Plant Tour: Environmental emphasis proves sustainability = profitability

An Australian molder is proving that highly successful manufacturing and the environment need not be incompatible with a business strategy that emphasizes recycling and resource conservation.

Step into Reln’s suburban Sydney plant and you’re greeted by some mighty machines, headed by a mammoth 4000-ton, two-platen injection press tasked with turning out 2100-liter Slimline water tanks. The machine was designed by Reln itself and manufactured on its behalf by a South Korean OEM at a cost of around $2.6 million. Combined with $1.1 million invested in the 90-ton tool also sourced from South Korea, it represented a major investment on the part of Reln in a product it felt would take the water harvesting market by storm.

Since the first production run of tanks in October 2007 using the previously untrialed tool (no machine big enough was available to test it), the Slimline 2100 has proved a hit in water-short Australia, and not just because, at less than $700, it is 20% cheaper than its competitors; the injection molding process has also realized several design innovations.

“Our mission was multifaceted,” says Reln’s managing director Nigel Nattrass. “We wanted to use injection molding on account of a 20-fold productivity increase compared with rotomolding. Injection also facilitated a slim design [820-mm width by 2250-mm length] for easy installation in confined spaces, as well as the ability to literally wheel the tank in through the front door of a terrace house and out the back to the garden for installation.” In fact, the design envelope dictated the machine that was required. An additional requirement was a tank height that is under the typical fence line. The tank is available in six colors to match the aesthetics of a variety of houses.

Injection molding also made possible the fitting of IMed removable pallet feet and wheels to assist with moving the 100-kg tank during installation. The process also guarantees uniform wall thickness in a 4-minute cycle, vs. 90 minutes for rotomolding.

Nattrass notes that the logistics of moving the tank around are just as important as its functionality. “No pallets are required, it can be lifted by a forklift, and also bolted to a base using injection molded support brackets.”

Design of the tool was particularly challenging given the straight-sided nature of the product, and entailed incorporating specialized patented demolding functionalities for the 93-kg shot size. Baffles are molded from glass-fiber-reinforced polypropylene on a 2000-ton injection press, while the PP lid is also molded on a 2000-ton machine. Completing the production picture is a takeout robot rated at 120-kg load. The product and the equipment to manufacture it now form a business model Reln can license and export around the world.

Recycled resin reigns

Still, there’s more to the tank than its design and functionality. It makes extensive use of recycled PP, which is a cornerstone of Reln’s manufacturing philosophy. “We use 300-350 tons of recycled material monthly, which is more than any processor in Australia, and despite the current low virgin resin prices right now, we are still committed to using recycled material,” says Nattrass. “And this is despite the facts that recyclate is a less predictable material, the reject rate is generally higher, and it’s typically higher density because around 20% of all mixed PP recyclate contains filler.” Raw materials are centrally fed from a mix of six external 60-ton silos, bulk bags, and 40-ft containers.

Many of Reln’s other offerings in the logistics, sewerage, drainage, composting, and agriculture segments also make good use of recycled material. “We’re promoting the use of recycled material wherever possible, even though labor is more intensive to do so,” says Nattrass.

R&D delivers revenue

Reln’s current business is split between custom molding, where it is strong in pallets and shipping crates, and proprietary products such as its tanks, soak wells, and worm farms. “We invest 5% of turnover in R&D, and continually turn out new and improved products,” says Nattrass. One example is Soakwell Rapid Flow, a water drainage system engineered especially for sandy soils. The product, which is delivered folded, assists in the capture and dispersion of rainwater and features a plastic lid that replaces conventional concrete slab covers weighing 30 kg or more.

“Many companies [in Australia] believe they need to lower their costs to the level of Asia in order to compete with Asia, but this is a no-win situation,” says Nattrass. “What’s required is innovation and technology.” As party to this, a good percentage of Reln’s revenue comes from products that are less than three years old. “We constantly have one or two ongoing projects at any time in plumbing and hardware, or the environment.”

Besides its efforts to promote efficient use of water resources, Reln has also made a name for itself in the Worm Café, Can-O-Worms, and Worm Factory products for recycling of kitchen and other waste into organic fertilizer. “We even use our own Can-O-Worms recycler in our lunching area,” says Nattrass. “When possible, vegetable dyes are used in printing processes, especially with our worm farms.”

The environmental emphasis doesn’t end there. “After a rigorous audit, we converted our sales vehicles to a more energy-efficient and environmentally geared fleet, selecting diesel turbo vehicles capable of achieving fuel economies of 5.7 liters/100 km [41 mpg],” says Nattrass. Plans for the future include the use of solar energy in the factory and capturing water from onsite buildings for reuse. Reln also recycles and remolds 100% of reject products into new products.

