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A comment on the status-quo and future outlook of China’s recycling industry

Kelly Xie, Head of TOMRA Sorting Recycling China, commented on the status-quo and future outlook of China’s recycling industry, and explained how TOMRA's cutting-edge technology and innovative solutions add value to the industry and its customers.

16 Mai 2016

Kelly Xie

Kelly has been interviewed by International Plastics News (January 2016 issue), a media outlet published by the Ringier Trade Media Group. 

Q: How is TOMRA adding value to the industries you serve?
Kelly: With the global economic slow-down, China’s economic development is also cooling, and all domestic companies are feeling increased pressure in these adverse conditions. Many labour-intensive companies in the recycling industry have now lost their main competitive advantage of lower costs. TOMRA can help these Chinese recycling businesses to reclaim profit and add value by replacing traditional manual sorting with high-tech automated sorting solutions. Our modern sorting technology helps customers achieve the higher purities and higher outputs which manual sorting cannot match, whilst at the same time offering better compliance with existing environmental regulations. Thus modern technology ensures our business partners retain their competitive edge, despite the economic slump.

Q: How do you assess the current status and future of the industries you serve?
Kelly: China has the largest recycling industry in the world, but compared to USA and Western Europe, China’s waste management and recycling facilities are still at an early stage of development in terms of automation. This is reflected in the fact that today's industry is fragmented and dominated by a large number of smaller players utilising a relatively low level of automated processing plus a high level of manual labour, and often not fully compliant with modern environmental standards. Furthermore, the recycling industry is undergoing a major re-shuffle due to over-capacity and market decline, making it even more difficult for small family-run businesses to survive. In addition, the government have introduced stricter emission laws and environmental regulations which will inevitably force the industry to upgrade. This is further eroding already-reduced margins, and driving many small businesses to the verge of bankruptcy. Medium and large-scale companies, on the other hand, have started to equip themselves with modern technology and automated equipment in order to achieve quantitative production- and product upgrades, thereby securing their operational profits. In general, China’s recycling market will now be dominated by the remaining large players who survive the industry reshuffle.

The central government's 12th 5-year Plan has already tightened emission laws, and thus industry upgrades to reduce pollution, enhanced final product purity, and a better working environment for factory workers, are now right at the top of everyone's agenda. With our automated sorting solutions, TOMRA can address all these issues.

TOMRA anticipates the Chinese government will continue to tighten waste management and resource recycling regulations over the next 5-10 years. We have thus enhanced our presence in China to support the nation’s environmental goals: Since 2011, we have gradually increased our investment in China and built up an organisation which can provide full sales and service facilities to our local clients. So far, 80 units have been installed in China – a total which significantly outnumbers the provision of our international competitors. Our Xiamen test centre enables clients to bring their own material for testing. Here they can witness the high-level efficiency of our sorters and explore custom solutions tailored to their specific requirements. At the beginning of 2015, we established an R&D department in China tasked with the specific aim of developing sorting units customised for the local market.

Q: What role do you anticipate automation will play as industries upgrade?
Kelly: China’s current recycling industry is typically labour-intensive, with most factories heavily reliant upon manual sorting which is less efficient and contributes lower added value. Beyond this, rising labour costs and the younger generation’s higher job expectations only increase the difficulty of recruiting skilled workers.

With the gradual modernisation of the entire industry, automated sorting is now embraced by more and more recycling companies, because of its greater consistency, higher efficiency, and the enhanced quality of end-products. In the past, material which could not be identified by manual sorting went to the waste , whereas today's automated sorting solutions can detect a broader variety of inputs with greater accuracy. Thus companies employing automated solutions enjoy higher economic returns while releasing less emissions. These tangible benefits ensure companies with high-tech equipment stand out in a marketplace with stricter environmental regulations and fiercer competition.

Q: What does technological innovation mean for TOMRA and its clients?
Kelly: As this industry becomes increasingly competitive and environmental regulations are gradually tightened worldwide, only those who continue to innovate and adapt to the changing conditions will be able to thrive.

Recognised as the global leader in cutting-edge sorting solutions, technological innovation is a core component of TOMRA‘s business. Each year, we invest around 8% of our revenue in R&D, and in addition, 20% of our workforce are employed in R&D departments. By conducting detailed analysis on materials from different countries, the R&D team are able to propose tailored solutions for almost any material composition. Furthermore, we also collaborate with several renowned research and development institutes in order to maintain our competitive edge in terms of innovation and market adaptability. At the end of 2015, we launched AUTOSORT FLAKE – an upgraded PET flask sorter – which can better serve the market need for higher quality PET flakes used in food packaging and re-processed as drink bottles. Such strategies and initiatives ensure TOMRA continuously drives up performance standards, and stays at the forefront of the sorting industry.

TOMRA's reputation for sustained pursuit of technological innovation and product reliability means the company is frequently consulted when authorities are developing new regulations and waste management policies. This enables TOMRA to fulfil its vision of leading the resource revolution at a higher level and right across the industrial landscape.