How to make a green business investor friendly

Investors
BGF
0

A new niche has opened up for green business; governments are now looking for alternative ways to getting rid of rubbish other than landfills.

That’s exactly what’s led to Scottish organic waste management company Keenan Recycling’s growth and possible expansion as the Scottish government plans to tighten measures in January 2016.

It’s just received a £2.2m investment from the Business Growth Fund after the independent investment company spotted the opportunity.

The family owned business is a prime example of a business who identified a good business opportunity, as well as a chance to do good by the environment.

Here’s more about them and the lessons you can learn:

Background

Keenan Recycling has a 14-acre facility headquarters in New Deer in Aberdeenshire. It launched its commercial food waste collection service in Aberdeen and Aberdeenshire in 2010.

Now, it processes more than 60,000 tonnes of waste each year, transforming it into British Standards Institute accredited compost.

It has won awards for recycling food, garden and other organic waste into compost for agricultural and horticultural use, reducing the need to use chemical fertilisers.

The company opened up another base at Linlithgow in August 2015 and has invested £700,000 in a fleet of six lorries to roll out its organic waste collection service to customers in Edinburgh and Glasgow.

Expansion plans

The investment from BGF will enable the company to go ahead with its expansion plans in the Central Belt.The firm is already collecting food waste from 600 clients and is on track to reach 1,000 businesses within a month.

The plans coincide with the Scottish government’s waste regulations in January 2014. The new rules mean all local councils have to collect food waste and all business that produce over 50kg per week can’t send leftovers to landfill sites.

It’s made the firm’s client numbers increase from 600 to more than 2,000 in less than a year.

BGF, the independent company providing growth capital for small and mid-sized businesses, will take a minority equity stake in the firm and a seat on the board.

The team

In addition to managing director Michael Keenan, it’s keeping it in the family and Claire Keenan has helped develop an “experienced” team.

Alongside BGF’s investment, Jim Clark, the founder of oil and gas waste management company MSIS, will join the board as chairman.

Clark is a serial entrepreneur, with sector and operational expertise in the waste management industry.

Director of the company is founder and investor Mel Keenan. He’s previously led a management buyout and subsequent sale of RGIT Montrose.

What the investors have to say

Don’t think investors aren’t watching what you do - the Business Growth Fund has been keeping a close eye on the waste management industry.

Richard Pugh, investor at BGF, said: “We have tracked Keenan Recycling for several years and have been impressed by how they have built a highly successful business with consistent growth of more than 30% per annum.

“The market backdrop continues to be supportive, with the Scottish Government committed to the tightest recycling targets in the UK, culminating in zero organic waste to landfill by 2021,” he added.

In addition, the team was seen as an asset for the BGF - meaning perhaps there’s something positive in having an experienced, well-recognised, all-family operation.

“The management team, led by Grant and Gregor Keenan have demonstrated that they can help local authorities and businesses meet these targets, with market leading levels of service. The business has won numerous business and environmental awards in recent years to support their position as the leading organic waste recycling business in Scotland.

“Now is the right time to invest as the business is expanding rapidly to meet demand in the Central Belt, and to prepare for further tightening of regulations in January 2016.”

It isn’t the first time the BGF has invested in this sector; it’s already put £7.5m in December 2014 into J&B Recycling.

Rachael Power
Small Business Editor
Sift Media
Share this content

Replies

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.