Investing in waste management and recycling provides investors with opportunities to generate solid returns and embrace sustainability, which explains investors’ appetite for greenfield projects in this space.
GlobalData’s FDI Projects Database has tracked 139 greenfield waste management and recycling projects, announced or opened, throughout 2019 (53% of the total) and 2020 (47%).
The majority are new projects (76%), but there are also cases of expansion (19%) and co-location (5%).
Co-location projects have been announced or opened in France, India, Nigeria, the Philippines, Romania, Russia, and the US.
When it comes to expansion projects, locations include Austria, Colombia, the Czech Republic, Denmark, France, Germany, Hungary, Poland, Russia, Serbia, Slovenia, the UK and the US.
The data shows that 43% of the projects were in sectors related to remediation and waste collection, treatment and disposal activities, 12% in water collection, treatment and supply, and 6% in waste-to-energy power. Other sectors that have attracted projects include primary-form plastic (4%), plastic packaging (4%), miscellaneous plastics (3%), and corrugated paper and paperboard and general packaging and containers (3%).
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Top FDI locations for waste management
The data shows that 45 countries have attracted projects in waste management and recycling over the two-year period under review.
The top five countries in terms of attracting the highest number of projects over this period are the US, Russia, the UK, France and Germany .
The US attracted 25 projects, out of which 18 were announced or opened in 2019 and the rest in 2020. China was the source country in four projects, Spain and the UK three, and Mexico, Italy and the Netherlands two. The rest of the projects were from investors based in Australia, Canada, Eswatini, Finland, France, Germany, India, Ireland and Singapore. The majority of the projects in the US were in sectors related to remediation and waste collection, treatment and disposal activities, and miscellaneous electronics.
There were eight projects in Russia in 2019 and 2020, with the investments coming from Austria, Germany, Italy, Slovakia, South Korea, Spain, Switzerland and the US. The majority of projects were in sectors related to remediation and waste collection, treatment and disposal activities. Other sectors included animal feeds, miscellaneous plastics, and water collection, treatment and supply.
The UK also attracted eight projects, out of which six were announced or opened in 2019 and two in 2020. The US and Germany were the source countries in two projects, and France, Canada, Spain and Mexico in one. There were six projects in sectors related to remediation and waste collection, treatment and disposal activities, with the rest in miscellaneous plastics and water collection, treatment and supply.
France attracted eight projects over the same period, with two coming from Mauritius. China, Denmark, Finland, Norway, Singapore and the US were the source countries for the others. The waste management and recycling projects were in sectors related to semiconductors and electronic components, waste-to-energy power, primary- form plastic, plastic packaging, corrugated paper and paperboard and general packaging and containers, and miscellaneous plastics. Other sectors included water collection, treatment and supply and remediation and waste collection, treatment and disposal activities.
There were eight recycling/waste management projects announced or opened in Germany over 2019 and 2020. France and Norway were the source countries for two projects each, with Turkey, Switzerland, Finland and Spain making up the rest.
The majority of the projects are within the remediation and waste collection, treatment and disposal activities sector. The rest of the sectors include waste-to-energy power, basic precious and non-ferrous metals, and primary-form plastic.
Top FDI investors in waste management
The data shows that of the 35 countries that have backed cross-border projects in waste management and recycling over 2019 and 2020, the majority come from China, the US, the UK, Germany and France.
China was the source country in 13 foreign direct investment (FDI) projects, with destination countries including Colombia, France, Kenya, Mexico, Peru, Serbia, the US and Uzbekistan.
US investors invested in ten FDI projects, located in countries such as Belgium, Denmark, France, the Philippines, Romania, Russia, the UK and the United Arab Emirates (UAE).
Investors based in the UK backed nine waste management and recycling projects based in Indonesia, Italy, Kenya, the Netherlands, Spain, the UAE and the US.
German investors backed projects in the Czech Republic, Poland, Russia, Slovenia, the UAE, the UK and the US, while their French counterparts established operations in Belgium, Germany, Indonesia, Sri Lanka, Thailand, the UAE, the UK and the US.
Backing cross-border projects is key for a company's diversification strategy, as investors spread their geographical exposure in different areas and minimise risk. However, it is key that investors maintain the same corporate responsibility standards in their headquarters as they do in their destination countries. Thus, embracing environmental, social and governance criteria should be at the forefront of investors’ agendas in order to future-proof their investments in both source and destination countries.