectors in US waste industry (b)
Number of % of total Net % of net No of % of

organizations number of revenue revenue employees workforce
organisations ($ billions)
Private 28 0.1 20.6 48 119,500 32
companies
(stock
exchange
listed)
Other 11,900 44 12.4 28 151,700 41
Private
companies
Public sector 15,100 55.9 10.3 24 96,600 27
Totals 27,028 100 43.3 100 367,800 100

Source: Derived from figures in The U.S. Solid Waste Industry: How BIG is It? By Edward W. Repa, Waste Age, Dec 1, 2001
The market as a whole is not expected to expand by much in the US82. The significance for the
multinationals is the fact that there are thousands of small private companies and just a handful (28) of large
listed private companies existing within the same marketplace as a large number of municipal operations.
This suggests that there are possibilities for the larger companies to expand further, through acquisitions and
privatisation.
 Expansion outside the USA
In 1998, the World Trade Organisation (WTO) noted that: “in the future, environment markets in east and
south-east Asia, Latin America, central and eastern Europe are expected to show rapid growth and
opportunities for international trade. This is partly due to strong economic development and rapid
internationalisation and partly due to increasing environmental awareness.”83
The WTO reported that the environmental services industry (which includes water) in general would become
more trade oriented, “particularly in more mature areas such as waste”.84 The WTO argued that the adoption
of world-wide environmental standards would expand international markets and that privatisation and
deregulation would encourage greater foreign participation. Finally the trend towards consolidation and
increased company size would lead to greater internationalisation.
Global Environmental Market Growth 85
2002-01-Gb.doc Page 22 of 34
The chart above shows that growth rates in the environmental services industries (which includes
wastewater) are high in the non-OECD areas. Although many of these countries are starting from a low base
- OECD countries currently account for approximately 90% of the total global market86 - there are
opportunities for growth for the multinationals, particularly where they already have a presence in a region
or country.
Global Environmental Markets by Region (1998)
Source: European Commission87
Waste management is the single largest sub-sector in the environmental goods and services market and
accounts for 40 per cent of the market value (see figure below).
Global Environmental Markets split by Environmental Sub-sector
2002-01-Gb.doc Page 23 of 34
The European Commission has made some projections of growth rate in the different geographical segments
of the environmental market (includes water). Markets in a number of regions of the world are expected to
grow at spectacular annual rates in the years to 2010 – China at 12 per cent a year, south east Asia at 14 per
cent, South America at 9 per cent and central and eastern Europe at 10 per cent.
Global Market Forecasts to 2010
Some idea of the size of the environmental industry in the EU countries can be seen from the following
graphic. It is based on information that is now slightly out of date so should be viewed with caution, but is
useful for indicative purposes.
2002-01-Gb.doc Page 24 of 34
Value of EU Eco-Industry by Member State
Source: European Commission (based on DGXI/Eurostat 1997) 90
Germany
The view that there is plenty of scope for expansion in the world market is broadly shared by most of the
large waste management companies. RWE Umwelt argues that the German waste management market is the
most promising. Because it has high environmental standards there are also high value-added levels
attached.
RWE estimates that the German market has the highest sales potential in Europe with its total sales volume
of €38 billion per year. Of this only around €15 billion is currently accessible to private-sector waste
management enterprises. The remainder is accounted for by local authority waste management and by
industrial companies carrying out their own waste management.91
RWE agrees with the view that the push towards privatisation in the public sector and outsourcing in the
private sector will continue and that this will provide new opportunities. And this ignores the impact of
imminent improved legal environmental standards and the backlog of improvements still needed in east
Germany.
RWE describes the German waste management market as characterized by a high degree of fragmentation
and intensive price competition. The company notes that this competitive situation is being increasingly
aggravated by foreign competitors (especially in border regions), because of the progressive harmonization
of the single European market.
United Kingdom
In 1997, the Joint Environmental Markets Unit at Britain’s Department of Trade and Industry characterized
the UK industry as:
“substantially less mature, less sophisticated and less complex than the water industry, with smaller,
less powerful companies. The market is highly competitive in certain areas and co-operative and cartel-
like in others. As environmental standards have become more stringent, the industry has experienced
some consolidation with economies of scale compensating for rising operating costs. There remains
considerable scope , however, for further consolidation over the next few years through mergers and
acquisitions. By early next decade there may be as few as four major UK waste management
companies, each operating across the whole of the UK. There are also an increasing number of German
and French companies active in the UK, winning a variety of local authority contracts to operate
collection/disposal services and treatment (eg incineration) facilities. Overall the sector’s current lack
2002-01-Gb.doc Page 25 of 34
of sophistication and of very large companies makes it more accessible to new suppliers than the water
