Programme:Northern Powerhouse Investment Fund
A recycling business which takes household waste destined for landfill and turns it into fuel secured a £575,000 debt funding package from Lancashire Rosebud Finance and NPIF – FW Capital Debt Finance, which is part of the Northern Powerhouse Fund.
The money will allow Lancashire Waste Recycling to invest in new plant, expand its market and create 15 new jobs over the next three years. The company will be the first in the UK to offer solid renewable fuel (SRF) pellets, which are in growing demand worldwide as a replacement for coal in heavy industry.
Currently Lancashire Waste Recycling produces fuel in the form of shredded material which is used in cement kilns. Now it is acquiring biomass boilers and plant to dry out the fuel and turn it into pellets, which can be used in almost any industry. The investment will allow the company to offer a product that is of better quality and more environmentally friendly than other European manufacturers, which make pellets from rubber tyres.
Lancashire Waste Recycling was founded in 2010 by serial entrepreneurs Paul Mellor and Jim Entwisle on a site next to Lancashire County Council’s waste processing plant. It now has a sister company, Envirofuel, which was established in 2016 and operates from a site in Hapton, Burnley. Between them, the two companies now process over 150,000 tonnes of waste per year and employ over 30 people. Rosebud Finance has provided finance for both companies in the past.
Rosebud Finance is managed by Mercia Fund Managers on behalf of Lancashire County Developments Ltd (LCDL), the County Council’s development arm.
Peter Rooney, Investment Manager with Mercia Fund Managers, said: “Lancashire Waste Recycling has been a pioneer in the industry. Turning waste into fuel significantly reduces the amount sent to landfill and provides a more environmentally-friendly alternative to coal. This investment will create a step change in the business, allowing it to become the UK’s first fuel pellet producer and the market leader in its field.”
County Councillor Michael Green, cabinet member for economic development, environment and planning, said: “The team at Lancashire Waste Recycling spotted a gap in the market, developed a high-quality product and since then they’ve significantly grown their company. Rosebud previously supported this company, and we’re proud to assist them once again. It’s always a strong endorsement when people come back to Rosebud for the support they need to fulfil their growth ambitions.”
NPIF – FW Capital Debt Finance is managed by FW Capital on behalf of the British Business Bank.
Andy Traynor, senior investment executive at FW Capital, said: “Our investment is helping Lancashire Waste Recycling meet growing demand in an expanding world-wide market, which will enable them to create new jobs and revenues in the North West.
Their production of SRF pellets is a UK first, of a higher standard than its European counterparts and demonstrates its truly innovative status.
“Cutting both carbon emissions and the volume of domestic waste that goes to landfill, reducing the UK’s reliance on imported fuels, and enhancing energy diversity and security for our industries are all direct benefits of this exciting technology.”
Sue Barnard, Senior Relationship Manager at British Business Bank, said: “We are pleased to provide the funding alongside Rosebud to allow Lancashire Waste Recycling to invest in new resources needed to bring its innovative product to the UK market. NPIF is dedicated to supporting the growth of small businesses in the North and we will continue to work closely with FW Capital to back more high growth companies in the Lancashire Region.”
Lancashire Waste Recycling was advised on fundraising by the corporate finance team at regional accountancy firm MHA Moore and Smalley.
Ian Waddingham, corporate finance manager at MHA Moore and Smalley, said: “It was great to be able to assist Lancashire Waste Recycling in unlocking this vital growth finance. We worked with the team to prepare the business plan and financial forecasts, and identified funding solutions for the company. It’s clear that exciting times lie ahead for the business.”
The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.
FW Capital Limited is regulated by the Financial Conduct Authority as a small authorised UK Alternative Investment Fund Manager under firm reference number 506719
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