A fast growing recycling business secures funding
Europe's largest material recycling plant (MRF) in Kidderminster, owned by Lawrence Recycling & Waste Management is known as The Forge and recycles 250,000 tonnes of building and commercial waste per annum, cleaning and sorting materials such as metal, plastic, sand and stone, to prevent them having to be sent to landfill.
The Forge’s 16 acre site is large enough to process 250,000 tonnes of waste. To develop the site to its full capacity and help the enlarged group to reach its target turnover of £15 million, Lawrence’s Skip Hire, based in Worcestershire, approached Lloyds TSB Commercial Finance, which provided a tailored £1 million ABL facility.
This funding package allows the group to execute its expansion strategy by releasing the significant value of the combined business’ three sales ledgers.
Lloyds TSB Commercial Finance was introduced to Lawrence Recycling & Waste Management by James Grenfell at Orbis Partners LLP, which acted as lead advisor to the management team in the raising of £10 million of development capital in early 2009, from funders which included Maven Capital Partners (previously the private equity division of Aberdeen Asset Management) and the Advantage Transition Bridge Fund.
This investment was required to complete the refurbishment of The Forge, which has been fully operational for almost eight months and is expected to create 70 new jobs by summer of this year.
Calvin Williams, financial director of Lawrence Recycling & Waste Management, commented:
“When you’re a company with ambitious growth targets, it’s important to have the right funding in place to support your expansion strategy.We have a significant opportunity to develop our business further and aim to recycle 99 per cent of the commercial and industrial waste that is currently brought to the site, ensuring it doesn’t have to be sent to landfill. Last year we received a £10 million capital injection and, in addition to this, we wanted to make the most of the significant volume of debtors.
The ABL facility from Lloyds TSB Commercial Finance effectively unlocks the balance sheet, releasing working capital at a rate to suit our growth and putting us in a strong position for the future.”
Jon Myerscough, associate director business development at Lloyds TSB Commercial Finance, said:
“The market that Lawrence Recycling & Waste Management operates in is growing at a fast rate in line with landfill tax, which is currently increasing by £8 per tonne per year, recently rising to £48 a tonne. Companies also have a legal obligation to pre-treat waste before it goes to landfill, which provides an added incentive for firms to recycle and reuse materials, along with the reputational issues and importance of being eco friendly.
“These factors are all contributing to the success of Lawrence Recycling & Waste Management and we look forward to continuing our work with this fast growing firm as it expands further.”
Conservative Party leader David Cameron, who visited the site when the project was first announced, said at the time:
"It looks very impressive, and to have more recycling of building materials makes perfect sense. An initiative and enterprising scheme like this to recycle building materials can make sure that the gravel, shale, bricks and stones that we needs to build new houses can come from recycled sources."
April 2010