Outlook for Waste Treatment and Disposal Services

Published Credits: Alison Newman Categories:

This sector includes a range of companies who treat and dispose of a range of materials and liquids. The main activities are operating landfills, garbage disposal, septic tanks pumping and waste treatment.

With around 800 firms operating in this area, the last few years have seen mixed Industry performance. Growth has been negatively impacted by stricter regulations, levies and the rise of recycling. Total revenue for 2019 was $2.69bn, a slight decline on the previous year.

Various factors are predicted to combine to turn things around. We explore this positive outlook and what the main challenges will continue to be for those either in or considering setting up a new business in this sector.


Waste disposal

Australia is one of the largest producers of munical waste per person in the world. Historically some of this was exported to China and elsewhere, but governments are now stopping this, so the reliance is on businesses here to handle the disposal.

The breakdown of products shows the top treatment and disposal services to be:

- lightweight materials, showing some decline due to recycling

- liquids, increased demand especially from food and beverages

- organics, increased share from discarded food and demand from agriculture, forestry and fishing

About half of the market share is by four large firms. They have grown through acqusition, specialist disposal such as medical or local council outsourcing. It's not easy an easy sector to start in due to high capital costs and the length of existing contracts. New entrants are succeeding, though, particularly in niche areas and for those who have introduced new technologies.

The following success factors have been identified

  1. Demonstrating compliance helps win local and federal contracts
  2. Access to a wide collection or distribution network enables more contracts to be won and economies of scale to be achieved
  3. Technological advances helps win treatment and disposal contracts
  4. Proven track record helps win more business

For those businesses either in or entering the sector the outlook is positive. Estimates predict revenue to reach $2.8bn by 2024-5 and profitability to increase too. This growth will be driven both from increased population growth fuelling household waste volume and more demand from manufacturing and construction.

Larger companies in Victoria and NSW are expected to see a boost from centralisation. Employment levels in the sector will increase and there will be a small increase in the overall number of businesses to 910 across Australia.

Source: IBISWorld Waste Treatment and Disposal Services in Australia

How Classic Funding Group and Cashflow Finance can help 

Capital Intensity is high and expected to increase. Greater investment in plant and waste processing equipment is needed together with transport vehicles.

For businesses considering buying either new or used equipment, Classic Funding Group can provide Equipment Finance which is backed by the asset. For smaller loans, minimal financial information is required providing the company has been trading for over 2 years.

Loans go up to $1m and can be arranged directly or through a local broker.

Revenue volatility is rated as Medium. For any business that is experiencing high volatility, a cash flow solution may be useful. This can provide daily flexibility on funds in use with a facility in place.

Learn more about Cashflow solutions by Cashflow Finance.

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