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Source: Company
With its broad range of services, 800s customer base is diverse and
ranges from municipals to the industrial, institutional and commercial sectors.
800 has posted healthy profits, with FY2014 revenue increasing by 17.9% to
S$115 million and net profit after tax improving by 57.1% (Chairman Statement,
2014); as of HY2015, revenue has increased by 95.4%, pushing current net profit
to S$4.6 million (800 super, 2015).
Table 1 - 800 Super year after year revenue & profits
ASSETS (BS)
Property, Plant & Equipment
Liabilities (BS)
Borrowings (current)
2010
$
35,256,071
$
65,190
$
18,107,871
$
2,611,880
2011
$
37,615,182
$
79,257
$
17,834,416
$
3,373,895
2012
$
50,697,000
$
19,046,000
$
20,315,000
$
3,389,000
2013
$
67,018,000
$
35,941,000
$
32,601,000
$
2,252,000
2014
$
91,593,000
$
51,835,000
$
50,041,000
$
6,772,000
$
5,255,352
$
5,642,817
$
5,076,000
$
17,429,000
Revenue
$
69,580,324
$
77,748,062
$
88,668,000
$
97,542,000
Net Profit
$
5,205,904
$
4,618,498
$
5,938,000
$
5,775,000
Borrowings (non-current)
$
28,055,000
$
114,959,00
0
$
9,072,000
REGION
CLEANING SERVICES
PROVIDERS
Public carriageways, pedestrian thoroughfare, recreational
Ramky Cleantech
1
South-east
800 Super
Waste
North-west
Management
Pte Ltd
South-west
substations, drains
Public carriageways, pedestrian thoroughfare, recreational
Centralbeaches, public parks, vacant state lands, periphery of HDB
north
electrical substations, drains
Public carriageways, pedestrian thoroughfare, recreational
Veolia ES
3
Singapore
Central-
south
North-east
Expresswa
Maintenance Pte
Ltd
y
Source: NEA
PESTEL ANALYSIS
The use of the PESTEL framework analyses the macro-environment in which 800
operates and identifies the forces that has the most impact on its performance.
Political
Singapore is a democratic country with a stable government and strong
ministerial and statutory administration. A highly urbanised and industrialised
island-city state with a limited land area of 704km 2 and a population of 5.5 million
(Department of statistics Singapore, 2015); it is essential for Singapore to
maintain a high-quality living environment. As such, the political direction,
legislature, general attitudes and investments in the WM industry is positively
emphasised upon and garners huge support. International Enterprise Singapore
(IE) actively pushes for the development of the industry and positions Singapore
Economical
Local companies hold a bullish sentiment on economic growth amidst global
risks, greater geopolitical uncertainties and a faltering global economy (Today,
2015). This confidence, coupled with Singapore economys modest continual
expansion and a GDP2.8% increase in 2014 (Bloomberg, 2015) creates an ideal
environment for 800 to expand current operations through avenues such as M&A.
800s current total asset of S$1.09 million as of 31 December 2014 and a flow of
stable income; also ensures financing (Gurufocuscom, 2015). General higher
economic growth also leads to higher incomes and spending, hence an increase
in packaging materials and more wastes generated equating to more business.
Additionally, with the governments heavy support for the industry in recognising
the rising costs due to labour, fuel and higher service standard demands; and the
subsequent implementation of key interventions such as re-zoning, uniform fees
and tariffs to ensure companies benefit from economies of scale to optimise and
realise efficiency gains and mitigate expenses (NEA, 2015); 800 with its two core
business segments in the PWC and IPC sectors is geared for expansion.
Social
Illustration 2 On average a person generates 1,370kg worth of waste. WM is a
Source: Zerowaste.sg
Source: Tradingeconomics.com
Source: Company
Technological
Technological developments in processes like collection, sorting, reprocessing or
end-use technologies in the WM industry is key to maintaining the competitive
edge of the company. IE Singapore spearheads local businesses growth and
expansion into the region via external partnerships by selling advanced WM
practices and customised solutions such as a Clean Development Mechanism
project to reduce emissions and the Semakau Landfill project.