industry.”92
In 1997, it was estimated that the then leading five operators accounted for 23 per cent of the UK waste
management market. This was compared with elsewhere in Europe where in France the leading three
companies were estimated to control 51 per cent of the market, in the Netherlands 36 per cent and Spain 31
per cent.93
Since then, the predicted consolidation has been rapid. Biffa bought UK Waste, Sita integrated its operations
with United Waste Services, Cleanaway acquired Serviceteam, the Waste Recycling Group purchased
Hanson Waste Management, and Thames Waste Management became part of RWE Umwelt. The growth of
Sita, Onyx and RWE Umwelt has gone side by side with attempts by UK-based companies to transform
themselves into multinationals. Shanks now has operations in Belgium and the Netherlands and Biffa (part
of Severn Trent) is also active in Belgium.
However, even after this period of consolidation, market leader Sita claims only to have 12 per cent of the
market.
RWE views the situation in the UK as promising. Not only does it have the second-largest market potential
in Europe, put at roughly €7.5 billion per year, but the company argues that the UK market remains in “a
phase of dynamic and radical change”.94
Some commentators argue that in the UK, the impact of the landfill directive and the move to other forms of
waste disposal will mean that revenue from the sector, about £3.5 billion a year, will rise to £12 billion in the
next 10 years.95
Central and eastern Europe
The environmental market in the EU accession states which have applied to join the EU (Estonia, Latvia,
Lithuania, Poland, Czech Republic, Slovakia, Hungary, Slovenia, Romania, Bulgaria, Malta and Cyprus) is
estimated at between €1.5 - 2 billion, and is predicted to increase to between €8 billion and €16 billion in
2010.96
Total waste generated (tonnes/capita) in 1995 and 1999 in selected central and eastern
European countries
2002-01-Gb.doc Page 26 of 34
Source: DHV CR Ltd97
Although the figures above show a decline in total waste generated (including municipal waste, hazardous
waste and non hazardous waste) in the period 1995-1999, the average of the selected countries still exceeds
the EU/EFTA average. In addition, as GDP per capita grows so too does the amount of municipal waste per
capita.
According to RWE, the “European growth markets differ from Germany in that they still have a large
backlog demand in the waste management field”98. This presents a particular opportunity in central and
eastern Europe where RWE views Poland in particular, the Czech Republic and Hungary, as attractive
markets with above-average growth rates.
The European Accession Countries need to harmonise waste management legislation and practice with that
of the EU. According to the European Environment Agency, total reported quantities of waste are three
times the EU average (largely because of mining waste and waste from agriculture).99
People’s increasing environmental awareness and the efforts to join the EU are prompting local authorities
there to expand their organized waste management and recycling industries. This presents opportunities for
the private sector – particularly the large multinationals.
European multinationals (especially German and Austrian companies) are well placed to continue to grow in
central and eastern Europe. Not only do they have the advantage of geographical proximity but also the
experience of working under EU environmental law.
Poland has been identified as a particular target for UK companies. At a UK government Joint
Environmental Markets Unit seminar in June 2001, delegates were told that the environmental market in
Poland is sophisticated and price sensitive, but because of the pressures imposed by EU accession, there is
still plenty of room for UK companies to gain markets.100
Latin America
The Latin American market is dominated by a large number of relatively small local companies. The main
challenge to the local companies comes from Sita and Onyx (through Proactiva). Both are looking to expand
their activities in the region.
According to the Carl R. Bartone of the World Bank101, big cities in Latin America started contracting out
municipal waste management in the 1970’s – for example, Buenos Aires, Caracas, Sao Paulo.
These were mainly zonal service contracts for collection, management contracts for transfer, treatment
2002-01-Gb.doc Page 27 of 34
and disposal. Today contracting out has spread to intermediate cities. Bartone claims that in 1999 between
40 and 50 per cent of the urban population in Latin America and the Caribbean region was served by private
operators.
He says that in Brazil, 40 firms collect 65 per cent of urban waste nationwide (up from 40 per cent in 1982).
Of these 40 firms, five were large contractors in road or dam construction and 20 medium and 15 small
haulers or transportation companies. He points out that there is increasing international participation in the
region’s market.
Asia-Pacific
In some respects, the Asia-Pacific region is similar to Latin America. It is rapidly developing and is regarded
as an important market for growth by the multinationals. The main ones competing with local companies are
Sita, Onyx and Cleanaway.
6. Industrial relations implications
A. Dangers of job losses as ‘synergies’ follow consolidation
In those national markets that are already relatively developed, consolidation is likely to continue and there
is a real danger that job losses will follow.
A service industry like waste management is labour intensive and after mergers and acquisitions, the new
owners frequently seek ‘synergies’ and savings through job cuts.
B. The continuing threat of privatisation
Privatisation continues to attract politicians throughout the world in an attempt to cut public expenditure and
thereby find the financial room to reduce taxes.
