Thank you all, and good afternoon, and welcome to have you on the first Cabka Capital Markets Day. Now, it's a bit uncomfortable having this microphone because it's not necessary, normally in these smaller rooms, you can do it face-to-face, but we're also recording this so you can look it back afterwards, so people who can't be here today can also look at online. Really happy to have you here. This is, I think this we're now open for more, a little bit more than one year in this building, so it's quite a new facility, and we are really, really proud of this facility.
The Innovation Center, by the way, exists already for five years, but this is the first year in this building, and you hopefully will be impressed with the quality and the quantity of the company that we bring here in Valencia. My aim for today is to share with you a bit on the journey that Cabka is on. The most important part to start off with you is, it's the journey as a listed company, which is quite a new company. So doing a Capital Markets Day for the first time is a first time, and it means that we have to find a good balance between being very proud of what we do, being very transparent to you as investors, but also respect the confidentiality of our customers.
So, we will be talking about customers like Target or BMW or Tesla or CHEP, or Volkswagen, BMW, Red Bull. It's quite a long list of companies that we work with, but we cannot, of course, disclose all the details to you. There's a lot under the radar screen that we'll disclose throughout the period to come, but we have to find that right balance as a starting company doing this Capital Markets Day. So I hope you forgive us once in a while if things don't work perfectly yet, but we're working hard on it. When we talk about plastics, it's easy to start talking about doom and gloom because plastics in the industry has been known for a big waste stream. Is it a waste? Yes, it is a problem.
It's a waste stream, but a lot is happening already in the market about the concept about reuse, reduce, and recycle. Now, we've added the components of redesign and renew, but let me take you through those elements. What do they mean when we talk about plastic waste, and how do we deal with it? So there's a lot of emphasis already, a lot of activity already in the market about reducing the amount of plastic that we use. So packaging is now, again, the amount of plastic is, I mean, you had bottles, plastic bottles, with you already. If you measure the weight of such a bottle versus, like, 10 years ago, it's probably more than half. So the reduction is already ongoing for quite some time and driven by the brand, many of the brand owners. When we talk about recycling, sure, we recycle.
I mean, hopefully, we all recycle right for quite some years, but what happens to a lot of recycling, it ends up in a waste, landfill, or we burn it. We reuse a lot of plastic, not enough, but we should be using more. But especially when we talk about renew, there's new materials, bio materials coming to the marketplace, and it's about redesign, so how do I put it in a more effective way? The good part about Cabka is that we don't only focus on one component of this chain, we focus on all five. And hopefully today, we'll be able to convince you what we do in all those five steps to help reduce the plastic waste and to really turn the hard, to the useless stuff into the useful.
And to show you that we're already on our way to doing this in a, in a very good way, 86% of the feedstock that we use is already recycled material. We are by far the biggest recycler of plastics when you look at our output in terms of plastics. So is it possible? Yes, and 86% is by no stretch of the imagination, is an ambitious goal. I think we can go further. However, it does require you see still 10%-15% of virgin plastics that we use. Why is that? We are forced by law, for instance, if you deal with food contacts or our customers require us to use virgin material. But already 85%-90% is already used from recycled materials, and the majority of that stuff we recycle ourselves.
So this company has a long tradition of being able to go back into the chain, recycle our own materials, and makes us quite independent of, of the supply of feedstock, for our products that we generate. There we go. So today is all about showing you the, the value chain that Cabka has developed, and basically, when we start from the feedstock, later on, Tim will explain much more about the feedstock process, where we get our feedstock from. We talk about the, post-consumer waste, post-industrial waste, so our own waste as well that we use, and we'll also get the material back from our clients and our customers that we can recycle. Then we have a quite a sophisticated recycling process in all our operations, across the globe.
We have an innovation, innovative process whereby we will focus on today, whereby we recycle, material through material engineering, through product design, and through process developments to get you the best pallet you can get. And then we've got manufacturing assets, different type of manufacturing assets, ranging from extrusion to blow molding to, to really good extrusion processes that deliver high quality and top-class pallets to our customers. And of course, we close the loop, which is an important part. We offer our clients as well that they can return the pallet to us, and then we shred it again, and we make new pallets out of it. So it's a truly, it's a, it's a closed loop that we run. And what makes Cabka now unique?
