HISTORY

History

An historical overview of the That Drum’s operations in South Africa and Europe:

The South African based drum manufacturing operation commenced in 2002 initially with a dedicated focus on serving the juice processing industry in the fruit growing regions located in the North-East of South Africa. With the opening in 2010 of the new component production plant in Benoni, Johannesburg it allowed for an expansion into the Western and Eastern Cape regions. Together with organic growth and the expansion into new markets the business grew five-fold from 2006 to 2015.

In 2015 PackSolve took over from the founding shareholders in order to grow the business further in conjunction with dedicated drum recovery operations in South Africa and Europe that would focus on drum rotation and reuse, and effectively close the supply chain loop. During this time the international operation (TDI) was launched to establish infrastructure in Europe to support drum rotation and reuse programs.

Business Timeline

The strategic driver for this journey started with the Vision to enable our clients in the juice processing industry to deliver fresh juice concentrate to local and international markets in a safe, healthy and cost-effective way. Initially the focus was on finding ways to reduce the cost of delivering drums to the customer’s site by developing systems to produce components so that 2000 sets could be delivered over long distances instead of 344 complete drums on a standard drum carrier. The result was over a seven times reduction in incoming ground transportation costs.

The establishment of dedicated assembly centers close to the customer’s filling station created a unique relationship where the assembly team was tightly aligned with the production team.
Initially a 230 litre drum was made for the customer group who appreciated the capacity benefits but in 2011 a lighter constructed standard 210 litre drum was made to meet the traditional needs of the industry mainly in the Cape.

That Drum then engaged with the financial managers of its major customers to study the costs within the juice processing supply chain from production through to delivering product to Europe in terms of cost per ton of product, and this study found that 25% of the productions costs were attributable to the actual drum cost (10%) and the balance to drum related costs (15%).

Encouraged by the outcomes of the financial studies and the enthusiasm of the participating customers the larger 247 litre drum was developed with the aim of reducing costs by exploiting capacity benefits and increasing stacking capacity by 50%, and to prove this concept the financial team completed a comparative cost study comparing the 210 litre drum versus the 247 litre drum.

The findings confirmed that the larger drum significantly reduced the cost/ton of product delivered to Europe by almost 40% with major savings achieved in the storage of product prior to shipping and the transport/shipping costs to Europe.

As a result of an extensive communication program explaining the benefits of the larger drum the market steadily converted away from the ‘one-way’ 210 litre drum to the larger ‘rotational’ drum as can be seen in the graph below that shows the changing product mix trends.


DIAGRAM 6.3 – CHANGING PRODUCT MIX

It was clear that although significant cost saving was achievable through using the larger drums, even greater benefits could be realized if the drums could be recovered and returned for reuse.

The larger drum lends itself to ‘dis-assembly’ and reuse because of the thicker body steel used in manufacturing the drum. This led to the development of the dis-assembly technology and the establishment of the pilot recovery station at Hiwa, Netherlands where the highest volume of South African juice exports were directed.

This pilot program was successful with a number of container loads of recovered drums converted back into component form and returned to the participating customers for re-assembly and reuse.

Technically the system had been proven on an R&D basis but the next step is to convert the process to a commercial level.

That Drum International was established to focus on recovering drums for reuse and more recently it was decided to establish TDI Newco in Netherlands to manage the business process and operations in Europe.

Running parallel with these developments was the new focus on reducing Carbon Footprint impacts within the same supply chain. In each case where cost savings were achieved it was found that corresponding Carbon Footprint offsetting benefits were realized.

A study carried out by The Reusable Industrial Packaging Association of USA confirmed that thirty 210 litre painted steel drums generated one ton of CO2e emissions via its upstream and core processes. Their study concluded that the reuse of these drum reduced this impact by 50%.

The signing in Paris of the COP21 Agreement in February 2016 signals a global paradigm shift on climate change with targets to reduce global temperature increases to less than 2%, but this requires a serious commitment and actions from Governments and business to achieve this goal.

The challenge is to actively promote the recovery and reuse of drums and change the way in which packaging is applied in the international fruit juice processing industry.

TDI Newco is destined to accept that challenge and make a real difference in the industry, but it needs to be well structured with committed shareholders who have the collective capacity to deliver on its promises.

The photos in set out below show the production flow at the TDO operation in South Africa from welding and folding the drum bodies, to pressing of the lids and bottoms, to the storage of components ready for delivery and a transport vehicle loaded with 2000 drum sets for delivery to a customer based assembly station.

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