An investor may save Victoria’s recycling sector from the brink of collapse, with a possible bail-out for the company collecting about half of the state’s kerbside recycling.
SKM Recycling founder Giuseppe Italiano has flagged he is going to shut this week, leaving the waste industry and local councils in limbo.
The company has had a series of fires at its Melbourne facilities, leading to a crackdown from authorities and the business’s likely closure.
The City of Melbourne does not have a contract with SKM, but deputy lord mayor Arron Wood said there may be a cashed-up investor who could save the day.
“There’s potentially an investor who will invest in SKM,” he told ABC radio on Monday.
“We are not sure what this week will hold, but obviously, the best outcome is that SKM can secure an investor who is going to put some decent money into them and modernise their business model.”
Municipal Association of Victoria president Coral Ross says the state government should immediately provide support to boost capacity at remaining recycling facilities.
“That could be something like more shifts to be able to deal with the material,” Cr Ross told ABC radio on Monday.
More than 30 local councils currently have contracts with SKM and if the situation can’t be fixed, ratepayers are expected to foot the bill to send their recycling to landfill.
“We as ratepayers would pay for it to go to landfill … we would ask that, obviously, going to landfill is a last resort,” Cr Ross said.
“If this material does have to go to landfill, we would certainly seek that the government does not impose the landfill levy (on councils).”
She also said Victoria could consider a container deposit scheme, similar to those in place in other states.
Victorian Labor minister Jacinta Allan said the state government had already invested $135 million to help councils deal with waste.
“The government has already been working on bringing alternative industry players into this sector and also working with local governments about what alternatives are available to them,” she told reporters on Sunday.
Opposition spokesman David Davis labelled the recycling crisis a “predictable fiasco”.
In recent times, SKM has been plagued by growing waste stockpiles that exceed licence limits and fires creating toxic smoke.
The recycling woes have been fuelled after China restricted recycling imports last year, forcing some Victorian councils to send recycling waste to landfill.