Because the steps that you saw, many companies can, and someone asked me the question, "Is what we do, is it unique?" No, but many companies could copy probably what we do, but they can't copy this part, and especially this Innovation Center here is quite unique in its setup and quite unique in the industry. Because it combines a couple of components: It combines our material experience, it combines with processing technology and product design, and together with our customers, we make products that actually fit perfectly on what the customer needs. And I think that combination is crucial in order to be a unique company in the plastics recycling industry. It's not clicking. There we go. Thank you.
So what today is all about, is about the couple of stages that we have in product design, in process development, and material engineering, and it's not the one step only, it's the combination of these three steps together, whereby you get the perfect product development. So we will talk later on about, and especially when we do the lab tour, about product development, product management, and program management. We'll then show you how we do the product development. Then it's about the material that we use, because it's not a very elegant material that we use, so it requires quite some skill to make it consistent every single day for every single product that we produce. We've got a testing center, where we can actually test the products that we make, that it actually performs to the standards that we require.
And then we go to the great capital investment, whereby we design the tools, and we automate the process, so we can roll it out in our plants, either in the U.S. or in Belgium, or in here in Spain, or in Germany. Also, let me quickly repeat and give you a bit of an insight on the results, which you hopefully have been seeing before. Q1, we started the year with a 11% growth, half driven by price, half by volume, so a good, solid first quarter. In line with our guidance that we provided, and we saw healthy recovery in the U.S. As you may recall, the U.S., we had a flooding, quite a disastrous process outside our control, where the whole factory is completely flooded. I'll come to that in a second.
We successfully executed our strategy in terms of closing down the PVC business and selling it off, and the Genthin site , closing it and selling it off. I'm really happy to announce that I've been appointed now as the CFO of the company, as of the General Shareholder Meeting last week. Of course, we're really happy to have you here at the Innovation Center in Valencia. Now, let me dive a little bit into what happened in the U.S., because I think it's high on our list of things to watch, and it's something which is probably dear to the shareholders as well. Basically, what happened in the U.S. is the flooding caused all the machines to be literally this deep underwater.
Within a matter of a couple of hours, the whole site was flooded. It was a flash flood on the airfield nearby, but it caused us to shut down in quite a dramatic way. The really important thing to point out is that we didn't lose a single customer, or we didn't lose a single day of production, because we were able to move the machinery to our to a number of toll operators. That continued production for us, so we're able to consistently deliver to our customers. The good thing is now that plant is gonna be opened by the end of this month, so we're quite happy that we're getting to that reopening.
Production lines are already running again, and we should be on full maximum capacity again by the end of this quarter. Of course, there are costs associated to this. Unfortunately, we have an insurance in place, but insurance never covers all the costs, unfortunately. But in our case, it did cover all the out-of-pocket expenses, and the largest costs have already been reflected in our annual accounts for 2022. So we will have some further costs coming in this half of the year, but they will not impact the P&L, because we can offset them with the insurance proceeds. That brings me to the next slide in terms of what are we doing as well, which you hopefully have seen in our annual report. ESG is the heart of the company.
Now, many companies talk about ESG as being a way forward. I hope that we've been able to convince you already that, Cabka is truly in the heart of sustainability and truly in the heart of the policies around ESG. And we've got a very, clear roadmap how we want to go forward on, on ESG. It's all about circular. We're already at more than 80% of our raw materials being fully recycled and, in our own chains. And, clear in purchasing, we're working hard. We've got all our suppliers already audited, to meet our criteria in terms of ESG sourcing.
To the outlook, we of course, we are working in quite a volatile and active industry, but based on the strong fundamentals that we have so far, we want to reiterate our midterm guidance that we've provided to the market. And it's about single-digit growth, top-line growth, moving towards a recovery of the EBITDA in the range of 13%-15%. So there should be also a consistent path. In terms of the agenda, this is something I also would like to point out to you, apart from the Capital Markets Day. Today, on the 22nd of August, we'll announce our half-year results, and on the 19th October, we'll give a trading update about Q3, and on the 20th of March, 2024, we will announce our full-year results of 2023.
An important part for shareholders to understand is the dividend calendar that we have. So the share will go ex-dividend on the 17th of August. As you may recall, it's a EUR 0.15 dividend payment, which we do in the form of a capital distribution. So therefore, our process is a little bit longer than what you'd normally have. It takes us a week to execute on this process, a little bit more complicated than we're used to have. So let me then give you a bit of an introduction to the program and then hand over to my colleague, Tim. What we'll do is take you through all the steps in our process here in the Innovation Center in Valencia.
