Tauranga waste collection business Kleana Bins in voluntary administration

John Cruickshank's 20-year-old business Kleana Bins has gone into voluntary administration. Photo / NZME

Tauranga business Kleana Bins is in voluntary administration less than one year after new council-led kerbside rubbish collection services began in Tauranga and the Western Bay of Plenty.

Kleana Bins, a 20-year-old business once said to be worth $3million, expected to lose 80 per cent of its turnover last year after council decisions to launch rates-funded kerbside collections. These began in July, with Envirowaste winning the contract.

Previously, many residents contracted private companies such as Kleana Bins to pick up their rubbish and recycling.

A public notice published on May 17 said the company had gone into voluntary administration.

Voluntary administration is available for failing businesses to explore options with the help of administrators who must be licensed insolvency practitioners.

John Cruickshank's 20-year-old business Kleana Bins has gone into voluntary administration. Photo / NZME

The notice said Thomas Lee Rodewald and Paul Thomas Manning were appointed administrators of the business on May 16.

As administrators, Rodewald and Manning would be able to take control of and investigate the financial affairs of the company, report their findings to creditors and make recommendations for the future of the business.

The first of at least two required creditors' meetings took place last week.

After these meetings, creditors will vote to pursue one of three options.

The company could be returned to its operators, entered into a deed of company arrangement or placed into liquidation.

If Kleana Bins is returned to its directors then it could go back to being a registered business.

A deed of company arrangement would try to save the company while minimising losses.

Liquidation would mean closing down Kleana Bins for good.

New council-led kerbside rubbish collection services began in Tauranga and the Western Bay of Plenty mid-2021. Photo / NZME

Kleana Bins operator John Cruickshank declined to comment.

Cruickshank told the Bay of Plenty Times in March last year that his business was worth three to $4 million before the council's decision.

He said the business would be left with 8000 useless bins and would also have to get rid of several trucks.

At the time, he had planned to look for a smaller premises to operate from and pick up more work servicing rural areas of the Western Bay not covered by the council collection.

Tauranga City Council sustainability and waste manager Sam Fellows. Photo / NZME

Tauranga City Council sustainability and waste manager Sam Fellows said waste operators were involved in drafting the council's current waste minimisation plan.

The council's next plan is due out for public consultation later this month.

"Our tender process in early 2020 was open to all bidders and one of our key focuses was ensuring jobs for local staff at the living wage or above.

"Tauranga City Council has waived licencing costs for operators during the transition to the new kerbside service and offered smaller operators the option of reduced or free fees for recycling of surplus or past end-of-life bins."

Fellows said there was room for other kerbside collection providers to focus on the commercial market, where there was growing demand.