November 28, 2013 / 5:05 PM / 4 years ago

Veolia expects rapid growth in agribusiness waste

4 Min Read

* Sees sales to agri-food sector up 50 pct to 1 bln euros

* 11 bln euro market grows as recycling technology improves

* Mars factory's waste water produces gas to cut energy bill

PARIS, Nov 28 (Reuters) - France's Veolia Environnement expects revenue from food and agricultural firms to grow by over 50 percent to 1 billion euros ($1.4 billion) in a few years from 650 million in 2012 as regulation and cost-cutting drive them to recycle.

The water, waste and energy services group said it was offering to recycle water and turn biological waste into fuel or reusable commodities for drinks makers, breweries, coffee makers and agricultural industries.

Veolia Chief Executive Antoine Frerot said the global food and agriculture sector already spends some 11 billion euros per year on subcontractors to handle its waste and water and that this market would grow as Veolia and its competitors develop new recycling technologies and as regulation curbs waste production.

"It is a technological arms race to create new markets for waste," Frerot told reporters on Thursday.

Veolia, the world's largest private supplier of drinking water, aims to reduce its dependence on municipal water contracts by focusing more on providing waste and energy services to industrial clients.

Veolia recycles factory waste water for soft drinks makers such as Coca Cola and Pepsi, brewers such as AB Inbev and Heineken and food companies such as Nestle and Kraft Foods .

Frerot said that over the past year Veolia had signed a string of new contracts with food and agriculture firms including the Mars chocolate and candy factory in Veghel, Netherlands, where Veolia produces biogas from waste water.

Veolia turns the sugars, chocolate and other biological residues in the plant's waste water into methane, cutting its energy bill by 10 percent, he said, declining to give financial details about individual contracts.

Technology Factor

For Kent, UK-based Bakkavor, maker of ready-made salads and meals, Veolia recycles water used for washing vegetables, cutting water consumption by 70 percent. For drinks maker Diageo in Speyside, Scotland, Veolia turns malt waste into fuel that generates half of the steam used in the plant.

Frerot said that many of its contracts hinge on finding ways to turn waste into a resource.

For French cereal group Limagrain, Veolia produces heat from corn cobs, which must be burned slowly and at low temperatures to prevent vitrification of the ashes and damage to the furnace. For Dutch instant coffee maker DEMB, Veolia filters out waste water to recover coffee dregs and then burns them for fuel.

Technology is the main factor that determines whether a type of agribusiness waste can find a new use, Frerot said.

At Veolia's new methanisation facility in Arras, northern France, which treats some 25,000 tonnes of organic waste per year, agricultural businesses mostly pay the company to take the waste off their hands.

"Once somebody finds a better use for endive roots, farmers will no longer pay us to recycle it," he said.

Last year Veolia posted net profit of 394 million euros on revenue of 29.4 billion euros.

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