Hydraulic energy efficiency

Back on the plant floor, Reln endeavors to minimize energy consumption by its hydraulic machines through use of accumulated energy. In other words, the hydraulic pumps operate on a continuous load and pump oil into accumulator systems that compress nitrogen gas as stored energy. When needed, the oil is released and the nitrogen expands, pumping the oil through the machine system. This is more efficient as the continuous load pump is of smaller capacity and uses less power compared with a much larger pump that increases power draw to provide peak power when the machine calls for added oil pressure and flow. Further, when starting up machines, Reln ensures that this is carried out in a staggered manner so as not to draw too much power from the grid at any one time. Incidentally, seven 150-hp motors drive the 4000-ton, custom-built, two-platen press.

Reln’s stable of large machines is also relatively young. A 1050-ton LS Cable press was installed earlier this year, while a 2500-ton machine is going on one year. Another four Dongshin machines were built to Reln’s specifications. The oldest machine you’ll find is a six-year-old Italtech, which is currently having its electronics modernized. Note that molding of smaller parts is outsourced, although Reln retains ownership of the tooling.

“We generally try to depreciate machinery within five years. Anything beyond that and the technology becomes outdated,” says Nattrass. And herein lies the key reason behind Reln’s current aversion to all-electrics. “We can’t legitimize their use because we can’t recover the cost of the machine at the rate that technology is moving,” he says. “A large electric machine would take us seven to 10 years to depreciate.” Although it might save on energy consumption, Reln believes at the end of the day, it will fall behind the technology curve and inhibit the company’s ability to continue developing innovative, environmentally compliant products.

A long-term plan

Toolmaking is outsourced to a South Korean moldmaker. Reln maintains a close relationship with the vendor, with Reln engineers and the toolmaker’s staff visiting alternately every six weeks. A “small” tool for Reln might weigh 22 tons but its supplier can generally deliver within eight weeks from receiving the CAD drawing.

Reln also controls the logistics of its proprietary products intimately. “Our products are large, robust, noncosmetic parts. If we sourced logistics externally, it would be a large proportion of our overall costs, perhaps 10% compared with say 3-4% in Europe,” notes Nattrass. “That’s too big a component to leave to an external party.” Instead, Reln maintains its own network of warehouses throughout Australia and New Zealand as well as its own fleet of trucks. “This is particularly important, given our customers send in orders on a daily basis and we need to guarantee 48-hour delivery.” Logistics costs are high in Australia given the expanse of the country and a relatively sparse population. The continent has 78% of the area of the United States and is populated by less than 22 million.

Reln’s key account and regional managers also interface directly with the market. “These days you can’t be a manufacturer who sells something. You have to be a sales and marketing company that also happens to manufacture,” says Nattrass. “You need to understand market channels and the distribution chain.”

With more than 1000 line items in its product range and a customer base preferring to maintain lean inventories, Reln is also a practitioner of just-in-time manufacturing. Daily meetings are held in front of a large white production board to refine the six-week manufacturing plan, while monthly meetings focus more on the big picture. “All of our people have a clear understanding of what the long-term plan is,” says Nattrass. “Even though we’re dealing in what might be termed commodity products, we have to have tomorrow’s product out today. We have to stop focusing on price and instead innovate.” Innovation is of particular importance given attempts by competitors to emulate Reln products. “We always see a lot of copies come to market, but they never seem to incorporate as much thought as ours do,” says Nattrass.

In this current economic crisis, Reln plans continued investment in production assets, sales and marketing, and a shared focus to ensure products are relevant to customer needs. So while the global recession might be boosting demand for worm farms as more people start to grow their own vegetables, until the worm turns, it’s business as usual at Reln, with continued emphasis on environmentally sustainable innovation. —[email protected]

Vital Stats

Reln Pty. Ltd., Ingleburn, NSW, Australia
Facility size: 5-acre site area
Annual sales: >$25 million in 2008
Markets served: Plumbing, hardware, agricultural and nursery, custom molding
Customers: Climate Technologies, Dairy Farmers, National Foods, Chep (custom molding). Retail customers include Bunnings, Tradelink, Reece, Mitre 10, and other major hardware, plumbing, and local government customers.
Materials processed: PVC, PP, other commodity and engineering resins
Resin consumption: 300-350 tons/month of recycled material, and a large volume of virgin material
No. of employees: 100
Shifts: Three 8-hour shifts, six days/week
Molding machines: 11; Dima, Dongshin, Italtech, LS Cable
Secondary operations: Pad printing, assembly, ultrasonic welding
Other services: Product design and refinement, project management, marketing, and distribution to market
Internal moldmaking: No
Quality: ISO 9001
[email protected]