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October 02, 2018 07:00 AM

Remondis taking over Green Dot ahead of new German packing act

Remondis taking over Green Dot ahead of new German packing act

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    Grune Punkt Duales System Deutschland
    DSD claims to currently have a 35% share in the market

    With the new German Packaging Act set to take effect next year, German waste management companies are upping their games to tap into the opportunities ahead.

    Lünen-based Remondis announced 27 Sept that it is, after a four-year break, re-entering the ‘dual system' market with the acquisition of Duales System Deutschland Holding GmbH & Co. KG (DSD) in late September.

    DSD, and its subsidiary Grune Punkt Duales System Deutschland GmbH (Green Dot), operate the Green Dot ‘dual system' of waste collection in Germany, which collects post-consumer packaging waste parallel to the existing local waste-collection services.

    Remondis, which shut down its own packaging compliance scheme EKO-PUNKT in 2014, said it was re-entering the consolidated market due to “good opportunities” to increase packaging recycling rates.

    Post-acquisition, the company name, the "Green Dot" trademark as well as the management team of DSD will be retained.

    The move is in anticipation of the new German Packaging Act, which will require all businesses placing goods on the German market to register with the central packaging registry.

    The new pact aims to improve the existing law on packaging by focusing on recycling and prevention of packaging waste. As part of the new law, an impartial central office will be set up to check that all sales packaging placed on the German market is licensed properly.

    The new, central office, said Remondis, should ensure that the market is “both fair and well organised in the future”.

    “This improvement to the overall framework conditions puts Remondis on a level playing field with the other competitors in this market and will make it possible for it to grow its business abroad,” said Ludger Rethmann, Remondis board chairman in comments about the acquisition.

    Originally founded as a non-profit company, the packaging compliance scheme, Duales System Deutschland, now employs 220 people and generates turnover of €490m.

    The company is one of nine ‘dual systems' operating on the German market for licensed waste packaging, which has an estimated overall volume of around €900m.

    DSD, has however, lost a major chunk of its market share in recent years as a result of new ‘dual system' operators in the market. The company claims to currently have a 35% share in the market.

    “Today, DSD's annual results are well below the figures generally generated by medium-sized private sector firms operating in the industry and indeed below those of medium-sized public sector businesses, such as those owned by the City of Dortmund,” added the Lünen-based company.

    DSD is currently facing competition from the likes of French companies Suez and Veolia as well as Alba and Interseroh.

    In addition to those players, Lidle and Kaufland owner, the Schwarz Group, is stepping up its recycling activities, through the acquisition, earlier this year, of Germany's fifth largest recycling company Tönsmeier.

    The Schwarz Group has also entered the ‘dual system' market as one of the biggest competitors by transforming its subsidiary SDL Sigma GmbH into the new PreZero Dual GmbH. The company announced in late August that it intended to make its waste disposal service fully operational by 2020.

    While growth has been the main theme for recyclers in Germany, not all news has been rosy.

    Another dual system licensor, ELS, based in Bonn, entered insolvency proceedings in June, recommending their customers to license their packaging to another system.

    The company said it closed its business operations because efforts to find an investor had failed.

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