Tim will explain a little bit further, in quite some detail, on the transformation, how we deal with our feedstock, and which are the various sources. Then we'll move into the second part, which is where Naiara and Guillermo will present on: What does it mean now for the market, and what kind of trends do we see in the marketplace, and what does it mean in terms of the development that we have within Cabka? What do we think are the crucial trends to go into? Then the third step, of course, will be going into the Innovation Center to go downstairs to show, take you on a tour. So we'll go in small groups.
We've organized you in small groups, so you can ask all the questions that you'd like about the innovations, what we do downstairs. And then finally, we have once you come back, we'll have one of our key clients, CHEP, will come here, and we'll talk in a panel about what does a customer, why do they partner with us, and what do they see as the great advantage of Cabka as a truly integrated partner with their supply chains. So again, thank you for being here. Tim, I'd like to hand it over to you, and...
All right. For me, a necessary evil, quite honestly, to take you through slides, because what I really wanna do is introduce you to the people that are sitting out there, and to show you the materials that we're using, the products that we're producing, the design that we do. Anyway, I'll try not to bore you too long with this stuff. We can get the tour going on. Transforming the used into the useful. That's at the essence of what we do. Transformation, as you know, is part of our slogan: Transformation Matters. Frank already pointed out to it. There's a lot going around when it comes to plastics. Many opinions, legislation, corporate agendas, consumer preferences, you name it. And these dynamics are all working in certain directions.
If we look at corporates these days, and actually to my positive surprise, in the U.S. as much, or maybe sometimes even more than in Europe, you see that corporations are pushing for increased sustainability. Lowering, actively lowering their footprint, making sustainability or circularity an active part of their procurement agenda. So corporations are definitely pushing towards more circular solutions. If you look at consumers, you cannot pick up a package at a supermarket that doesn't have a slogan on it, revolving around how it's recyclable or that it's made out of recycled material, et cetera. And then you got legislation. Meanwhile, here in Spain, I think one of the first countries next to the U.K., where a virgin, so-called virgin tax was implemented.
So if a product does not contain a certain percentage of recycled content, there is an extra penalty that needs to be paid. In other words, something that pushes for the enhancement of using recycled content. There is directives being issued both in Europe and the U.S. Fair enough, that when it comes to legislation, Europe is far ahead from the U.S., but we do see that certain states in the U.S. are starting to pick up some of these initiatives. California, of course, being a front runner, but we're seeing states of Oregon, Washington, New Jersey, et cetera, that are following. So what does that actually mean? And are the implications of those dynamics, are they a threat or an opportunity to us as a company?
Because if we, if we look at what happens is, there's an increased demand for products made out of recycled content, which, of course, then dries up also the demand for recycled resin, recycled plastic by itself. We had a situation last year, many fair enough, many supply chains were disrupted, but so was the market for recycled plastics. Prices were going through the roof. We've seen price increases of close to 100%, companies that weren't able to produce anymore because there simply was no recycled plastic available. There was a shortage of waste, if you, if you like, in a way. Markets have turned, as we know, so the situation today is different. But that enormous push, whether it's coming from the consumer, or the corporations, or the governments, is going to lead to pressure on the recycling system at large.
So we see that, that the intrinsic demand for recycled products is driving the demand for recycled plastics, which is also driving up the prices of recycled resin. So how do we deal with that? And again, is that a threat or an opportunity for us as a company? Well, first of all, the fact that there is more demand for recycled products, you've seen it downstairs, is of course helping us by definition. It's gaining the interest of many of our clients. CHEP, you'll see this afternoon, is one of the companies that moved to us because of our expertise in recycled resin.
The increased demand for recycled plastic and the price consequences that has, of course, could be a threat, but that's exactly what we're trying to turn into an opportunity by managing the value chain. So if we go to the picture that Frank already, yeah, showed, we're fully backward integrated from the product that we bring to market all the way to the feedstock, the waste. Yeah, I've spoken about this many times. We take in post-consumer waste, we take in post-industrial waste, and we have our own material buyback program. So any product that we put out there, and we make agreements with customers to take the product back at end of life. And meanwhile, that's a substantial stream that basically goes round and around and around. And I want to take you through these different steps.
