TOMRA has entered into an agreement with UK's number one retailer Tesco Plc for delivery and service of 100 Tomra Recycling Centres (TRCs) at Tesco superstores and Tesco Extra stores in the UK. Tesco is making the investment as a part of its on-going commitment to encouraging and improving customer recycling, and for TOMRA this means the first major sale of Collection Technology to a market without deposit on beverage containers. The 100 TRCs will be installed from late 2006 and throughout 2007.The world's first fully automated recycling centerTRC is a state-of-the-art recycling center based on cutting-edge material recognition and compaction technology. Objects made of plastics, metals, glass or other types of household packaging material are recognized with almost 100% accuracy as they are inserted into user stations in the center. After the objects have been identified, they are sorted and compacted into separate high capacity storage bins.Significant quantities of discarded materials can be stored in the center due to unique volume reduction. Plastics and aluminum objects are granulated, typically reducing the volume with 15:1, whereas glass bottles are crushed, reducing volume by 3:1. As an example, the Tesco configuration of the center can typically hold 20,000 PET/HDPE bottles, 35,000 aluminum cans, 10,000 glass bottles, 2,000 tins and steel cans and 2 tons of paper and card.TOMRA recycling centers provide a convenient and cost-effective way for communities to recycle bottles and cans made of plastic, glass and metals. Click Go for larger image. photo: Tomra Systems ASAThrough a combination of voice and visual guidance, this revolutionary center also communicates with consumers. It offers information about recycling and can also offer incentives such as lotteries, coupons, charity donations etc. Furthermore, the centre automatically alerts the recyclers when it needs to be emptied or calls for cleaning and other service when necessary.Concept embraced by UK consumersTOMRA and Tesco have together piloted the TRC in the UK since 2004 with support from WRAP (the Waste & Resources Action Programme). The results from the pilot centers and supporting research clearly show that UK consumers appreciate the possibility to return all types of rigid packaging to a convenient, clean, safe and automated facility. On average, approximately 100,000 objects are being returned to each of the current 6 centers per month.David North, Community Director for Tesco said: "Our customers want to do their bit for the environment by recycling more. These machines make it as easy and convenient as possible for them. Recycling will now be fun, quick and easy to use."A viable business model for TOMRA and its customersThe decision by Tesco to order 100 TRCs is important to TOMRA. Firstly it proves the viability of the TRC business model itself. Secondly it demonstrates the fact that TOMRA will become less dependent on introduction of deposit legislation going forward.The viability of the TRC business model is based on two key elements: 1) Advanced material recognition and sorting technology in order to obtain clean material fractions and hence maximize the value of the collected materials; 2) Cutting-edge volume reduction to minimize transportation and handling costs. The value of the collected materials, in particular aluminum and plastics, pays for a significant share of the TRC costs. Other sources of revenues such as subsidies from local municipalities and/or advertising can cover the remaining costs and even generate profits for TRC operators. In certain markets, packaging taxes/recovery fees will also be reduced when retailers take responsibility for collecting and recycling the packaging they put on the market.TOMRA's growth has historically has been linked to the introduction of deposit legislation on beverage containers. With the TRC a new set of opportunities opens up for the company in terms of commercializing its technology. Instead of passively waiting for politicians to introduce deposit legislation, TOMRA can now proactively focus its attention on developing markets that need to improve their recycling efforts. TOMRA's success with the TRC model will depend on the company's ability to understand and respond to the needs of the local markets and tailor the TRC business model accordingly.Says Terje Hanserud, Senior VP, TOMRA: "The Tesco order shows that it is now possible for TOMRA to establish a viable and sustainable business model in a major market without deposit. TOMRA is looking forward to working with Tesco and potential other future customers to further develop the business model and the technology."ooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooSo: Where did it all go wrong!!
Jim Lawes ● 6634d