Veolia Environnement SA expects profit to grow in the business of treating and recycling hazardous waste like used fuel from refineries and chemicals from drugmakers and paint factories.
In the next five years, Veolia’s operating profit in the industry could increase 15 percent annually and sales by 10 percent as new rules take effect on how companies have to deal with waste, Chief Executive Officer Antoine Frerot said in Paris. Veolia’s hazardous waste sales jumped 30 percent to 782 million euros ($1 billion) in 2012 compared with 2009 while adjusted operating cash flow rose 43 percent.
“We believe that extracting value from industrial waste provides a competitive advantage for a company,” Frerot said today at a press conference. Veolia, Europe’s biggest water company, is investing about 80 million euros annually in new installations and research into ways factories can reuse what was previously considered trash.
Frerot, into his second of a two-year plan to curtail debt and scale back Veolia’s geographic reach, has announced a series of initiatives this year to take the utility into new businesses like nuclear dismantling and treating water from shale-energy drilling. The utility will focus more heavily on emerging markets and tackle the “most complex” environmental problems, he has said.
The European market for so-called special industrial waste is about 35 million tons a year, according to today’s presentation. Veolia sees “considerable” growth potential because it currently treats about 3 million tons a year.
“The economic balance is changing,” Frerot said. Companies that used to pay Veolia for removing waste now realize there is value that can be extracted from it.