When doing so, instead of starting at the beginning, I wanna start in the middle, 'cause that's why we're here today, in the Innovation Center, right? The Innovation Center, not by chance, is here in Valencia. The Innovation Center is here in Valencia because we want it, for the Innovation Center to be an integral part of the company, in a market where we have access to talent, yeah, but also where industries that we speak to, where our products are around. Valencia is well known for the automotive industry. There's a lot of talent here in the area. There's multiple plastic universities here in the area. And to be fair, for example, compared to Southern Germany, there is also an abundance of talent available in the market.
So that's why we are here today, not just because of the beach. Although that part did play a role, because what you do not want with an Innovation Center is that it becomes isolated. That we have 40 people here working on all great things and are completely disconnected from the sites. So we're in a location where people wanna travel to, so we have people coming in from Germany, from Belgium, and of course, people from here are traveling to the other side. So the integration by location is a success. Now, under one roof, we have the material engineering, so you'll see that later. We do material formulation, we do material innovation, that's connected to the recycling itself. We do process development, because working with recycled plastics is a whole lot harder than working with virgin resin.
You're dealing with all kinds of different levels of contamination, which you have to, in the end, deal with in your manufacturing environment. So combining material with process technology is essential. One cannot function without the other, and that is also true for product design. So later on, especially, Guillermo will introduce you more to product design. The product design, of course, starts with that being specified to what the end customer wants. But our designs are also tailored to the material that we are able to use when it comes to the performance that's required and the price point that the customer likes to hit. So having these three qualities, let's say, under one roof and making them work as a symphony is essential. You cannot leave one of these three parts out.
If we then go to the first part, the feedstock, as already mentioned, there's post-consumer waste, there's post-industrial waste, and there's a buyback program. So there is a variety of different types of plastic, all polyolefins, so it can be LDPE, PE, HDPE, PP, and many times, because it's recycled, it's a combination thereof. And then there can be paper waste in there, there can be aluminum in there, there can be wood in there. We find all kinds of stuff. But having access to the original waste is what's making our value chain more resilient. Of course, we're also buying in the market. There's a quite mature market for recycled resin in Europe.
And you see last year, that just moves up and down like any, like any material market with the, with the strength or the weakness of the economy. In order to at least have a, a buffer against that volatility, this backward integration is essential because it gives us a direct hand on the waste, and at the waste, the price of the waste is, is a lot more stable than the final resin being offered in the market. Plus, through that way, we secure the availability through long-term, agreements. Yeah.
How do you make sure to it, that it gets to the original waste?
It's long-term agreements with could be systems. So in Germany or in the Netherlands, you have system companies, and we make multi-year agreements with them, and we just secure the tonnage, and that's it. It can also be with industrial companies. So for example, the diapers that we take in, they're coming in from Procter & Gamble or from Kimberly-Clark or any diaper manufacturer in the world. Also, those are longer offtake agreements.
What percentage of that supply is long-term contracted, that you don't have the price risk there? And what, how much is spot risk?
Let me say, I would say about 50% of the total recycled resin that we use is being bought in the market, and the rest is being recycled in-house. Yeah. Of course, if you start with the waste, you also have to know how to recycle. These are literally bales of packed waste that has gone through initial sorting factory. So your bag at home runs through the sorting factory. Let's say the higher quality plastics are taken out, your shampoo bottle, your washing detergent. What you're typically gonna be left with is your packaging for cheese or for your cold cuts or whatever have you. It's a mix.
So, there's further steps that we have to do to then take that waste and upgrade it, if you like. So we do deeper sorting, and then ultimately turn it into a new intermediary raw material. And there's different, let's say, levels of complexity that come with that. There is the easy-to-recycle materials. There is virgin supermarket crates. You grind them up, you use it again. Typically, no contamination, perfect. And then you have the different types of recycled waste that, where the complexity, basically one-to-one ties with the level of contamination. If I speak of contamination, it's nothing scary. There's no chemicals involved or whatever, but it's organic waste, it's paper, it's carton, whatever have you.
How does it translate in terms of pricing?
B asically, the more contaminated the material-
But is there a sort of, is it a 5% price difference, or is it you get it for free?
