Viridor’s outgoing CEO offers his waste vision
Colin Drummond retires in September. From working at the sharp end to directing the business in the boardroom, he reflects on an industry that is undergoing huge change. Interview by Nick Warburton
John Roy is probably not a name that people in the waste industry will be familiar with. A fictional character in the Channel 4’s series Undercover Boss, Roy was none other than Viridor’s head honcho Colin Drummond, who steps down from his role as chief executive later this year.
The Northern Irishman’s willingness to get his hands dirty and work at the sharp end says a great deal about this man. But then perhaps it’s his openness to new ideas and his approachable persona that have helped him to steer one of the UK’s leading waste and recycling businesses through a period of impressive growth.
Viridor has changed beyond recognition in the 20 years that he’s been in charge, when it began as Haul Waste, a medium-sized, regional waste disposal company in the Southwest.
Back in 1992, when Drummond was executive director of South West Water, few could have predicted that his first major acquisition for the water company would go on to become such a pivotal player in the UK waste and resources market.
However, as Drummond explains, while it was clear that Viridor, as it became, had developed into a highly profitable landfill business, a narrow focus on waste disposal was not a sensible proposition long-term. By the early 2000s, Viridor had made a decisive shift towards recovery though recycling and energy from waste (EfW).
“We saw the way the UK economy was growing and probably moved earlier than most,” he reflects.
“With increasing landfill tax and what people wanted in the UK, it was clear that there was going to be much more recycling and that the residues that couldn’t be recycled, the only option, if you weren’t going to landfill them, was to burn them.”
Drummond is proud of what local authorities and the waste management sector have achieved in the intervening years. Together, he argues, they have defied expectations by pushing recycling from less than 10% in 2000 to nearly 50%.
“Many commentators said it would never happen,” he says. “The Brits don’t want to do recycling; the Germans will do recycling. But the fact that it has happened has been the result of some clear thinking by our customers and hard work by ourselves.”
A keen EfW advocate, Drummond has called on the Department of Energy & Climate Change to set specific targets for generating electricity from this valuable resource. He argues that waste as a feedstock could readily generate 6% of electricity generation but adds that this is a modest estimation.
“The Institution of Civil Engineers and separately the Institution of Mechanical Engineers estimate that waste could be 17-20% of electricity by 2020.”
Viridor has invested heavily in EfW and has committed £1.5bn to support its take-up. Its current energy output stands at around 137MW. However, Drummond has stated publicly that his ambition is to push Viridor’s energy output beyond 300MW by 2015-2016.
But gaining planning consent to build the infrastructure the UK needs to meet its insatiable demand for energy is rarely straightforward; often it is cited as a major barrier to the development of EfW facilities. Drummond, however, does not believe the problem lies with the planning system.
“I am a bit of a convert and I think the system now works reasonably well. It’s never going to be easy because we’re a democracy and we have to have checks and balances,” he says.
“But the one thing that still needs to be addressed is the country’s knee-jerk reaction to go for judicial review. Once someone doesn’t like an outcome, they immediately call a judicial review. So many of those calls are thrown out…and I think we have to get away from this mentality of unjustified judicial reviews.”
Drummond is critical of what he feels are often delaying tactics and complains that such actions are extremely damaging to the industry and the wider economy.
He highlights a widely publicised case involving Viridor and Oxfordshire County Council where the delay caused by a judicial review cost the county council £14m, even though the EfW plant concerned had gained planning permission from the Secretary of State.
“This is the green economy and we want to be creating jobs; these knee-jerk calls for judicial review are preventing that,” he argues. “This isn’t to say that all judicial reviews are wrong but we need a way that we can quickly sort the wheat from the chaff.”
Drummond is clearly passionate about the waste industry’s role in the wider economy. Drawing on figures from the UK Committee on Climate Change, he says that over the past 10 years, the sector has shown the greatest carbon reduction of any UK industry.
“The UK has put in some very good mechanisms, notably the renewable obligation scheme which provides good financial incentives to capture methane rather than let it go into the atmosphere,” he explains.
“We’ve seen it as a big profit opportunity to do what is good for the environment. It is one reason why I say green is good for business; you should understand the incentives out there and embrace them, rather than seeing the green agenda as a threat.”
Faced with a sluggish economy, Drummond insists that the Government must continue with the financial incentives that have been proven to work, and resist imposing any additional, heavy-handed regulation.
However, he would like to see firm and consistent enforcement of existing regulations. All of these measures will provide certainty in the market.
“If the Government started making crass changes to regulation, it could spook our investors,” he warns. “This message I think the Government understands very well as did the previous one but you just have to keep giving that message.”
Another area that Drummond feels strongly about is the waste industry’s huge potential as a major employment sector in a green economy. The UK, he argues, does possess the high-level skills to enable the industry to fulfil its potential in this emerging market. The problem lies in the lack of basic employability skills.
One way to improve these skills, he says, is through investment in apprenticeship schemes. A former Classics graduate from Oxford, Drummond saw first-hand how important skilled workers are at the sharp end of a business when he went undercover during the Channel 4 series.
Nearing his retirement, Drummond says he’s never underestimated the skills within the organisation. A consummate team-player, he is quick to downplay his own role.
“If I’ve brought anything, and it’s only part of the story, I may have been able to crystallise strategies earlier than others but it’s not a solo effort in any way at all,” he confides.
“I think the strength of Viridor has been that it has had the right strategy and it’s also had an incredible team at every level delivering the strategy.”
Nick Warburton is editor of LAWR
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