WM gets out of Medical Waste business

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Company will still collect it, but is looking to sell sites and move capital elsewhere.

By Jim Johnson
WRN Senior Reporter

NEW ORLEANS - waste Managenent Inc. is looking to move away from the processing of medical waste and instead rely on third-party providers of that work for customers who continue to seek that service.

Chief Operating Officer James E. Trevathan, at the recent Wunderlich Securities Inc. Investor Summit in New Orleans, said the medical waste portion of the company's overall business is very small and Waste Managment could better deploy capital in that sector to other portions of the business.

Standing in the hallway at the Investor Summit, held in conjunction with Waste Expo, Trevathan and Senior Vice President John J. Morris Jr. talked briefly about the decision to seek buyers for the processing faciliites
Waste Management once viewed medical waste as a growth opportunity for the Houston-based company, but the landscape has changed.

"I think two things. We don't have to own the facilities to service the customers," Trevathan said. "That's a big one. I think we realized that. And, second, I think we would rather put our capital in another place."

The COO estimated the company has about six to eight processing sites in different parts of the country. "It's a management drain locally. How do we manage it? Do we keep it with the local business or do we run it nationally? It's not large enough operating those handful of facilities to run it nationally," Trevathan said. "It's not a core competency of our local management either."

Trevathan pointed to other potential uses of money now tied up in medical waste that could be used elsewhere, oil and gas field waste services.

"We can put that capital to work in a better place," he said. Caliing medical waste a "very low margin" business for Waste Management, Trevathan indicated the decision is "not a move­the-needle issue. It's not significant in size."
Waste Management had revenue of $13.65 billion last year, and Trevathan said medical waste revenue was certainly "less than $50 million without any doubt and maybe half of that."

Contact Waste & Recycling News senior reporter Jim Johnson at [email protected] or 937-964-1289.