Well, there's no rule of thumb. Let me start there. Yeah. But there is waste streams where you actually get, you get paid to take it in, you know, because the alternative to is to incinerate it. Incineration, depending on where the market is, can cost anywhere from EUR 80 to EUR 130 per ton. Plus there's recycling quotas in all of Europe, for example. So if countries are pushing to get the recycling quotas up, they're gonna have to offer a fee that is above at least incineration. So then you can get a yeah so-called recycling or gate fee. And there's the materials that are of higher quality, that take lesser recycling efforts and where the quality of the end material is higher. So you have a larger scope of applications.
Then that material can be for free to paying, i f I were to take a bale, for example, from the Milieupark in the Netherlands, which will have garden furniture, and it will have some toys, and whatever have you. Last year, a bale of such HDPE and PP was costing EUR 500- EUR 600 per ton. Now, today, maybe EUR 250 per ton. So that market also fluctuates. But then through some of these longer-term agreements, and especially the materials that require a very specific recycling solution, we have the ability to keep a more steady state in that market. Of course, where we are exposed to the material market itself, we go with the flow.
How is the competition at that level of the supply chain? You against who? Competitors that do the same thing like you, but maybe also other companies, or is it just three, four players competing for the scrap?
There's not so many competitors that are working with some of the waste streams that we are working with. There's always some level of competition, but if so, it's limited. If anything, competitors have a level of backward integration into hard plastics, so coming from your garden furniture and whatever have you. But that is relatively easy to recycle. You throw it through a grinder, typically through a water bath, and you dry it, and that's it. Yeah. Good. Now, once you've recycled the plastic waste into a new intermediary raw material, you gotta use it in production. And here is where a lot of the magic also comes in. Yeah. Because you're not working with a clean and stable quality material. As explained, it's contaminated, but also the composition of the material itself will fluctuate.
So you have to. And this market is still a little. There's quite a few cowboys. So the first big bag in the truck that you get is not the same as the one on the back. So you gotta be testing all of the material that comes in, and you gotta homogenize it, you gotta formulate it. So that's also why sometimes our material feeding in our factories looks a little complicated, because we do a lot of the mixing on the machines itself. But that, at the same time, gives us the ability to respond very quickly to fluctuating qualities of the material that's being used. Whereas if you were to use a virgin grade, you have a big silo, you fill it up, you don't worry about it. We have different types of injection molding.
I will not go into the details there, but to work with this type of material, you need injection molding technologies that allow you to work with these levels of contamination, as well as tooling. So the tooling for us is really critical. Not just to make a beautiful product, but to be able to use the material as we do. Typically, your average tool will have an injection point that can be as small as 1 mm . You can imagine, if I have an injection point of one millimeter, it will clog immediately with the slightest contamination. We have injection points, sometimes they go up to this size, in order, again, to work with the material that we have. Now, that also it requires us, sometimes to the frustration of Guillermo, to adjust the design. Yeah.
So then my design typically cannot be based on very thin [rips] and fine structures. So again, that's where things come together. Then automation, more and more you see. You saw some of the products already downstairs. Products are getting more advanced. Products require assembly, so that's where typically we immediately offer also automation together with launching a new product, so that we can be more efficient internally when putting everything together. Now, what does that ultimately result in? And I think this is a picture that we, that you've seen before. But tying it back to how Frank started, everything, all the critical elements of circularity are there: reduction, reusability, and recyclability. The products are for more than 80% based on the use of recycled plastic.
They're designed to be lighter than any alternative, may that be a wooden pallet, may that be a metal cage, whatever have you, so that saves CO2 during transport. And then they're either nestable or they're foldable, again, to save or be more efficient during transportation. Then they're all designed for superior durability. So we want for you to be able to use the pallet or the box as many times as possible.
Because in the end, that is what dilutes the cost of ownership, as well as the CO2 footprint. And then at the end of life, we take the product back, we throw it in a grinder, we use the material again, and the circle starts again. You see here that on the base of a pallet trip, you see that cuts back the cost of the pallet by roughly 50%, where also over 30% of CO2 footprint is being saved.
But then this would suggest that there is an endless market for, let's say, your pallets here on the screen, and that people are queuing up-
Mm-hmm
-to make profit because of the difference in price?
