Capital tech traders seek paper profits

AN EDINBURGH firm that operates an internet trading platform to allow companies to deal in paper recycling certificates will next month push the button on a commodities exchange under plans to double the size of its business.

The Environment Exchange, which launched its marketplace for dealing in so-called "packaging recovery notes" (PRNs) at the height of the dotcom boom, said the potential for the new venture was "huge". It is eyeing a possible push into China, where much of the recovered paper exported from Britain ends up, or mainland Europe.

The company's trading system was seen as revolutionary when it launched in the late 1990s. Based on the rules of the London Stock Exchange, the UK-wide marketplace has gone on to handle millions of pounds worth of PRN transactions each year.

Last year, the firm generated revenues of almost 1 million from those dealings, and the launch of a similar marketplace for the recovered paper sector could see that figure rapidly double.

Managing director Angus Macpherson, a former merchant banker, said the main difference with the new trading system was the focus on a physical commodity - old newspaper waste and cardboard - rather than notes.

"We will provide a set of rules for companies who wish to trade through the exchange and a settlement service on the back of it, giving security on price and volume availability," he said.

"The potential is huge. The recovered paper sector is a broadly similar market to PRNs in the UK. About seven million tonnes of notes are traded, and we have about one million of those. There are about seven million tonnes of old newspaper and cardboard. We see the potential for the firm to double."

The company, which recently took on its tenth employee, will launch its new trading platform on 15 March at the Frogmore paper mill in Hemel Hempstead - the site of the world's first commercial working paper machine.