When waste management is contracted out, there are almost always job losses and/or cuts in pay and
conditions for the workforce.
The drive to privatise or contract out municipal services is unlikely to fade away in the near future despite
the failure of its advocates to present a convincing case on quality of service grounds.
Even in the UK, where privatisation has been enthusiastically embraced by both the main political parties
the government’s Audit Commission recently noted: “Overall there is no evidence that in-house or
contracted out waste services are necessarily better or worse, but there is evidence that the local authority
will provide better quality services if these relationships are well managed”.102 This is hardly a thundering
endorsement of privatisation.
The need for a sceptical approach to the claims made on behalf of the private sector firms’ ability to improve
services is also shown by the growing numbers of reported problems and the cases where the services has
been brought back in-house following private sector failings.103
C. Potential for international union co-operation
The growth of the waste multinationals, and particularly the growth of the multi-utilities, has meant that
growing numbers of organised workers in different countries share the same employer.
2002-01-Gb.doc Page 28 of 34
 European Works Councils
European social legislation such as that relating to European Works Councils (EWCs) has created a
framework in which union representatives from different countries can co-operate and organise.
The European Federation of Public Service Unions (EPSU) has been actively involved in supporting
workers’ representatives on the relevant EWCs and plays a lead role in a number of them.
The fact that a workers’ side of the EWC exists and meets is, in many respects, of more importance than the
actual meetings of the ‘social partners’ at the EWC. However, without the one, the other would not exist.
Through this the EPSU has established an EWC Co-ordinators’ Network (see Annex 1).
The EWC and the union network can be used as a means of reaching out to unorganised workers in
individual company units and as a way of pulling in organised workers from parts of the company that are
outside the EU (such as central and eastern European countries and North Africa).
The EPSU has also pushed for the creation of EWCs in those countries that have been slow to implement the
directive.
 National co-ordination as part of an EWC
In a number of countries, the national centre acts as a convenor for union representatives from all of the
subsidiaries of a particular multinational in one country.
For example in the UK, the TUC convenes an annual meeting of Vivendi representatives to discuss
industrial relations issues, company initiatives and European Works Council business.
The meetings allow stewards and representatives to compare notes and to establish whether any patterns are
emerging in company industrial relations practice either in the UK or on a wider basis.
 Global representation
Some companies (like Vivendi) have agreed to the formation of a representative world body in addition to
the EWC and global union federations like PSI are able to play an important part in pulling representatives
together from the company’s different workforces around the world.
Even before the formal establishment of such world councils, unions have been able to make some progress
through the existing organisations. For example, at an EPSU waste unions meeting in 2001, Henk
Hummelman, EWC secretary, reported that the US union had been invited to the EWC Bureau as had the
Brazilians.
Although at this stage they were not entitled to membership or even observer status (unlike the unions in the
Czech Republic, Romania, Poland and Kazakhstan - all of whom had been granted one representative per
country).104
At an international level the PSI has begun the work of building world networks of union representatives
within individual companies. It has started with multi-utility Vivendi.
2002-01-Gb.doc Page 29 of 34
 International solidarity
Closer contacts built through the international networks of trade union representatives have direct practical
implications in two ways:
➢ Negotiations on pay and conditions (particularly conditions but perhaps increasingly pay in the
Eurozone with the greater transparency afforded by monetary union)
➢ Solidarity in disputes
By bringing union representatives from different countries together, it is obviously easier to look for ‘best
practice’ conditions across the employer’s subsidiaries and national units. It is possible to identify potential
gains in areas like health and safety and pensions. This already occurs within national boundaries to a certain
degree – particularly when all the workers are organised in one union.
When a dispute takes place in one of the company’s units, the union network can be used to generate support
outside the particular unit of the company and outside the country.
This is increasingly taking place as union realise the potential and call for assistance from colleagues. In
2000, EPSU co-ordinated international protests to assist Swedish affiliate SEKO involved in a dispute with
Betonmast, part of German company Energie.
Most recently, affiliates of the Public Services International and the International Transport Workers’
Federation combined to place pressure on Vivendi subsidiary, Connex after employees of Rheinbus (part of
Connex Germany) went on strike to demand the same wages as paid to workers in publicly-owned bus
companies. The strike was settled with a workers’ victory on 23 January. German union Ver.di highlighted
the role of “the ITF, its affiliates, members of Global Unions, the European Works Council of Vivendi” in
securing a victory.105 Similar actions were co-ordinated in support of workers at Connex Bus in Finland and
Connex trains in Australia.
7. Annex 1: EPSU Resolution on European Works Council Coordinators