Yeah. Yeah, they are queuing up, but not yet to the level that we want to. No, and the reason, the reason is quite simple. I mean, the example here, this is a relatively cheap, nestable pallet. A pallet like this will retail anywhere, can be as cheap as EUR 7 to maybe EUR 15 . A wooden pallet, especially today, with the wood market being very, very low, let's say a lightweight wooden pallet can go for as little as EUR 3- EUR 4 , and, a sturdy EPAL pallet today goes for about EUR 12 . So the initial investment that needs to be made when you go for plastic can be either slightly higher or can be substantially higher.
If you go for a, what we call a logistical pallet, one that you want to run for the next 15 years, that pallet can cost you EUR 40, EUR 50, EUR 60, EUR 70, depending on all the bells and whistles that you want on it. That's a substantial initial investment that the customer needs to go through, where the payback will come over the next couple of years. And so that's often the trade-off that needs to be made. Now, that's where this comes in.
So this, still, it's a secondary argument, and to be fair, we'd love to see it differently, but it will always will be. The sustainability argument is now driving the choice. Of course, the product needs to be economically attractive, but then the sustainability officer is at the table and will make a choice for our offering if that really beats the carbon footprint.
Is there a solution to rent them out instead of selling them?
Yes. So there you can rent them, or you can pool them. Yeah, so you have, an important, outlet for us, industry for us is the pooling industry. So CHEP, who's here later today, is the, the global market leader in, in pooling. That's essentially what they do. Yeah, they charge per trip. So then you don't have to pay the upfront investment. Same time, we don't want to compete with our-- one of our major, major end markets. So we design the product, we supply the product, we leave the pooling to them.
The CO2 difference is seemingly relatively small to me, but is it only in terms of transportation, or is it also production included?
Everything. Yeah. So that includes the production of the product itself, as well as the transportation. And of course, if you go for a logistical pallet, I mean, we have pallets coming back that have date stamps from 15 years ago. So, then the dilution effect kicks in even heavier. So in that sense, yeah, we could bring up an example that's even more telling, but yeah.
The wooden pallet, it lasts, is it three, four transportation trips or not?
It depends. If you go for a lighter weight, it can be anywhere around that number. If you go for a, like, one of these really heavy EPAL pallets, it can do maybe eight, six to 10 trips, depending on how you manipulate it. So yeah. And I said we talk in the industry, we talk about breakage rate. So that's basically says how many trips you can do before the pallet breaks on average. And the logistical pallets have breakage rates that are less than 0.5%. That means they can do 200 trips or more. That's again, where the dilution effect then also kicks in on the economic side, and that's why pooling companies are so interested in going for plastic versus wood, because the return on their asset is much higher.
The last one is related to the point on the cost savings. And this is a statement of standardized use case and then the life cycle analysis that you've done. So have you done this over a wide range of use cases? And is it fair to sort of assume that in situations where it's more one stream, the use element is, and the collection is more in there than this?
Sure, yeah. Sure, you have examples like that. I mean, if we sell a lightweight nestable pallet that goes to the other side of the ocean, yeah, the reusability is not factored into your LCA. And we do LCAs for the wide variety, the full scope of all of our products. Because that's also what a customer these days is asking for.
I guess, is there any sort of way of taking the addressable market for pallets and dividing into sort of percentages where, you know, your solution is obviously very well applicable, and there are some areas that are not going to really be addressed and not a target part. It's part of the wooden pallet market, if you say that.
Yeah, well, I wouldn't be able to give you any kind of percentage, but, the way I would answer that question is you gotta look at your end application. Which industry are you serving? If you look at automotive, a lot of the automotive companies are running their own pools because they have the vast size, typically and globally. So they introduce solutions themselves. Yeah, you saw a box downstairs for BMW, for example, we designed and that with them together. So for automotive, they're far advanced. Take a chemical industry, for example, that's a lot harder.
Chemical industry, today predominantly is on wood, and the reason is they don't make a distinction whenever resin is being produced, if that resin is going to be shipping to United States or to China, or whether it's going to remain in Europe. If they put it on a more expensive pooling pallet, they want control. So essentially, what they then would have to do is they would have to build two stocks: one that is going to be exported and one that's going to stay in Europe, and the one that stays in Europe then could be on a plastic pooling pallet. And that's what's making them go back and forth, do we not? Do we, do we not? Because they don't wanna double up the working capital. So these are all kinds of considerations that are really industry-specific. Yeah.
