OSLO, NORWAY: TOMRA announced today that the Board of Directors has made a positive investment decision for the construction of a sorting facility for post-consumer plastic material.

TOMRA seeks to enable closing the quantity and quality gaps in plastic recycling by producing high quality plastic fractions out of plastic waste that is typically lost to incineration and landfill. The output material can be used by recyclers to produce flakes and pellets for applications such as packaging material.

Starting from 2019, TOMRA has worked on developing the concept of high-quality sorting of both separate source and mixed waste plastic at a demo facility in Lahnstein, Germany.

Here, by bringing together innovative but existing technologies and processes, TOMRA showed that high-quality, market-ready recyclate production was possible, regardless of the source of input material.

“Millions of tons of plastic are lost to incineration and landfill every year. In addition, there is an increasing demand for recycled plastics both from chemical and mechanical recyclers. Our goal is to use our expertise in sorting to contribute to closing the circularity gap for plastics and transforming mixed plastic waste into valuable feedstock for recyclers,” says Dr. Volker Rehrmann, EVP of TOMRA Recycling.

TOMRA will initiate an investment of EUR 50-60 million in building a mid-scale plant in Germany. The plant is expected to be operational between 2024 and 2025 and have a yearly capacity of 80 000 tons. The plant will be built in an existing facility which will be rented on a long-term basis. The capital investment consists primarily of machinery and equipment.

TOMRA will source pre-sorted mixed post-consumer plastic material otherwise lost to landfill and incineration and upgrade it via a splitting and grading process at the TOMRA facility. The output will consist of over 10 different polymer fractions, both flexible and rigid plastics, which will be sold to recyclers to be used in mechanical and chemical recycling processes. We target profitability levels comparable with the rest of the business and capital return levels in the low double digits given the size of the facility being mid-scale.

“The urgency has never been greater to make a meaningful impact in the transition towards a circular economy. In June this year we presented our updated strategy and an ambition to employ the know-how and positioning of TOMRA to capture opportunities in this space” says Tove Andersen, President and CEO, TOMRA.

“The investment we are now making in plastic feedstock sorting is aimed at closing the loop on plastics and reducing dependency on primary resources.”

At the end of Q3 2022 the company had NOK 660 million in cash, NOK 1,426 million of net interest-bearing debt and 48% equity ratio. A significant part of the capital investment will take place in 2023, hence the Board considers the company to be well capitalized to initiate the investment.