Rt Hon Owen Paterson MP
Investor Symposium - 22 May 2013
I would like to thank Liz Goodwin and WRAP for helping to convene today’s Symposium.
I am pleased that so many of you have been able to make time to take part in this discussion on investment in the waste management sector. I am sure it will be a lively and productive debate.
It’s particularly fitting that this debate is taking place in the Guildhall, the historic heart of the City. A city which established itself as the world’s pre-eminent financial and trading centre through innovation and spotting a good opportunity.
By 2050 the world’s population is predicted to reach 9 billion people. There will be an ever increasing pressure on our natural resources. And so the waste industry will become increasingly important.
Estimates suggest that the waste industry could double in value by 2020 to be worth over £6 billion. There are 177 million tonnes of waste produced in England alone. Recycling, reprocessing and remanufacture of materials offer potentially lucrative investment opportunities. Opportunities which I know many of you are already taking advantage of and helping bring about.
When I was appointed as Secretary of State for Defra, the Prime Minister gave me clear instructions to boost growth in the rural economy and improve the environment.
Economic growth and environmental improvement are not mutually exclusive. You cannot have a prosperous economy without a healthy environment. The waste industry is a prime example of this.
Many businesses are striving to reduce waste both to save costs and to benefit the environment. Other companies are looking to reuse waste materials – earning them a profit and reducing the demand for new material.
Businesses already understand the importance of efficiency. They know that to succeed they must use resources wisely.
I want Government to focus on creating the right climate for investment. I think a key role for Government is to get out of your hair. You know how to run your businesses and how to invest.
The opportunities in the sector are immense. Material and commodity prices are rising. McKinsey has calculated that real commodity prices have risen 147% since 2000. Price volatility and security of supply are also becoming major concerns. As the population and demand for new goods to grow the upward pressure on prices will continue.
Businesses want certainty in their supply chains, so there a real opportunity for UK businesses to extract value from these materials – through reclamation, recycling and reprocessing.
At the same time we will save energy, water and use less virgin materials. We will reduce waste and keep valuable resources from ending up in landfill.
There is already a huge global market in waste and recycling. I want to see UK businesses leading the way on this.
Dealing with waste and recycling properly is good for business and has the potential to boost economic growth and create jobs.
To make it happen I want to break down the barriers businesses face to ensure they can compete and lead in the global race.
Every year more than £5 billion worth of recycled material is sent abroad for processing instead of being handled in the UK. The amount of material being recycled more than doubled between 2000 and 2010 and for the first time more waste is being recycled than going to landfill in England. It
The resource management sector is already a significant contributor to the UK economy, employing over 100,000 people and generating over £12 billion sales in the UK.
The sector is anticipated to grow between 3 and 4 per cent a year. With the right investment and market conditions I am sure that more can be achieved. At the same time this will aid other sectors in the UK to grow by mitigating against volatility in global commodity prices.
This is a really exciting sector that has a lot of potential. I want to use today to better understand what the barriers to investment and growth are.
I’d like you to think about what technological barriers exist for the extraction of materials from goods.
I want to know more about what supply chains and volumes of material are required to make a business viable and if this is stopping new entrants into the sector.
This is a fairly new market. We should explore what demand there is for reprocessed or recycled materials and what we can do to boost this.
There are some really inspiring success stories. Only last week I visited Northumbrian Water’s waste treatment site in Howdon on Tyneside. Their investment in anaerobic digestion is enabling half a million tonnes of sludge – from the treatment of domestic sewage and industrial effluent – to be reduced to around 60,000 tonnes and generate enough electricity to power most of the treatment works site or up to 8,000 homes.
Projects like these are a show case for what can be achieved with innovative thinking and the right investment. Show cases for how we can grow the economy and improve the environment.
The importance this Government attaches to the waste sector and its role as a driver of growth can be seen by the attendance of Lord de Mauley, our Minister for Resource Management, and the representatives we have here from the Department of Communities and Local Government, UK Trade and Investment and Infrastructure UK. We’re all keen to hear your perspective.
At the end of today, I would like you to have a concrete action plan for how you can help make more of this industry. And how Government can help to facilitate this. I want you to tell me how we can get more investment into this sector where the opportunities are so clear and its potential to be a world leader so huge.
I will now hand proceedings over to Steve Creed of WRAP who will explain the format for the event.