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  • Dear Readers!

    When looking at the news over the last few months, one could gain the impression that we are witnessing the beginning of the end of global business. In addition to social stability, the aim and objective of any rational government policy must nevertheless be to secure and wherever possible augment the prosperity of citizens. Trade barriers and isolationism lead in the opposite direction. That is why the punitive tariffs or even the Brexit are not the best option. We do not need less globalisation, but rather more if together we are to meet the global challenges of the future. At least the compromise that has now been achieved between the EU and the United Kingdom would appear to offer a very promising temporary solution. 

    “Tomorrow starts today“, is a slogan at REMONDIS, and as a leader in water management and recycling, we and our roughly 32,000 staff members work day in day out so as to preserve the planet as a hospitable place with a high quality of life for coming generations. To this end, we need open borders and as few barriers as possible to business at the international level. REMONDIS is a global player. We provide solutions for our industrial and municipal customers transnationally and efficiently while leveraging considerable synergies. The services we offer are both rooted at the regional level and networked internationally and are unique in terms of their variety in the water management and recycling business. REMONDIS develops many different segments at the same time and ascribes to the principle of vertical integration. Our customers have access to a combined service portfolio ranging from the collection, treatment, recycling, recovery, transport, logistics and water management all the way to industrial services in the area of repair and maintenance. Our customers and partners profit from this, thereby making a contribution to environmental and climate protection. 

    Environmental protection and raw materials management are transnational. From this angle, one could see the Chinese ban on imports of dirty plastic waste, electronic waste, waste paper and additional waste fractions as a major opportunity. With its clear raw materials strategy, the Middle Kingdom is forcing the European recycling industry to change directions. To do this, Europe needs to redouble its own efforts, however. An eco-design directive for the recyclability of products should force all manufacturers to design their products in such a manner so that they can be 100% recycled at the end of their life cycle. The recycling industry should raise the quality of all recycled material to the primary level by means of greater investments in better sorting and recovery as well as innovative new processes. In this regard as well, REMONDIS has been underscoring its role as a leader in innovation with targeted investments. One very promising new strategy is to return plastic waste to its original chemical state, so-called chemical recycling. And last but not least, policy-makers should create a system of economic incentives to foster the use of recycled raw materials by industry. The best raw material is of no use if nobody is interested in buying it. Each and every municipality and city can serve as a good example in public tenders already now and prioritise the advantage to the climate instead of focusing only on the lowest price.

    REMONDIS is at present leading the way by serving as a role model and investing in new plants and equipment.  

    We hope you enjoy reading the new edition of REMONDIS aktuell.

    Yours truly,

    Egbert Tölle

A false perception

The spectre of alleged dominance of private recycling companies in the collection of household residual waste surfaces time and again in the minds of municipal decision-makers. A perceived concentration of private enterprises in the market is repeatedly alleged in municipal associations and the media, causing not only politicians on the left of the political spectrum at the federal and municipal levels to call for more responsibility to be assigned to the municipal level. High time for an objective view of the actual market situation. REMONDIS checked the facts.

The market share of municipal companies is growing

A direct comparison of market shares held by the three biggest private enterprises with those held by municipal competitors reveals a clear trend in the favour of municipal enterprises. Thus, the market share of municipal companies over the period 2006 to 2018 has risen from 38.7 to 48.5 per cent. Analogously to this, the market share of the three large
companies dropped by 9.7 per cent.

Municipal enterprises possess almost 50 per cent of the total market for collection of residual waste.

  • Collection of residual waste from households in Germany

     

A look at what the market is really like

In the debate, in part public, between municipal associations and private enterprises, the accusation of cherry-picking by private enterprises can be frequently heard, with it being alleged that these companies secure supposedly lucrative districts of cities, while municipal enterprises are left to attend to the remaining higher-cost ones. Here as well, a glance at the market produces a completely different picture:

25.5 million of the approximately 81 million inhabitants of Germany live in 80 major cities. Private collection and recycling companies only engage in the collection of residual waste in 17 of these major cities. Just for starters, collection takes place within the framework of public-private partnerships (referred to as KOPKO for short) in 15 of these cities, i.e. once again with municipalities holding a majority share. In 63 major cities, municipalities attend to the collection of residual waste completely on their own without any private involvement at all – incidentally including without having to charge any value-added tax for such if they are a public agency. In view of these figures, the accusation of cherry-picking appears unwarranted indeed.

Of the waste disposal enterprises responsible for collecting waste in major cities,

A bit more objectivity and fairness would be nice

Interestingly enough, regular market analyses assign public-private partnerships (KOPKO) completely to the private sphere beginning with a 20 per cent stake being held by the private enterprise, even though municipal partners have larger stakes in the joint ventures. Even then, the share of municipalities is still a sizeable 47.3 per cent. The rest is split up among all the various private enterprises, of which even the three biggest ones do not even come close to achieving a comparable market dominance.

Municipal special-purpose associations circumvent tenders, thereby further undermining fair competition.

In closing, one can pose the somewhat heretical question as to why assessments of the market from an anti-trust perspective generally ignore by far the biggest market actors - municipalities - completely. Like many other private enterprises, REMONDIS adheres to the slogan of 'may the better one win', pleading along these lines for objectivity and fairness in any analysis of the market and to uphold and preserve the principle of public tenders. Municipal enterprises should also take part in these tenders - subject to the same competitive conditions. Only in this manner can an optimum price be obtained - in the interest of those who pay the fees for these services.

“Re-municipalisation“ in collection of residual waste

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