September 2014 Future investments in recycling with declining material content - challenges and opportunities 1 Rasmus Bergström CEO Stena Technoworld
Where are we coming from? 1970 1980 1990 2000 2014 2
Dematerialisation 3 3
Productivity where is the limit with more complex products? Old products Possible to dismantle or mechanical separate the block into more clean fractions Complex products 4
Productivity where is the limit with more complex products? Complex products Clued multi material parts -> Need to be milled down harder to be able to separate them More glass-> hard to separate when it is in small parts Small concentration of REM and precious metals-> Hard to get out More process step with increased cost for less valuable material 5
Where are we coming from? Change of business logic 2007 Producers paid 2014 Recycler pay 80-20 swapped to 20-80 6
Gate fee development 150 100 50 0-50 2009 2010 2011 2012 2013-100 -150-200 -250 Danmark Have Italy we reached Sweden a mature Finland market Austria now Germany? Norway 7
Raw Material Prices
Metal content development in A-cards a constant decline 100 95 91 78-22% 100 90 82 78-22% Au Ag 2010 2011 2012 2013 2010 2011 2012 2013 100 88 66 61-39% 100 101 104 102 +2% PD Cu 2010 2011 2012 2013 2010 2011 2012 2013 9
Is the recycling industry financial sustainable? 110 Need of transparency and indexation BA Technoworld Price change 105 100 95 90 Revenue BA 85 80 Sep Nov Jan Mars May July Sep Nov Jan Mar May 10
Sustainability Disposal of only one CFC fridge is equal of 2,000 kg CO 2 or 10000 km by car 11
Requirement in addition to WEEE Compliance will become key for succes! Or? 12
Legislation Is increasing the demand for serious recyclers and producers Groups according to Directive 2012/19/EU of 4 th of july 2012 Material recycling including resure + energy recovery Target in WEEE 20120813-20150815 Target in Weee 20150815-20180814 Quality Transparency Compliance Sustainability Competitive edge From 2019 and onwards the minimum collection rate to be achieved annually shall be 65% of the average weight of EEE placed on the market in the three preceding years in the Member State concerned, or alternatively 85% of WEEE generated on the territory of that Member State as foreseen in Article 7(1). 1. Large Households appliances 80 2. Small Households appliances 70 3. IT and telecomunnication 75 equipment 4. Consumer equipment and (photovolatic panels) 75 5 Lighting equimpent 70 6 Electrical and electronic tools 70 7. Toys leisure and sports equipment 70 8. Medical devices 70 9. Monitoring and control equipment 70 10. Automatic dispensers 80 85 75 80 80 75 75 75 75 75 85 13
Monitoring of down stream Each plant, fraction and customer Quality Transparency Compliance 14 Code of Conduct
Present situation Recyclers Recycling industry is under heavy financial pressure! Number of insolvencies increased during 2014. There is a consolidation phase ongoing. HP presentation 2010 15
Heavy pressure on the producers Source HP 2012 16
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18 Electronic recycling A future not far away
Also plants are recycled Stena took the opportunity to acquire the property as a long term step supporting the growth strategy of the Group. Instead of a green field existing premises can now be reused for new purposes and 900 tons of glass manufacturing equipment have been dismantled and taken care of. Also plants can be recycled! 19
Trends requiring change Stena will be part of the future Decreasing material value Increased environmental requirements Reduced market weights Increased integration of components Instable macro economics Green fence Trends Need for change Cost reductions Process improvements Volume stabilisation Transparent value chain Downstream integration Consolidation Fewer transports Shorter transports Reduced overhead Access to higher market volumes Investments in processes Longer term fixed contracts Actions Halmstad 20
One hub - all our processes 450 000 tons treated in one of the world s largest material recycling facilities of its kind. Non-Ferrous separation Shredder Light Fraction separation First treatment of WEEE LCD-process Shredder Precious Metal Recycling Plastic Recycling 433 000 m2 area (60 football pitches) 75 000 m2 indoors (10 football pitches) 21
Leading the industry development State of the art technology will improve recycling ratios and move the material upwards in the waste hierarchy. The new processes will increase material recycling ratio and further add to Stena s savings of resources and 8 million tons of reduced CO 2 emissions. Environmental and economic benefits go hand in hand. 22
WEEE Treatment Increased integration of product components requires new methods (internal batteries, glued telephones) More automation - adjust to high cost base in Nordic countries Closer connection to and integration with mechanical downstream Higher adaptability to varying input material In cooperation with our customers 23
Precious Metal Recycling To save the earth Increased efficiency Increased yield in processes Reduced material to landfill 24
Plastic Recycling Centre One of the challenges Stena s current process sorts out brominated flame retardants from SDAs and creates plastic concentrates Separate pure PE, PP, PS and ABS which will be delivered directly to compounders at an exact specification. Compliance 25
26 Fact for us in the business! We can not put our head in the sand The life time of a product is decreasing quickly More products are sold complex and not so heavy Margin for producers going down Low recycling rates Higher demands Change of business logic Margins for recyclers are low Commodity prices will not increase Commodity prices will be volatile Investment in technical processes needed High focus on being cost efficiency for all Compliance must be enforced
27 Producer responsibility with increased demands in a volatile environment and our common target to have a sustainable world demands quality recycling that will increase costs for recycling!
Future investments in recycling with declining material content - challenges and opportunities Rasmus Bergström CEO Stena Technoworld 28