TAX FREE GROWTH OF FUNDS
The UK, historically, is amongst the countries within the European Union (EU) which rely most heavily upon landfill for disposal. 75% of municipal waste is sent to landfill, against an EU average of 45% (2003 statistics). More recent figures from 2007 indicate that the UK continues to be among the EU’s worst offenders with regards to the volume of waste land filled per capita, depositing 324 kg per capita, compared to the EU average of 181 kg. That’s about 25 million tonnes a year going into holes in the ground.

The EU Landfill Directive has set member nations limits for the amount of biodegradable municipal solid waste permitted to be landfilled by certain key dates (2010, 2013 and 2020).

The UK’s targets are translated into landfill limits for individual local authorities. Failure to achieve these targets gives rise to fines of up to £150 per tonne. Local authorities also face statutory targets for the recycling of household waste.

UK landfill capacity could become fully utilised by 2014, assuming a continuation of 2007 input levels.

The use of alternatives to landfill plays an important part in waste producers attempts to improve their environmental performance. A solution is for local and city council authorities to compost the waste. One company is at the forefront of this technology and it’s this company I want to concentrate on. New Earth Solutions was established in 2002, out of waste management origins to pursue landfill diversion and composting operations. The company has successfully developed low-impact, fully-enclosed facilities that utilise mechanical biological treatment (MBT) and composting technology.

New Earth Solutions has a saleable business model and employs a modular build approach for its technology. New site development costs are typically £10m to £12m for a plant with 50,000 tonnes per annum (tpa) of capacity. New Earth Solutions has three operational waste treatment facilities (Canford, Blaise and Sharpness) with a combined capacity of almost 170,000 tpa, and is growing organically by winning Local Authority waste treatment contracts, which underpin the development of new plants. A further three facilities (Cotesbach, Britannia Zinc and Willow) with a combined capacity of 300,000 tpa, supported by Local Authority waste contracts, are expected to open in 2010 and 2011. Planning permission at Longwood (in Lincolnshire) has been achieved in 2009 and this site is expected to open in 2011, subject to securing an underpinning waste contract.

The company has nearly 3,300,000 tonnes of secured and/or awarded local authority contracts valid for the next 20 years. This translates into circa £200m of revenue at current prices.

All this makes interesting reading, but how can we invest in this unique opportunity?

The Premier Fund Group based in the Isle of Man has opened a fund investing exclusively in New Earth Solutions, and other ‘new earth’ energy companies. Over the past 18 months the fund has returned 16.9%, giving it an average annual figure of over 12%. The New Earth Solutions Fund was launched in July 2008 and has never posted a losing month which includes the months when global stock markets were crashing as a result of the credit crunch. It can be accessed direct or through a portfolio bond which I wrote about in an earlier article. There’s an old Yorkshire saying, “Where there’s muck there’s brass,” and this fund has certainly proved that.

To find out if this fund is a suitable investment for you, either directly or as part of your existing portfolio, call me…