The Business Herald’s markets and banking reporter.

Making a profit from waste

Living Earth general manager George Fietje hopes Auckland Council will bring in kerbside organic collection. Photo / Greg Bowker
Living Earth general manager George Fietje hopes Auckland Council will bring in kerbside organic collection. Photo / Greg Bowker

It sounds like the dream business model.

Companies pay you to take away their waste, which you turn into a product and sell for a profit.

For compost maker Living Earth, which is in its 18th year of operation and processed its millionth tonne of organic waste this month, that very business model is a reality.

The company gets garden and food waste from transfer stations, arborists and collection firms such as Auckland's Sunshine Garden Bag Company.

Living Earth general manager George Fietje said those organisations pay his firm to take the waste away.

"The alternative is for it to go to landfill," Fietje said.

"We offer a lower disposal cost than landfill."

After collection the waste is transferred to Living Earth's facilities in Auckland and Christchurch, where it is turned into compost and sold to farmers and home gardeners. A 40kg bag costs $12 at garden centres.

The company even outsources a portion of its bagging work to some of the country's toughest criminals.

Inmates at Auckland's Paremoremo Prison package compost in a special facility at the jail.

Fietje said Living Earth paid the Department of Corrections commercial rates for the work done by prisoners. "We're pleased to be part of a programme that has assisted the inmates there," he said.

Living Earth - 50 per cent owned by waste collection operator Transpacific Industries, with Forte Investments, a private equity firm, owning the balance - earns annual revenue of about $11.5 million.

Fietje, however, would not reveal its profits. "We're profitable, but it's a challenging business to be in."

The company struggled to collect enough raw waste materials to meet demand, but Fietje said that could change if the Auckland Council begins a kerbside organic waste collection service.

Christchurch has a kerbside organic collection service, which Living Earth collects waste from.

"In their draft plan [Auckland Council] are hoping that by 2015 they will have a kerbside organics collection in place," said Fietje.

"We think it will be great for Auckland and great for our business."

- NZ Herald

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