Market Conditions Prompt Mothballing of Sapphire’s Avonmouth Site

The Avonmouth based waste tyre chipping facility opened by Sapphire Energy Recovery last August has been ‘mothballed’ as a measure to counter difficult trading conditions in the used tyre collection and processing market. The stopping of operations at Avonmouth, says Sapphire, has been taken as a measure to maximise operational efficiency, whilst maintaining quality and reliability of supply to its customers. The company adds that the decision to do so was made following “continued difficult trading conditions” in the used tyre market with increasing demand for more economical waste-derived fuels by the building materials market.

“Whilst we are continuing to meet the same customer volumes, the tyre collection and processing market is becoming increasingly challenging and we need to make our network more efficient,” explained Sapphire Energy Recovery general manager Ryan Hodder. “Whilst a relatively new site, Avonmouth has played an important part in our network and it is with regret that due to current market conditions we are unable to continue operations at the site.  

“It is important to state that we have taken steps to reduce our operational network as an efficiency measure, we are still maintaining the same volumes and customers by maximising capacity utilisation at our remaining operational sites at Cauldon, Dunbar, Oldbury, Manchester and West Thurrock,” Hodder added. “We can therefore offer the market the same processing capacity whilst operating fewer sites. Whilst downsizing our operations is regrettable, it is necessary for us to remain competitive.”

Commenting on the wider industry challenges, Hodder added: “Our actions are against a backdrop of a volatile used tyre collection and processing market in the UK. Prices continue to be driven down for collectors and processors. To remain competitive and viable we as an industry need our costs to be competitive and market fees healthy.  In the challenging economic environment, there is a risk that the increasing cost of tyres means that other waste-derived fuels look more attractive from a cost point of view.  

“Sapphire will continue to responsibly manage our volumes through our existing processing facilities, but until the market stabilises we will need to continue to review our operations and respond accordingly,” the general manager concluded.