CEO Insights: Mike Ritchie, MRA Consulting Group

What do you see as the single biggest challenge facing your industry in the year ahead?

The biggest challenge for recyclers is the mixed government market price signals around recycling, waste management and carbon. Some states are pushing ahead with strategic approaches to waste management by setting targets, establishing market price signals to capture externalities and long-term landfill liabilities, etc, and putting in place grants and strategies to drive reform. Others have much to catch up on.

The rise in state landfill levies and grants for recycling will see further growth in recycling industries and a lesser dependence on landfill. This offers new employment and economic growth opportunities to the more progressive states. Recycling offers massive green job and economic wealth creation opportunities for Australia. MRA works with business and government to improve recycling rates, improve waste practices and reduce business costs.

What do you see as the two or three biggest growth opportunities for your customers in 2016?

Waste generation is rising at 7% per annum. That creates a lot of opportunities for recycling, so long as the economics permit recycling to be financially viable. Business waste costs are rising at around twice the rate of inflation. That means waste costs are starting to bite the bottom line. More businesses are seeking strategic waste and recycling advice to reduce costs and ensure efficient business practices to reduce waste generation in the first place.

What emerging trends or developing technologies may influence or change the way your industry sector will do business in 2016?

Energy from waste will progressively replace landfill as the final disposal option for residual waste.

Recycling rates will continue to rise in the progressive states approaching 80% recovery over the next five years.

Conversion of commercial waste charges from volume-based (bin volume) to weight-based will provide businesses with a clear price signal on their costs of waste. It will encourage segregation of waste and, if they recycle, reduce business waste costs. Our hope is that waste starts to mirror the effects that smart meters have achieved in electricity consumption.

A clear climate change policy and targets will strengthen environmental controls and resource recovery in the waste sector.

What are your customers demanding of you more today than five years ago, and how will you meet these requirements in 2016?

MRA's customers are demanding economic evaluation of the costs of waste, carbon and recycling with a view to reducing costs and optimising environmental benefits. MRA has an expert team of scientists, engineers, lawyers and accountants able to develop realistic plans for businesses to reduce costs and achieve environmental goals.

What external impacts do you predict will have the most effect on your business in 2016?

Many of our clients are international companies (including Chinese firms) seeking to invest in Australia. The stability of the Australian currency and politics encourage such investment. MRA advises on such investment.

The Australian recycling industry is a significant commodity exporter (particularly paper and plastic). Strength of demand in China, and other parts of Asia, is critical to the supply chain. Fluctuations in the dollar also impact demand, as has the recent fall in commodity prices eroded the commercial viability of some recycling streams. While the industry has always experienced export price fluctuations, the growth in the domestic reprocessing and secondary use sector will serve to dampen the effects of international fluctuations.

MRA aspires to expand its service offering into Asia on a selective project basis, so the growth of Asia offers new and exciting consulting, project management and advisory opportunities.

Mike Ritchie is the Director of MRA Consulting Group (MRA), an environmental consultancy specialising in all areas of recycling and waste management for the public and private sectors.

He has a Masters of Business Administration (MBA), Master of Science (MSc) and Bachelor of Science with First Class Honours, along with over 24 years' experience working on a broad range of environmental projects. He is a member of the Institute of Company Directors.

Mike's knowledge encompasses a sound understanding of waste management, resource recovery, recycling, technology and economic analysis.