Higher crude oil product prices will drive demand for recycled alternatives, benefiting the industry
Los Angeles, CA (PRWEB) April 23, 2013
The Recycling Facilities industry has expanded over the past five years to 2013, with revenue expected to increase 1.4% annually on average to $1.1 billion during the period. According to IBISWorld industry analyst Deonta Smith, “This moderate revenue growth has mainly been due to technological advancements, increased waste volumes and regulatory standards that require the recycling use of products.” Reforms for recycling as part of Canada's 3R program (recycle, reduce and reuse) has led to regulations promoting the use of sustainable materials and increased waste volumes brought on by a recovery in downstream markets. Additionally, the Office of Greening Government Operations implemented standards to reduce greenhouse gas emissions and promote sustainability. More research continues to be conducted to demonstrate the treatment and cost benefits of recycling facilities.
The economic declines led to a reduction in overall waste and recycling levels, which in turn curbed spending among consumers of recycled material, which are reused in manufacturing and other business sectors. “In contrast, waste volumes have increased among households as this segment was provided greater access to recycling programs following the recession,” says Smith. The use of recycled material has been shown to lower total costs in consumer markets by reducing the overall input cost. As businesses looked for methods to reduce spending during the recession, the industry's progressively effective products grew in appeal. In 2013, the industry is expected to get a boost from the combination of the improving economic environment and continuing regulatory pressures in the provider market. During the year, growth is expected to accelerate to 8.3%.
The Recycling Facilities industry has a medium level of market share concentration. In 2013, the top three firms make up just over half of market share. Although the industry has a number of large operators, small- and medium-size businesses make up a large proportion of the market. Many of these companies focus on niche operations and products. The industry's overall concentration has increased as larger operators acquired smaller companies to gain their technologies and customers. However, as demands for recycled goods increase so will the number of operators; the number of enterprises is forecast to increase an average of 2.1% annually over the five years to 2013 to 112 companies.
The growing population size and increased breadth of products is forecast to bolster demand during the five years to 2018; during this time, revenue is projected to grow. Meanwhile, the world price of crude oil is forecast to pressure raw material prices for traditional manufactured products (e.g. plastics), as consumer product manufacturers ramp up production. This trend will spur growth within the industry, as recycled materials will be a lower-cost alternative to raw materials. During the five years to 2018, the number of operators is forecast to increase.
For more information, visit IBISWorld’s Recycling Facilities in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry operates material recovery facilities that separate and sort recyclable materials from nonhazardous waste streams (i.e. garbage). Firms also sort commingled recyclable materials, such as paper, plastics, used beverage cans and metals into distinct categories. This industry does not include municipalities and other government bodies that directly provide these services to the public.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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