Central European Waste Management President Reveals Strategy of "Reverse Integration"

Online, December 29, 2010 (Newswire.com) - "The current economic crisis means that in order to survive, one must change, evolve and cut cost," said Dr. David Edery, C.O.O. of CE Waste Management (Central European Waste Management) in an exclusive interview at the recycling syndicate's corporate headquarters in Wels, Austria. "Change is inevitable and new relationships and different dynamics often occur, especially in a time of slowdown or economic crisis."

In 2010, one new trend is called Reverse or Backward Integration. When asked to clarify, Edery explained, "it is a form of vertical integration that involves the purchase of suppliers in order to reduce dependency and exposure to the vagaries of the commodity markets." A good example, says Edery, "is the tyre manufacturer who acquires rubber plantations or the baker who buys a wheat farm."

"[With Reverse Integration], our suppliers are now part of the group. Instead of relying and being at the mercy of suppliers, we can now control much more of the elements of the market."

This year has been marked by several large Reverse Integration acquisitions, notably by mining giant Rio Tinto and the Tata Steel empire in their attempts to buy stakes in smaller coal mining concerns. Further, Vale's bauxite mines were bought by Norsk Hydro ASA, and Chinese companies in particular are keen to engage in Reverse Integration to mitigate supply risks.

The strategy also results in reducing excess overhead by leveraging economies of scale, increase efficiency, and producing cost advantages. "These savings are passed directly to our customers," says Edery claiming that his company's prices will not increase but will be reduced in 2011. "This is the result of a leaner more efficient supply chain."

Indeed, C.E. Waste Management has been quit busy with mergers and acquisitions in 2010. The company is the result of the merger of Paradigm Industrial Metals with Vulcan Holdings AG and earlier this year acquired the assets of eight smaller recycling plants in Austria, Germany, Italy and the Czech Republic. It also appointed a new Chief Executive Officer to lead the company's expansion, Austrian industrialist Dr. Frederick Von Strasser.

With recycling and waste management plants now located throughout Europe and holdings estimated at some 250 million Euros, Edery believes that Central European Waste Management has expanded both its' supply chain and outreach in 2010 and looks to continue this effort in 2011.