Network
Considered at the EPSU EWC Coordinators Seminar
13 September 2001, Luxembourg
Adopted at the Executive Committee meeting 28-29 November 2001
1. The EPSU policy statement: ‘Public Service Trade Unions and Collective Bargaining in a European
environment’ adopted by the EPSU General Assembly in Lisbon in 2000 commits EPSU to support existing
European Works Councils (EWCs) and to develop new ones based on a sectoral approach. EPSU sees
EWCs as part of an emerging European Industrial Relations System that also includes the intersectoral and
sectoral social dialogue.
2. EPSU affiliates are confronted with and organising more and more in transnational companies including
very large ones such as Vivendi, Suez, EdF, GdF, RWE, E.on, Vattenfall. The list grows. The trade unions
are interested in establishing networks between unions active in the same company and in negotiating
European Works Council Agreements with these companies.
3. It is important for EPSU to bring together the trade union representatives that deal with EWCs in their
respective unions on a regular basis, An EWC coordinators Network is one way of doing so. The need has
also arisen to be clearer on the role of EWC trade union coordinators (the subject of a separate resolution).
4. Although a certain level of information exchange takes place in the EPSU Standing Committees that have
the role of following the Transnational Companies in their specific area of work, this is not focused on
exchanging experience and developing policies regarding EWCs. A network based on coordinators serves
this task better.
2002-01-Gb.doc Page 30 of 34
5. The Network is:
➢ To exchange information on ongoing activities with regard to EWCs and their daily praxis,
including the problems encountered to ensure they are effective instruments of cooperation between
workers and their trade unions;
➢ To consider interesting developments such as Social Charters and ways to handle mergers and
acquisitions;
➢ To update each other on recent European developments including campaigns by EPSU and ETUC
(e.g. to improve the European Works Council Directive);
➢ To develop EPSU policy for EWCs as required, for example on guidelines and/ or training material;
➢ To explore the manner in which EPSU supports EWCs and develops these, including the use of
EWCs in trade union campaigns for trade union rights;
➢ To consider the companies to be targeted for trade union cooperation and EWCs (priority list).
2002-01-Gb.doc Page 31 of 34
Notes
1
JEMU (Department of Trade and Industry). Global Environmental Markets: An Update. 1997
2
VivendiEnvironnement 2001 Year End Overview, December 2001
3
Vivendi Environnement Press Release, 5 October 2001. Vivendi Environnement shares begin trading on the New York
stock exchange.
4
Vivendi Environnement 20F Report, 26 September 2001
5
6
7
Onyx Press Release, 19 September 2000. Novartis outsources waste management and energy services to Vivendi
Environnement
8
Vivendi Environnement Press Release, 10 September 2001. Vivendi Environnement selected by Usinor in Brazil.
9
VivendiEnvironnement 2001 Year End Overview, December 2001
10
11
Suez in 2000, corporate brochure 2001
12
Suez 2001 Half Year Results booklet
13
Suez Press Release, 30 October 2001
14
15
Suez Press Release, 5 September 2001. Suez to begin trading American Depositary Shares on the New York Stock
Exchange
16
RWE Umwelt Strategy. Company website www.rwe.com (accessed 22 January 2001)
