TOMRA is committed to long-term development in China and is increasing its investment and business activities in this dynamic market.
TOMRA first established a subsidiary in China in 2011 and now operates three businesses in the country: Recycling Sorting, Food Sorting and Grading and Beverage Container Collection. TOMRA’s wide-ranging activities here include business development, product management, research and development, assembly, sales, service and application validation in local test centers.
Most recently, TOMRA has expanded its state-of-the art grading facilities for fresh fruit and vegetables in Kunshan and strengthened the engineering team at its technology center in Xiamen.
We asked Cynthia Han, TOMRA’s marketing manager in China, about the company’s ambitions there.
Q1: What is the TOMRA´s strategy in the Chinese Market?
TOMRA’s goal in China is to be recognized as the industry leader and achieve a higher maket share than the current major shares we already have in targeted segments. We also aim to excel in customer satisfaction level in our industry in China, and in the TOMRA group globally.
Q2: How can the TOMRA make a difference in such a competitive market as China?
TOMRA believes people are the most valuable asset. Having highly-motivated talents that share the same vision with the company will pave a solid foundation for long-term growth.
It is high on our agenda to establish all functional teams that can work closely with local customers and business partners, and act upon their individual requests and needs in a fast and flexible way. Today, the multi-functional teams are all in place.
As part of the China team, I believe if we put passion, innovation and responsibility in everyday work, we will build and reinforce the TOMRA brand as recognized leader of high quality, reliability and innovative sensor-based solutions.
Q3: Much has been written about the new Chinese National Sword legislation. How is this affecting the Chinese-industry from your point of view?
We have to look at the short-term effect and long- term effect to understand the impact in a comprehensive way.
In the short-term, many small and medium recycling companies suddenly lost their material supply, because 99% of waste is blocked at the border, and they had to either stop operations or look to establish new plants in alternative markets. If they choose to relocate business operations, countries in Southeast Asia have typically been the first choice, because it’s easier there for Chinese businesses to work with the language and adapt to the culture.
At the same time, those businesses which decided they are strong enough to weather this change have continued operating as usual, but have to face the sky-rocketing price of domestically collected scrap plastic. For example, at the end of 2018 the price for bale PET was, 4500RMB/ton, almost double the price in other markets. This makes it extremely difficult to trade profitably. Only businesses have the advantages of size and strong cash flow will survive.
In the long run, the re-shuffle will push the whole industry to upgrade. Today, domestically-generated waste is not properly collected and recycling rates are still very low, because of inefficient source separation and waste management systems.
As soon as the government and industry players focus on improving recycling rates and reinforcing waste management systems, which is already happening, there will be plenty of business opportunities for the recycling companies which have survived the current challenges. And as these companies work to comply with environmental regulations on emissions and pollutants, there will be an industry-wide upgrade on processing concept and technology.
Eventually this will contribute greatly to the international effort in tackling plastic pollution and shaping the circular economy, because China is currently one of the major sources of plastic waste. If China can improve recycling rates and reduce waste, it will make a big difference globally.
Q4: What are be the biggest challenges for the Chinese recycling sector?
As mentioned, there is currently limited room in China for recycling companies to make profit. In the harsh times, the industry players have to take longer-term view and understand those who take quicker actions to invest in new technology and upgrade will be the ones ready when the re-shuffle is over. Opportunities will favour those who are well prepared.