East Midlands-based Johnsons Aggregates & Recycling has secured a £10m funding package to support the construction of the UK’s most technically advanced plant for recycling incinerator bottom ash (IBA), and the company’s long-term growth plans. BGF (Business Growth Fund) has provided £5m of equity capital and NatWest has provided a further £5m debt facility.
The new £11m recycling facility, located on a seven-acre freehold site in Stanton, Derbyshire, will be fully operational by early 2017. Johnsons currently recycles around 150,000 tonnes of IBA every year. The new plant increases this capacity to 450,000 tonnes per annum.
IBA is created by Energy-from-Waste facilities during the process of converting household and commercial waste into energy. This incineration process creates IBA which is deemed a waste product historically sent to landfill. Johnsons extracts metals from the IBA and turns the residue into a quality aggregate suitable for the construction industry thereby avoiding any material going to landfill.
Britain falls significantly behind other European countries in its IBA recycling capacity. The industry is heavily regulated and Johnsons is one of a very limited number of companies in the UK with the capability to recycle IBA. Johnsons will operate one of the most advanced IBA facilities in the world, providing the highest levels of extraction of recyclable materials.
Founded as an aggregates business by CEO Steve Johnson in 1999, the business will also use BGF’s funding to pursue organic growth across its other services, which include the supply of virgin and recycled materials, and land remediation. The company, which employs 50 people at its existing facilities, achieved annual revenues of £11m in 2015. Jon Earl, who led the transaction for BGF, and Paul Capell, an experienced industry executive, have both joined the board.
Steve Johnson, CEO of Johnsons Aggregates & Recycling said:
“The completion of the Stanton facility, which has taken five years of planning and execution, will be a huge milestone for the business. It will significantly increase our processing capacity and efficiency and provide a gold standard for IBA recycling in the UK.”
“We could have continued to fund this project without BGF’s financial backing but their ability to provide longer-term support puts us on a great footing as we implement our expansion plans.”
Ben Rookes, Corporate Finance Partner at Cooper Parry, said:
“We are delighted to have acted for the shareholders of Johnsons Aggregates & Recycling on BGF’s growth capital investment. This is a highly impressive business and management team that are well placed to capitalise on future growth opportunities in the IBA sector”.
BGF’s Chairman Sir Nigel Rudd, who visited the new facility this week said:
“Commercially, this is a very astute investment. Steve has built a fantastic business with significant growth potential, and he has great determination to deliver that expansion. BGF’s ability to invest without taking control and its long-term approach were clearly important factors in his decision to partner with us, and we are delighted to be supporting the company alongside one of BGF’s shareholders, RBS.”
Chris Bodger, Director at NatWest, said:
“It’s an exciting time for Johnsons Aggregates & Recycling, and the addition of the site in Stanton will assist the firm in its future growth strategy. We wish the business every success for the future.”