17
Chairman’s Address, Brambles Industries Ltd Annual General Meeting, 15 November 2001.
18
Chairman’s Address, Brambles Industries Ltd Annual General Meeting, 15 November 2001
19
Frankfurter Allgemeine Zeitung (Germany), 7 July 2001
20
ICC approves MMDA deal for Rizal dump construction. BusinessWorld (Philippines), 9 January 2002
21
NSW: Accused waste company cleared of corruption. AAP, 31 July 2001.
22
A. Ripper, R. Miller-Bakewell and P. Steegers (Merrill Lynch), Euro-Trash – a consolidating industry. Paper to the
national conference of the UK Environmental Services Association, 20 September 2000.
23
Daily Telegraph, 1 November, 2001
24
Investors Chronicle, 9 November 2001
25
Daily Telegraph, 1 November 2001
26
Severn Trent Press Release, 4 December 2001. Interim Results for the six months to 30 September 2001.
27
Severn Trent Annual Review 2001
28
Severn Trent Annual Review 2001
29
Vivendi Press Release, 31 August 2000
30
Onyx Press Release, 9 May 2000. Onyx has expanded during the first quarter in North America
31
Suez Press Release, 28 June 2001. Suez acquires a strategic position in the US industrial waste sector.
32
Fired up for action, Guardian 16 January 2002
33
Waste Management: Guidance for Improving Services. Audit Commission, 2001.
34
Delivering Sustainable Waste Management, House of Commons Select Committee on
Environment, Transport and Regional Affairs, Fifth Report, March 2001
35 The “New” Brambles Group: A global leader in Support Services, A presentation by CK Chow (CEO) Sydney 5
September 2001
36
Sita Press Release, SITA Polska, 23 November 2001. Poland’s waste management leader, broadens its service offer.
37
Vivendi Environnement Press Release, 4 May 2001
38
Onyx Press Release, 29 August 2001
39
Sita Press Release, 10 January 2002. Sita takes over Frazier International
40
Onyx Press Release, 21 May 2001. Onyx and the Marius Pedersen Foundation form an alliance in Scandinavia and
Central Europe
41
42
Sita Press Release, 9 February 2000. Sita establishes itself in Denmark
43
Onyx Press Release, 9 May 2000
44
Sita Press Release, 17 July 2001. Following the acquisition of Recycling Park, SITA becomes the Czech Republic’s
No. 2 waste services operator
45
www.letsrecycle.com news item 12 June 2001
46
Sita Press Release, 10 November 2000. Sita strengthens its position in the Netherlands
47
RWE Umwelt Press Release, 10 July 2001. Remex Baustoffrecycling AG under new management
48
RWE Umwelt Annual Report 2000-2001
49
RWE Umwelt Annual Report 2000-2001
2002-01-Gb.doc Page 32 of 34
50
Sita Press Release, 25 June 2001. In the United Kingdom, SITA has been awarded a 121 million Euro contract for
the global management of waste in Bristol
51
The “New” Brambles Group: A global leader in Support Services, A presentation by CK Chow (CEO) Sydney 5
September 2001
52
PSIRU. Sita in Brighton: humiliation by the sea, August 2001. Available from
http://www.psiru.org/reports/2001-09-G-Sitabton.doc
53
Brighton and Hove Argus, 12 June 2001
54
Guardian, 6 June 2001, Brighton and Hove Argus, 15 December 2000, Western Daily Press, 15 September 2000.
55
NSW: Accused waste company cleared of corruption. AAP, 31 July 2001.
56
NSW Independent Commission Against Corruption, July 2001. Garbage, drains and other things: An examination of
conduct of two Liverpool City Council contractors
57
58
Vivendi Environnement Annual Report 2000, July 2001
59
Onyx Press Release, 9 January 2001, Onyx awarded tender for Tai-Tung County incinerator (Taiwan)