Table 4 800 on the lookout for partnerships to expand in the region
Project
MOUs with:
1 WTE
FutureNRG Asia Limited and Solutions Using Renewable Energy Pte Ltd
in 2011
2
WM &
Recycling
Environmental
The option of using landfills to contain wastes is not a sustainable and viable
option for Singapore with its land scarcity and the amount of waste generated by
a rapidly increasing population. As such an advanced WM solution was
formulated to minimise land usage. In 2014, with 7.5tonnes of waste generated,
60% was channeled into recyclable materials, 38% was incinerated - which
provided 3% of Singapores electricity needs; and only 2% went to the Semakau
landfill. This is part of Singapores Green Plan (SGP) 2012 multi-faceted approach
to minimise waste through the 3Rs; and an aim towards a zero landfill (NEA
Singapore, 2003). 800 aligned early to the governments plans and has
capitalised well on the waste recycling portion towards environmental
sustainability resulting in economic advantages.
Illustration 5 Part of Singapores Green Plan, the 3Rs - REDUCE, REUSE & RECYCLE and
Packaging Agreement. Source: NEA.
Legal
The WM industry in Singapore is heavily regulated. From the first SGP in May
1992 to its revision in 2002; laws, regulations, policies and goals were established
by NEA to revamp and set industry standards. By introducing a National
Recycling Programme and creating a framework for stakeholders to adopt the
3Rs initiative alongside awareness campaigns targeted at industry, community
and schools, Singapore has impressively increased its recycling efforts to 60%.
NEA also targets the wastes at source in an effort towards waste minimization
10
11
12
MRFs, and is therefore able to generate maximum income from the sorting of
wastes into recyclable materials (Corporate profile, 2104).
Table 5 Only 4 Waste-to Energy (WTE) Plants for Waste Disposal and
Incineration in Singapore
Waste-to-Energy Plants
Operated by
1
2
3
NEA
NEA
Keppel Seghers
tonne
$77
$77
$81 (only plant not in
Keppel Seghers
Tuas)
$77
(KSTP)
Source: Company, NEA, IE Singapore, Keppel Seghers
13
14
RECOMMENDATIONS
ONE. Half of 800s expenses are a result of labour costs. Therefore 800 should
look into how technological advancement and a continual review of operational
routines can improve systems and processes to increase productivity and
efficiency; therefore easing labour requirements. 800 should also pay heed to
having a fantastic human resource management system in place, and place
emphasis on maintaining a good culture and work environment to retain effective
personnel.
TWO. 800 should seek aggressive expansion into both the cleaning and
horticulture industries, so as to solidify its business diversification and create
sustainable income in the local market.
Also, although 800 re-branded its image to look cleaner it needs a revamp to
focus on a stronger brand identity that the decision-making millennial generation
of customers can relate with. I also recommend capitalising on the fact that 800
is a home-grown firm; and should increase its presence exponentially by
volunteering to participate in national events with wide coverage like NDP.
Further, 800 can capitalise strongly on its one-stop environmental solutions to
merge the various operations cleaning with recycling efforts, into creating
incentives for decision makers to choose 800 over its competitors.
THREE. 800 must continue to cast its sights abroad to create another income
stream as the local market is limited and saturated. Also, if 800 were to lose a
PWC or IPC sector it would be severely affected. As such with profits and income
secured for the next four to five years, 800 must aggressively seek to diversify its
portfolio.
15
FOUR. Should 800 be able to further refine the process of sorting recyclables,
revenue from the sale of recyclable products and expenses from the disposal
charges arising from incineration costs at WTE plants would enable 800 to be
more profitable.
FIVE. With NEAs Innovation for Environmental Sustainability Fund, 800 should
conduct feasibility studies to make further improvements in technology and take
a serious look into the avenue of developing a WTE plant.
CONCLUSION
In view of the above analysis, 800 has emerged as one of the leading waste
management companies in Singapore. This has been achieved from the
nimbleness of the leadership in identifying and aligning with the external
environment and its fluidity in adapting to changes. However, 800 must remain
vigilant in order to maintain its strategic competitiveness. As of now, 800 is set
for solid returns in the next four to five years but it needs to secure another
market to create sustainable growth for the company to mitigate the risks of the
PWC and IPC markets should they fail to be re-contracted or the policies shift to
allow more entrants into the market.