Redefining innovation through recycling
What two brothers started in a small shed in Norway has grown to become Tomra, a world leader in material recovery
The largest reverse vending machine producer in the world is Norwegian-based Tomra—the company has over 70,000 of the machines installed. Last year Tomra made all-time high revenue of NOK 4.7 billion. After several acquisitions, the company has also become world-market leaders with a 60 percent market share in material recovery from collection solutions and a 40 to 65 percent share in sorting solutions.
Tomra was founded as an innovation for the return of empty beverage containers more than forty years ago. When a local grocer wanted a machine that could quickly and easily take back empty bottles, brothers Petter and Tore Planke created a solution to the problem in a small shed in Asker.
The company was officially founded in 1972; by the end of the year, they had installed 29 machines. By the next year, the company had entered into several distribution agreements in Europe and the United States. Throughout the next four years, revenue increased tenfold. And after that, growth really began to take off.
After Tomra’s stock listing in 1985, optimism ruled and the company positioned itself for growth in the U.S. But macroeconomic conditions wanted otherwise. The Soviet Union dumped millions of tons of aluminum on the world market, leading to a dramatic drop in the price. As the prices plummeted by over 60 percent in four months, there were little incentives left to recycle aluminum cans in non-deposit markets. The substantial financial losses suffered by the company forced Tomra to abandon most of its U.S. activities. The company then concentrated on its strong European position to maintain its leading edge in product development.
In the 1990s, Tomra acquired a material-handling company. With this acquisition, they went into the full container recycling value chain, including collection, pick-up, processing, material trading, recycling, and production of new containers. For some years they had annual growth of close to 50 percent. The most significant factor behind this growth was their growing presence in the U.S. By 1999 sales in the U.S. accounted for more than half of total revenue. A new milestone was reached with the launch of a new model of their return machine, which was a leap forward in technology, incorporating a number of innovations such as a new container recognition system, horizontal container in-feed, a built-in modem, and an advanced graphics display.
By the turn of the century, Tomra had developed into a truly international corporation, with over 1,700 employees working in 34 different countries. In 2000 the company saw that it would need to develop a more comprehensive business platform in order to meet its growth targets. The most notable developments came through a number of strategic acquisitions.
A spirit of entrepreneurship, a passion for innovation, and a focus on finding solutions guide the company to this day. Tomra has continuously redefined what it means to be innovative. The Innovation Magazine just named Tomra as one of the 25 most innovative companies in Norway!
Rasmus Falck is a strong innovation and entrepreneurship advocate. The author of “What do the best do better” and “The board of directors as a resource in SME,” he received his masters degree from the University of Wisconsin-Madison. He currently lives in Oslo, Norway.
This article originally appeared in the Dec. 2, 2016, issue of The Norwegian American. To subscribe, visit SUBSCRIBE or call us at (206) 784-4617.