60 Onyx Press Release, 8 March 2001, Vivendi Environnement wins the waste collection contract for the largest sector
in Singapore city centre and confirms its position as market leader in waste management in Asia.
61
62
Sita Press Release, 12 April 2000. SITA strengthens its position in Asia-Pacific: acquisition of the second-largest
Australian waste management operator
63
Sita Environmental Solutions Press Release, nd. Australia's Largest Waste Collection Contract
$151 million Awarded To SITA Environmental Solutions
64
The “New” Brambles Group: A global leader in Support Services, A presentation by CK Chow (CEO) Sydney 5
September 2001
65
Waste Management New Zealand Press Release, 1 June 2001. Waste Management makes first Australian
acquisitions
66
67
Vivendi Environnement 2001 Half Year results, Presentation 25 September 2001
68
Sita Press Release, 3 February 2000
69
Sita Annual Report 2000-01
70
Vivendi Environnement Annual Report 2000, 1 July 2000
71
Vivendi Environnement Annual Report 2000, 1 July 2000
72
Asia Pulse, 29 January 2002. France, Iran to cooperate in water, wastewater, power projects.
73
Vivendi Presentation to Investors and Credit Analysts, June 2001
74
Suez 2001Corporate Brochure
75
Suez Press Release, 10 January 2001.
76
European EnvironmentalBureau (EEB) Towards a low waste Europe: 10 key issues. April 2001.
77
The Group’s New Industry Services Organization And Objectives, Suez, Paris, Tuesday, February 27, 2001
78
The Group’s New Industry Services Organization And Objectives, Suez, Paris, Tuesday, February 27, 2001
79
Allied Waste 10KA, 23 August 2001
80
Allied Waste 10KA, 23 August 2001
81
The U.S. Solid Waste Industry: How BIG is It? By Edward W. Repa, Waste Age, 1 December 2001.
82
The EU Ecoindustry’s Export Potential: Final Report to DGXI of the European Commission, September 1999
83
World Trade Organisation, Council for Trade in Services. Environmental Services: Background Note by the
Secretariat, 6 July 1998
84
World Trade Organisation, Council for Trade in Services. Environmental Services: Background Note by the
Secretariat, 6 July 1998
85
The Canadian Environment Industry at a Glance, February 2000. Canadian EnvironmentIndustryAssociation.
86
87
88
89
90
91 RWE Annual Report 2000-01
92
JEMU (Department of Trade and Industry). Global Environmental Markets: An Update. 1997
93
MBD Waste Management Market Development
94
RWE Annual Report 2000-01
95
Time to waste at Severn Trent, Sunday Business, 9 December 2001
96
97
Waste Management Policies in Central and Eastern European Countries: Current Policies and Trends (Final
Report). DHV CR Ltd. July 2001
98
RWE Annual Report 2000-01
2002-01-Gb.doc Page 33 of 34
99
Environment in the European Union at the turn of the century. European Environment Agency. 1999.
100
Poland provides a wealth of opportunity for UK environmental business. Edie News, 8 June 2001
101
Private Sector Participation in Municipal Solid Waste Management: Lessons from LAC (Latin America and the
Caribbean), Carl R. Bartone. Course on Urban and City Managemen, Toronto, 2-14 May, 1999.
102
Waste Management: Guidance for Improving Services. Audit Commission, 2001.
103
See PSIRU. Sita in Brighton: humiliation by the sea, August 2001. Available from
http://www.psiru.org/reports/2001-09-G-Sitabton.doc
104
PSIRU Industrial Relations Database
105
PSIRU Industrial Relations Database
2002-01-Gb.doc Page 34 of 34

