SIGAUS multiplies financing per tonne collected by 6 to sustain the sector

SIGAUS has redesigned its entire financing model for the different used oil management operations: collection -including transport, analysis and storage-, pre-treatment and regeneration. The new model, which will be applicable from April 2020 until the end of the year, represents a significant effort in the financing of these activities. The aim is to contribute to the viability of a sector experiencing a reduction of nearly 60% in activity compared to 2019.

Given this scenario, and for the first time in its history, SIGAUS will not finance management companies based on the volume of used oil managed in 2020, but rather the volume managed by them in 2019. This will provide companies with stable revenues irrespective of the current situation. Funding will be determined by multiplying the number of tonnes of used industrial oil managed in the last 9 months of 2019 by a fixed amount fee.

In the specific case of collection, €22.94 will be paid for each tonne collected in the last 9 months of 2019. This figure has been arrived at in accordance with the results of a study of costs carried out by an independent third party (a leading international consultancy company), which is how SIGAUS has been quantifying the financing of used oil operations since its foundation in 2007. This new model may lead to an increase in financing per tonne collected in 2020 of almost 6 times the amount paid last year. In global terms, SIGAUS will provide financing of €2.2 million for used oil collection in the period from April to December 2020, thereby doubling total 2019 financing for this management operation.

Moreover, for the purpose of injecting liquidity into the sector, SIGAUS will assume the financial endeavour of advancing monthly payments to managing companies from 60 to 30 days, from the date of accrual of the invoices corresponding to the quantities of used industrial oil actually collected.

 Ensuring universal service

 Therefore, SIGAUS will finance a percentage of the operating costs of the sector and facilitate its viability in the exceptional scenario arising from the COVID 19 pandemic. SIGAUS will also advance this financing, thus contributing to improved cash flow in the sector. Through this measure, SIGAUS will guarantee the correct recovery and regeneration of used industrial oils in these adverse socioeconomic circumstances until the situation returns to normal, whilst maintaining and reinforcing its commitment to comply with the obligations it has under environmental legislation as an integrated waste management system.

 

Eduardo de Lecea, General Director of SIGAUS, points out: “We are facing an unprecedented drop in the consumption of industrial oils, of around 60% with respect to 2019 levels. Even with such economic impact on our revenue, we must continue to ensure the management of used oil, regardless of the volume that is generated and the distance to be covered. And that undoubtedly includes contributing to the sustainability of the used oil management business community, without prejudice to these companies being able to obtain other types of aid enabled by the Public Administrations. The lubricant sector assumes, as always, our responsibility for the management of used industrial oil and for the environment. We cannot jeopardise collection in rural Spain, in de-populated areas or those with high environmental vulnerability”.