Son (Eindhoven, the Netherlands) – Pan-European load carrier provider Rotom Group has long recognized the value of pallet recovery and reuse programs for custom or “bespoke” pallets, as they are commonly called in Europe.
In 2010, Rotom started its 2Return daughter company (www.2return.co.uk) to focus on such opportunities. Now, with lumber prices and availability stressed initially by COVID-19 and most recently by Russia’s invasion of Ukraine, the case for reusable pallet programs has never been stronger.
Last year, after considerable research, Rotom selected Waterland, a Netherlands-based private equity firm, as its financial and strategic partner. The company is plotting an ambitious growth trajectory. Today, the company turns $200 million annually,” stated Arjan Kuiper, CEO of Rotom Group. “It’s our goal to accelerate our growth via a buy and build strategy together with our co-investor Waterland to $500 million in the next 3-5 years.”
According to Kuiper, the company’s mission is to become the sustainable bespoke load carrier marker leader in Europe. And given current lumber availability, the timing could not be better.
Diverse Mix of Products and Services
Based in the Netherlands, Rotom’s operations encompass 26 locations spanning 10 European countries, powered by more than 500 employees. The company’s focus is on load carriers rather than wood pallets specifically. Wood pallets and packaging sales and services lead the way, however, accounting for roughly 65% of the revenue.
The company also offers a range of other products such as roll cages and metal containers as well as plastic pallets, containers and stacking boxes. As part of its strategy, Rotom acquired Hoza, a Netherlands-based roll cage manufacturer, in 2016. Another recent acquisition was Roldo Rent, a specialist in reusable moving equipment that also pools reusable packaging in the pharmaceutical sector.
“We are quite a unique player,” explained Kuiper. “My background is in supply chain. My philosophy from the 90s was already to offer load carrier solutions, and I don’t care if it’s made from wood, metal or plastics. It is important that for each proposal you have the right solution.” The company’s range of services include rental, pooling, recovery, repair, inventory management and product design. There is also an online portal, RotomShop (www.rotomshop.co.uk) that provides e-commerce access to the Rotom range of load carriers.
Wood pallets and packaging remain a core part of the business, however. Rotom produces new custom pallets, and also refurbishes and sells recycled pallets. On the new pallet side of the business, the company leans on Cape automated nailing equipment. (The Enterprise covered Rotom and its preference for Cape automated nailing lines in the March 2018 issue.)
Pallet Repair and Rotom’s Revalue Project
The company places an extremely high value on its repair and recycling operations. “Pallet repair is sustainable because it is about product lifetime extension,” Kuiper emphasized.
On the recycling side, it relies heavily on Netherlands-based Pallet Sorting Systems for automated pallet sorting and repair lines for its standard-sized pallets at several company locations. Pallets received from clients or the market are sorted as usable, repairable, or scrap. Usable pallets are returned immediately to the market.
Previously, the scrap pallets (non-standard or badly damaged) were destined for biomass markets, but given current lumber prices and sustainability interest, the company has launched its Revalue Project, which aims at the highest possible recovery. For pallets that would be deemed non-standard in European markets, such as imported pallets, it first looks to see if it can easily modify the pallet to make it a standard footprint. If that approach is not feasible, it dismantles the pallets, trims as necessary and builds pallets from recovered lumber.
For the Revalue Project, it has chosen to go with band dismantlers, pallet and board trimmers, and nailing machinery from Netherlands-based Cekamon Saws (www.cekamonsaws.com) and Spain-based Maypro (www.maypro.es), which the company has installed across its network.
For nailing, Rotom chose to go with Cekamon’s expert pallet nailing machine, a hydraulic-assisted steel pallet table that provides the flexibility to easily produce a variety of different pallets from inconsistently sized recovered material.
According to Cekamon, the expert nailing machine can build both stringer and block pallets, including perimeter bases. It features pneumatic block holders and pneumatic ejection of finished pallets, with production in the range of 180-250 pallets per day.
Material Supply Concerns
As was the case in North America, the COVID-19 pandemic resulted in households deferring vacations and outside entertainment. This caused a spike in home improvement activity, resulting in higher lumber prices.
And now, the Ukraine situation has resulted in further supply chain challenges. Kuiper stated that Rotom has still been able to source the material it needs for new pallet production, but that the situation is serious. Kuiper commented that orders to Russia and Belarus were not allowed after March 2, and that delivery is only permitted through June 4. Kuiper said that for Ukraine supply, drivers under 60 years of age have been tapped for military service, and only truck drivers older than 60 years are available to move product from that country.
As prices for new pallets rise, pressure on the recycled pallet market also increases and reuse systems are becoming more popular. According to Kuiper, current new EPAL prices are now in the 19-to-25-euro range. The introduction of its Revalue project and the growth of its recovery and reuse programs is timely.
Recovery and Reuse Programs
“We are getting more and more questions about packaging recovery,” Kuiper said. To help potential customers navigate the decision process, the company recently released its latest white paper, which focuses on reuse, particularly for the building products sector.
Reuse programs result in less timber utilization, and typically a significantly lower carbon footprint than single-trip new pallets. In particular, Rotom’s 2Return has announced several recent contract wins from the building products industry, a sector that has long relied on single-use or limited-use pallets and packaging programs.
For example, in March, 2Return announced a partnership with the KNB building ceramics industry association to pool a 1140×420 mm half pallet for bricks. By collecting and reusing these pallets, the collective intent is to reduce cost and environmental impact. Other recent customer conversions include ROCKWOOL and Promonta, two other building products producers.
Rotom believes that its pan-European presence provides a competitive advantage for reuse and recovery programs. “We can help companies be more sustainable by retrieving pallets within Europe and bringing them back to their factories in Europe, or even to the USA,” Kuiper said. Rotom, he added, can work with U.S. shippers or pallet program managers to facilitate load carrier return.
As sustainability pressures and wood availability questions continue to grow, reuse makes more sense than ever for custom or bespoke pallet systems that were previously one-use applications. Rotom has positioned itself to help European companies make the transition to reuse programs. For more information on Rotom, visit https://rotom-europe.com/.
