EMR boosts profits despite weaker commodity prices

EUROPEAN Metals Recycling (EMR), the Warrington-based scrap metals processing giant owned by the Sheppard family, increased pre-tax profits by 43% to £91.1m despite a significant drop in volumes and weaker commodity prices causing a 40% drop in sales to £1.84bn (2008: £3.1bn).

The company said that “challenging market conditions” which had begun in the latter part of 2008 continued throughout last year.

A directors’ report accompanying its accounts said that the firm’s refinancing of its UK operations in January 2009 had provided “additional liquidity” which meant it continued to invest in new technology for recovering useful metals.

It finished the year with net assets of £500m – up from £458m in 2008.

“The recycling sector has, for many years, been highly efficient in recovering metal from end of life consumer-related goods but typically this only allows for 75-85% recycling rates. To increase recovery rates further requires new technologies to process a very complex waste stream of mixed plastics rubbers glass and textiles.

“Good progress has been made on this front with new developments scheduled to significantly increase recycling rates to around 99%,” the report said.

For instance, EMR last year set up MBA Polymers UK Ltd – a joint venture firm which separates mixed plastics and converts those that can be recycled into plastic pellets that can then be re-used.

A factory being set up in Worksop which is due to be completed in the autumn of this year will be capable of generating around 80,000 tonnes of recycled plastic a year once it goes live.

EMR has also signed a joint venture with Chinook Sciences to build gassification, or energy from waste plants, to take all of the residual goods which can’t be recycled and to use them as fuel for generating electricity.

The company now operates from 120 locations around the world and employs around 2,250 people.

Directors said that the firm was “fully committed to investing in new technologies and collaborations which will continue to put it at the forefront” in meeting tough recycling targets set by the EU for both vehicles and electronics recycling.

They also argued that the firm was well-placed to benefit from an expected recovery in the market for recycled metals.