2002 February - Steve Davies - Waste Management Multinationals 2002

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Public Services International Research Unit (PSIRU)

Waste management multinationals 2002

Public Services International Research Unit (PSIRU)

2. The main companies ..................................................................................................................................................... 4

3. Developments among the multinationals .................................................................................................................... 5

4. Selected developments by region ................................................................................................................................. 9

 Privatisation estimates for municipal waste management in key markets ...................................................... 20

6. Industrial relations implications ................................................................................................................................ 28

7. Annex 1: EPSU Resolution on European Works Council Coordinators Network ............................................... 30

2. The main companies

A. 2000 turnover of European-based companies

Company Parent Home Turnover Area of operation

Onyx Vivendi France 5,260* Europe, North

Sources: PSIRU database, company annual reports

B. 2000 Turnover of top US companies

Company Parent Turnover

Waste Management Inc Waste Management Inc 12,492

Sources: PSIRU database, Hoovers, Vivendi 2001 Year end overview.

3. Developments among the multinationals

• provides waste management services to 70 million people on five continents;

Vivendi Environnement has identified the group’s strategy as follows:

Suez has identified its waste strategy as follows:

The company’s strategic aims fall into two geographic parts:

Biffa operates in the UK and Belgium.

4. Selected developments by region

 Retreat of the US multinationals

 Onyx now No 4 in the USA

 Sita enters the US hazardous industrial waste market

 Sita sets up joint venture in Poland

 Onyx wins multi-million UK municipal contracts

 Further UK expansion for Sita

 Onyx claims ‘lead position’ in Scandinavia

 Sita gains ground in Sweden

 UK call for waste regulator

 Sita buys large Dutch municipal waste company

 Vivendi Environnement gains its first multi-utility municipal contract

 Sita alliance with Rhodia pays off in Spain

 RWE expansion in Europe

 Sita claims over 12 per cent of UK market

 Sita humiliated in Brighton (UK)

 Rethmann accused, then cleared of corruption - but still pays AUS$250,000

 Onyx builds a platform in Asia with China as the prize

 Sita becomes No. 2 in Australia

 Cleanaway consolidates position in Australia and expands to New Zealand

 Waste Management New Zealand aims to be regional player

 Onyx’s Mexican business hit by downturn

 Sita continues growth in Brazil

 Sita restructures in Argentina

E. Africa and the Middle East

 Onyx active in North Africa

 Vivendi in multi-utility deal in Iran

A. A new environmental services industry?

➢ Increase in environmental standards

• Attractive and growing markets

 The Vivendi model of the multiservice future

Source: Vivendi presentation to Investors and Credit Analysts, June 2001

 The Suez model of the multiservice future

B. Possibilities for expansion in the waste management market

 Privatisation estimates for municipal waste management in key markets

France North UK Germany LA/Asia

Financial Data for the US Solid Waste Industry

Annual Net Employee Average

Proportionate size of public and private sectors in US waste industry (a)

Private companies Other Private Public sector Totals