North East recycling firm hit by fall in demand

Feb 5 2010 by Peter McCusker, The Journal

TAXPAYER-OWNED company Premier Waste Management plummeted to a £430,000 loss after a fall in demand, the loss of contracts and a problem with its recycling plant.

The company, which is owned by Durham County Council and Darlington Borough Council, has cut staff numbers by 60, with some of these being transferred to other employers.

Premier, based at Aykley Heads, Durham City, says it is pleased with its progress in commercial collections and has continued to expand its business outside of the region.

The company’s latest results, for the financial year ending March 2009, show turnover fell slightly to £39.9m, but pre-tax profits fell from £1.7m in 2008 to a loss of £432,541 in 2009.

The company declined to comment on its performance but a statement from chairman Sir Peter Carr, which accompanies Premier’s annual report, outlines the challenges it has faced.

He said: “The operation will continue to consolidate its position in the Yorkshire region and after the year end commenced collection services in the Humberside region.

“New services are not without initial cost and have contributed to the fall in the group’s profitability. However, their long-term value to the group should be significant.”

His statement went on to say that increased recycling targets were reducing demand for, and increasing the cost, of landfill. “Regrettably this meant the group has had to cut costs in this area and this has led to some redundancies and associated costs in the year.”

Stephen Thompkins, regional organiser for the GMB union, responsible from Premier members, said the company had been hit by the recession and increased competition.

He went on to say that some of the staff who left Premier had transferred to other public authorities who have taken their waste collection services back in-house.

While saying Premier was one of the better North East companies to work for, Mr Preston said the union was currently raising concerns with Premier over 60 of its remaining 290 staff, who are currently on final pension salary schemes.

He says the company wants to terminate the current pension contract and replace it with an amended one with less favourable terms. Its pension pot currently has a deficit of £1.5m.

The company has also had difficulties with its PARC (Premier Advanced Recycling Centre) household waste composting facility in east Durham which recently underwent a recommissioning exercise.

Last month Premier secured approval from Defra to operate the plant commercially following earlier problems dating back to 2008 with the temperature controls.

The plant takes household waste and converts it into compost.

Mr Carr adds: “The cost of the re-engineering process has been substantial.”