EnviroWaste's chairman Kim Ellis says he sees a "big upside" for the company based on what he expects to be increased landfill fees in the Auckland region later in the decade.
Sir Li Ka-Shing's Cheung Kong said on Tuesday that it had bought EnviroWaste for $501 million from private equity company Ironbridge.
Hong Kong-based Cheung Kong said the transaction is expected to be completed in the second quarter of this year.
Ellis said landfills were a sensitive part of the waste management business and that volumes had been down slightly over the past two years, reflecting in part a slackness in the economy.
"But the fundamental drivers of the business are very good," he said.
"The economy is recovering now and you can see long-term volume growth, but at modest levels."
A key driver for EnviroWaste will be Transpacific's Redvale landfill at Dairy Flat, north of Albany, which was once under Ellis's control when he headed up the NZX-listed Waste Management before Transpacific took the company over in 2006.
Ellis said Redvale was the mainstay for waste disposal in the northern part of Auckland, but that its consents would be completed by 2023.
"The market will feel the effects of this going into the latter part of this decade," Ellis said.
"Transpacific will need to start moving prices to reflect the fact that they will need to build a new landfill that will be further out of town," he said.
"That's the single biggest upside for EnviroWaste going forward." Transpacific also has a joint venture with Auckland Council at Whitford.
Waste management in New Zealand is a duopoly between EnviroWaste and its far larger competitor, Transpacific.
EnviroWaste's landfill at Hampton Downs accounts for about 30 per cent of annual landfill volumes in Greater Auckland and is New Zealand's largest landfill by capacity.
The landfill is consented to receive waste until 2030 but has the capacity to continue for decades to come.
CKI's group managing director Kam Hing Lam said EnviroWaste was underpinned by attractive, long-life infrastructure assets that featured high barriers to entry - the scarcity of land available for use as landfills, long and onerous consenting processes, and high up-front capital costs. APNZ