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OPERATIONAL LEARNINGS 082015ANNUAL REPORT During our first 18 months of full operation we have already met a number of commercial and operational challenges which is typical of what would be expected from an early-stage service. We know for example that very large multi-site customers procure a huge amount of services from their contractors or brokers and as such can command a very low unit cost price. For large companies with big purchasing power paper cup recycling is now fast becoming an obligation and therefore urgently need our services even though we may not be able to match their very low unit price. We can however combat this by implementing a number of measures that bring additional value such as identifying cost savings elsewhere in the supply chain as well as addressing their sustainability needs. For example we can introduce recycling bins that greatly improve the segregation of paper cups preventing them going into general waste bins which will be cheaper for the client. And now that ordinary paper cups can be recycled customers can switch away from the more expensive compostable equivalents. Furthermore the customer now has full traceability of paper cup disposal and can genuinely demonstrate they are being recycled as opposed to being sent to landfill or incinerated. Since most consumers have been under the misapprehension that paper cups have always been recycled just like other paper products behavioural change is required so that people understand that paper cups now need to be treated differently. We believe therefore that a key factor in the success of a clients paper cup recycling initiative must be a strong focus on consumer engagement. Over the last year weve put resources into developing educational programs and events often at the clients site to reinforce segregation and recycling. For the client this means that there is less need for additional manual sorting and therefore fewer additional costs. OPERATIONAL LEARNINGS The success of the scheme has also meant we have had to far sooner address the issue of establishing collections outside of the initial area of operation essentially London and the Thames Valley. This was easily solved though since Simply Waste Solutions already has a robust a sub-contractor network throughout the UK which means that we can service many more customers at the same competitive rates and with the same efficiency. We have also learned that to maximise recycling rates we need to provide the reprocessors with good quality material that is free as possible from contamination. This also means ensuring that the material once collected and stored at our transfer station is efficiently bulked to avoid material degradation. To achieve this we are now sending smaller loads more frequently to the reprocessing plants. The processors themselves have also been quick to adapt. Before the paper and plastic components are separated the paper cups first needed to be shredded and ideally before they reached the reprocessing plant. This was initially a logistical issue for us but however we are delighted to report that the reprocessors are now able to receive unshredded paper cups therefore eliminating a major add-on cost.