How much is the global clinical waste market actually worth?

The developed nations pay heavily for disposal of clinical/healthcare/pharma/sharps waste, in markets that have reasonable margins and solid return though some would beg to differ when the bills come in and salaries must be paid.

There is strength in size, and the larger operators are protected in their greater market share from the difficulties imposed by current global financial woes. But healthcare providers in the UK and Europe, and probably across north America also, are something of an easy touch; they may seek to negotiate the keenest pricing but are ill-equipped for keen negotiation and will often close at a price point that does leave some slack.

In less developed countries, the situation is different. Costs are low, and margins very small indeed. However, as an investment market for future exploitation, at least in areas of urbanisation, those who wish to support start-ups with an autoclave or small incinerator in a region where regulation may be slight yet demand for effective and efficient services high and getting higher there is much to gain. These deliver recurring income streams with only modest practical and administrative/regulatory challenges to overcome.

Putting all this together, estimates of the size of this global market for clinical waste services are  a staggering $15 billion. Stericycle Inc (SRCL), described as A Diamond In The Waste, claims an eye-watering 14% of this market.

Long-term contracts, typically varying from one to five years with automatic renewal, contribute 95% of the company’s revenue. However, there is pressure to move away from this model, which has seen criticism of some UK waste service providers. But since this model offers predictable and stable revenue streams, Stericycle is a preferred investment for long-term growth investors.

Good luck to them.