Alistair Houghton meets BILL SHAW, CEO of Environmental Waste Controls, in Knowsley

IT’S not often that you can impress a roomful of investors by dropping a bag of rubbish on their table.

But that’s how Bill Shaw is launching Environmental Waste Controls (EWC) on the stock market.

Knowsley-based EWC is proving the old saying that “where there’s muck, there’s brass”. It turns over more than £23m from the waste management services it offers to councils and businesses across the UK.

Now it plans to float on London’s Alternative Investment Market to raise £4m to further growth plans Shaw describes as “aggressive”.

Shaw, who became EWC’s chief executive last year, is this week meeting potential investors in London. And to showcase what the company does, he carries a “bag of props” containing a piece of used copper wire, a scrap of fabric and a chunk of plastic.

He is telling investors how EWC plans to invest in larger recycling sites to sort the waste it collects so it can make more money from it.

“One thing I’ve learned since being involved in this company,” he says, “is that there is value in waste. I’m almost convinced there’s no such thing as waste.

“More and more, every waste product can be turned into a resource. It’s just a question of how difficult it is to do that.”

EWC operates 30 household waste recycling centres for local authorities in seven areas, including Warrington. Its commercial arm collects and sorts waste from 300 UK firms. In the year to last August, EWC posted sales of £23.8m, with a pre-tax profit of £2.1m.

But Shaw and the management team have ambitious plans to grow sales to £40m and beyond.

The key, he says, is opening more large Material Recycling Facilities (MRF) centres, to give EWC staff room to sort waste before selling it to other recycling firms.

And, to demonstrate that point, Shaw brings out the props bag.

“Copper wire is a good example of adding value,” says Shaw, brandishing a piece of wire encased in yellow and green plastic.

“If an electrician does a rewire at your house, you’re left with half a reel of cable. It sits in your garage, then you find it four years later and throw it in a skip.

“We could bale that wire and sell it to a commodities dealer for £1,800 a tonne. But if we get a plastic stripper and strip off the coating, you’re talking £5,500 a tonne for the copper, and £200 a tonne for the plastic.”

Shaw next pulls out a piece of card, and says: “Typically, unbaled, we could sell this for £30 a tonne. Simply bale it, and it’s £130 a tonne.”

Next comes a piece of cloth. Shaw says that by sorting clothing, rather than simply baling it all together, it can be sold at higher prices.

Finally, Shaw pulls a piece of plastic from his props bag.

“Baled, this is worth £200 a tonne,” he says. “But, if we have the space to operate in, we can granulate it.

“It ceases to be waste and becomes a raw material, and we can sell it back to the plastic moulders who made it in the first place. And it goes from £200 to £800 a tonne.”

EWC already has MRFs – Shaw pronounces that “merfs” – in Knowsley, Neath Port Talbot and London. By the end of this year, it hopes to have opened sites in London, Leicester and East Kilbride, near Glasgow.

Shaw says EWC may consider opening an MRF in the West Midlands – a densely-populated area with a shortage of recycling sites.

To open these MRFs, EWC needs cash – hence its aim for AIM status. But there are, says Shaw, other advantages to flotation.

“The funds will help,” he says. “They will clear most of our debt.

“There’s also a kudos attached to being listed.

“We have our eye on some tactical bolt-on acquisitions. Being able to offer shares will help with that.

“And being able to offer shares help us to retain the staff we have now and attract those will need in the future.

“Our founder, Bill Edwards, has always had the ambition to float the business at some point. Now we feel the time is right.”

Edwards founded EWC in 1993 and still owns the firm. He has now stepped back from day-to-day management at the firm, but will retain a large stake after it has floated.

Shaw says: “For me, he’s a great sounding board. It’s useful to have someone like Bill to call on.

“We have an aggressive business plan. We plan to do £24m this year, then £28m next year, then £35m, then £40m. It excites me, Bill and the rest of the team.”

Evertonian Shaw is a chartered chemist who joined the North West Water Authority – now United Utilities (UU) – 35 years ago.

By the time he left UU last year he was its operations director, leading the provision of water and waste water services.

Three years ago, Shaw decided to gain new experience by taking on another directorship – and joined the board of EWC. He says: “I got the benefit of working with Bill Edwards, an entrepreneur, at an organisation that is a lot smaller and more nimble than a necessarily bureaucratic organisation such as UU.”

Shaw retired from UU last March and joined EWC as part-time chief executive. He says: “I worked for three days a week until July, but it became obvious that if we were going to take the business to the next level, we couldn’t do it with a part-time chief executive.”

Shaw says the demand for recycling services will continue to grow as the Government continues its push to reduce the amount of waste going to landfill and as more and more green regulations are introduced.

But, he says, members of the public are also keen to do their bit.

“If people go to our civic amenity sites,” he says, “the first thing they see is a meeter and greeter, who helps them to recycle.

“But if you take a step back, you’ll see it’s the members of the public that do all the work. Our guys are there to educate and direct people, but it’s the members of the public who go from receptacle to receptacle, getting stuff out of their car boots. We cannot make them do it – they want to do it.”

Shaw is also confident that EWC can win more local authority contracts based on its track record.

“We have 13 sites for Leicestershire County Council,” he says.

“When we took over the contract, the recycling rate for those centres was 39%. Three years later, it was 74%. That saves the council £1.4m a year in landfill costs.”

And EWC is still thinking of new ways to make money from the waste it already processes.

One idea is to start reconditioning the many televisions dumped at its sites, so they can be sold abroad. And another venture will surely interest the bargain-hunters of Knowsley.

Shaw says: “We end up with thousands of items of bric-a-brac at our civic amenity sites – such as pictures and ornaments.

“So we take a lot of that bric-a-brac to an auction that we run in Leeds. We turn over £40,000 a month from that auction. We plan to open another auction house in Merseyside. We’ll house it somewhere in Knowsley. It’s a way of driving value from waste.”

Shaw, who lives in Warrington, is a keen golfer. But he expects that working at EWC will keep him away from the golf course for some time yet.

“This business is exciting for me because I really believe in it,” he says.

“I will be investing in this organisation. I believe in the team and I believe in the sector.”