miami’s peogressive waste

Posted on November 14, 2012 by mcooper

Progressive Waste Solutions Ltd., by its own admission, has faced challenges with its Northeast U.S. business for years now.

But the solid waste management company’s CEO said it has not entertained thoughts of getting out of that market to concentrate efforts elsewhere.

As a matter of fact, the Vaughan, Ontario-based Progressive is directing more capital into that market, as it strives to increase waste disposal internalization rates, a metric that the company says will help it become more profitable.

 

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Joseph D. Quarin

Progressive Waste made two acquisitions during the third quarter, one in Washington, D.C., and one in New York, CEO Joseph D. Quarin said on a recent conference call with stock analysts.

“We feel quite good about the Northeast right now,” he said.

Progressive typically talks about three distinct markets where the company operates, the Northeast, the South and Canada.

And talk about turning around the Northeast business seems to crop up during earnings calls most quarters.

“Absolutely not on our radar is any kind of [sale] transaction [in] the Northeast,” Quarin said. “We’re very happy with all of our operations in the Northeast.”

While praising the company’s assets in that part of the country, he said, “now our opportunity is to make them work a lot better.”

Progressive Waste operates three landfills in the Northeast, including Seneca Meadows in Waterloo, N.Y., and disposal locations in Bethlehem and Chambersburg, Pa.

“While we have high-quality assets in our U.S. Northeast market with integrated collection, transfer and disposal operations, we need to do more to leverage this attractive asset base,” Quarin said on the call. “We need more of our own collection volume to internalize in our landfills and to better balance our collection and disposal assets. A higher level of internalization will reduce our reliance on third-party volumes that are price-sensitive, especially in periods of economic softness.”

The company previously had relied on waste captured in the New York City area to support all three disposal sites. But, in recent years, it has been diversifying collection operations to funnel waste from other areas into those sites.

“For the longest time, we were feeding all three of our Northeast landfills out of New York City and everybody knows the Northeast, and [in] particular New York City, that economy has been challenged,” Quarin said.

Progressive Waste entered the Baltimore-Washington corridor about five years ago, and its recent acquisition in Washington “further improves our asset base in that market,” Quarin said.

Muscling up on its own collection business in that region will help Progressive Waste be less dependent on third-party haulers, who shop around for the best price, to supply waste to its landfills.

“It’s going to improve the overall volume environment and how much we control as opposed to being out in the merchant market to solicit volume,” Quarin said.

Less than half of the waste heading to Progressive landfills in that market comes from company collection operations. The company seeks to increase that figure to around two-thirds or higher in a couple of years, Quarin said.

“We feel that we are starting to turn around here. The Northeast headwinds, year over year, will be past us hopefully this year, and we start moving onwards and upwards with a larger asset base,” he said.

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