Advance Australian Manufacturing With Close The Loop

Andrew Conway (left) and Dave Hitzler (right) from Close the Loop Australia

Based in Somerton in Melbourne’s industrial north – and with operations in Belgium and in the US – there’s much more to Close the Loop than the collection (or what they refer to as ‘take back’) and recycling (or ‘recovery’) of printer ink and used toner cartridges. 

For many organisations like Xerox, Hewlett Packard and Konica Minolta, Close the Loop plays an integral role in driving corporate social responsibility programs. However, at a much more fundamental level, Close the Loop’s commitment to the principles of circular economy — transforming items that would normally end up in landfills and oceans into useful commodities that can be returned to the supply chain — is making a tangible impact in creating a more sustainable manufacturing future here in Australia and overseas. 

Marc Lichtenstein is CFO of Close the Loop Group, alongside US-based CEO Tom Ogonek, and he kindly shared his COVID-19 manufacturing experiences with Integra for our Advance Australian Manufacturing initiative.

AAM: What have the last two years been like for Close the Loop? 

Marc Lichtenstein: “It's been challenging. In some respects, it's been good for us but, in other respects, it's been very challenging. We're an essential service, so we were able to trade throughout the pandemic, which is good, albeit with lower volumes. JobKeeper certainly helped us in the first round and it made a big difference. It allowed me to keep all the employees on the books, although I ran the factory four days a week, instead of five. Often, we run six days when not impacted by COVID.”

“The second lockdown – and in New South Wales, which is our biggest market for cartridge and consumable collections – we've really struggled. We've seen more pain over the last two to three months than last year, because we didn’t have JobKeeper.”

"As a business, there have been positives and negatives from the pandemic. It certainly hasn't been an unmitigated disaster, like some other industries. At the beginning, there was some crisis management. For example, in Europe, where we had no government support, we had just three people working in our plant some days, which would normally have 40-odd people working. We just had to stand everybody down in Europe."

"You talk about crisis management and, certainly, as an executive management team, we’ve spent a lot of hours at the beginning trying to work out what to do, and what worked in week one didn't work in week two, and vice-versa. We really had to be agile and make decisions and stick to them as we went, and we had to manage three different geographies, so that was quite challenging to do that simultaneously. It was about survival of the business – making sure we came out the other end."

From soft plastic to TonerPlas asphalt

What were some of the biggest hurdles that Close the Loop had to negotiate and overcome during the pandemic?

"The biggest hurdle for us was scarce resources, and I mean that from a financial perspective. We just don't have huge amounts of money in reserve, so we had to trade our way through the pandemic – that was the key, while trying to maintain our workforce. We didn't stand anybody down in Australia as a result of the pandemic, in any shape or form. I guess there were a couple of contractors and people working in a peripheral sense that were stood down but no full-time employees or staff that are responsible for processing product through the plant."

What were some of the positive aspects across the last two years for Close the Loop?

"It allowed us to improve efficiencies and realign our processes. Business is about having time. With the lower volumes, the pandemic allowed us time to realign and restructure in terms of the processing and the through-put and the way in which we operate the business. Particularly in our overseas jurisdictions, the reduced volumes allowed us to realign the processing of product through the plants, so that's where it created efficiencies. That's the positive."

What are some of the biggest changes within the organisation? Have there been any other fundamental changes in your day-to-day operations?

"It forced us into making the difficult decisions, having managerial courage in knowing what the answers were. We knew what we had to do but it brought in a sense of urgency and, as I said, difficult decisions – sometimes you don't always like what you're doing. Sometimes, it impacts people directly as you restructure and realign things, so that's the positive that comes out of it. There was no time to sit on the fence and say, ‘Oh, we'll do this next month’. We need to do it today. It's about survival."

How has Close the Loop used the pandemic as an opportunity to emerge stronger?

“Through this pandemic, we've seen a move towards sustainability, which has benefited our business. We are merging with a group called O F Packaging and its associated businesses, combining that with Close the Loop and listing that on the ASX. This merge with O F Packaging is about circular integration, and this drives the company towards the holy grail of packaging-to-packaging, and being able to recycle packaging.”

“Going through the IPO process has been a huge challenge for us. The first discussions were held in January 2021 but, really, from March through to November 2021 has been when it’s all happened. So, on top of managing the pandemic, we also managed through an IPO process, which brings with it, its own challenges but, with sustainability and recycling becoming more of a centralised theme, we’re in the right space.”

Downer using TonerPlas in WA

Find out more about Close the Loop at https://www.closetheloop.com.au/

The Close the Loop story is part of Integra Systems' Advance Australian Manufacturing (#AAM) initiative. Read all about it and see how you can participate.