So in the end, through the elements of reducing, reusing, and recycling, we contribute to an improved level of sustainability for our customers. Over 80% of the content that we use is recycled plastic. In total, we've processed over 120,000 tons of waste, and by doing that, we've avoided almost 300 kilotons of CO2. So that's the equivalent of what's being produced on an annual basis by roughly 70,000 people. So basically means that every single employee in this company is compensating the CO2 output for 100 citizens. I think that's also why it's really nice for you guys to be here today, 'cause the people out there are extremely proud to show what they do. That's it for me.
So on this part, joined with Guillermo, I will present a little bit the market trends on the RTP market. What we are considering to as the, the market trends in order to produce our products or develop our solutions, whether it's for the portfolio that we have or the customized solutions that we do for, for our customers. So talking about the market size, we see that the global RTP market 2022, we are talking about $86 billion, where only 9% is still on plastic. So more than 80% is wood and timber solutions, and we have also one part that is metal, which is also important in some of the applications.
On the market trends, really, sustainability and digitalization are the ones that are driven a little bit and growing faster also, these days. Also, we have the rationalization of the logistic chains, streamline, a group, the number of suppliers, partner long, long-term relationship with those that are can offer us, larger production, so, and also a bigger portfolio. We saw downstairs, in the showroom that we have down, some of the ranges that we have. So we try to cover all the spectrum, depending the applications or the industries that we are developing the solutions, and the part of the automation and robotization as well. So at the end, all these market trends are included in the development of the products that we do, and together with the benefits of plastic.
Still is the, a small part of the market, but, plastic versus the other, we will see later at the end in, in terms of hygiene. They are lighter, they are more ergonomic, they are really stable, so for the part of automation and robotization is, is much better. We can include all kind of IoT solutions into the products. And what is the expectation of the growth market is 5% of what we consider in the RTP market. Wait. Now? Okay. So that part of sustainability, which is really the trend from the company, point of view, for the corporate social responsibility, is, is really playing a, a crucial role in all the companies and, and the brand perception.
So reducing the carbon footprint is in the agenda all the time, and it's one of the things that we are more at times consulting. Also, even these days, they are asking how our products are produced and what is the contribution on the carbon footprint of the production of this solution itself. After also to in the loop that they have, how this is going to contribute or how they are going to optimize is as well another topic. In the EU regulations, we have all these taxes that is coming for one-way packaging or for virgin products.
So again, in U.K. and Spain, we have it already since last year and beginning of this year, and this is also changing the way that the companies need to work with their own supply chains and the packaging that they are using for delivering their products. We see that out of the 85 million tons of plastic or products that we converted in Europe, only 10% of that was in 2021 introduced in post-consumer recycled plastic. So companies like us, we have a lot of variety of different materials that, depending on the ranges of products that we develop, we will include one grade or the other.
Green logistics is also another topic for all the supply chains departments, so anything that we can do business-wise to minimize the environmental impact and carbon footprint of the logistics activities, so in transport, in packaging, recycling, and storage. There is a survey of Ernst & Young that says that 80% of the companies is really emphasizing on ESG initiatives. 40% of the consumer are expected to make decisions on how the raw material is sourced or the product is manufactured, and 56% of the consumers also that they need to be really transparent with the social impact of their solutions. Sorry, but I will not manage this thing. It's going, going backwards. Crazy. You are, y eah, but I think we are doing the same.
I'm mixing.
Yeah, yeah. Okay. So on digitalization, the growth of the Industry 4.0, we know it was really important and very big growth, annual growth rate. We hear the trend 2017-2023, and the companies are increasing. But also with the COVID-19, the pandemic, and the disruption in the supply chain also has accelerated this, this process. Represent a long-term resilience and also sustain competitive advantage. One of the, w e have Cabka clients among the leading adopters, so both in the States and also in Europe, names like Tesla, BMW, ABB, they are our customers, and, and they are, leading in this, in this change. In IoT and logistics, also with a growth of more than 14% in the period of 2022-2026, everything impacts in shipments, inventories, fleet management.
The two solutions, RFID, GPS solutions, all these are to be included and to understand more about the supply chains to become more efficient and have more flexibility. Automation and robotics, so here is the evolution on this part, industrial robots, that they are being placed. We have also an annual growth rate of more than 16%, and here, China is the top leader one, with 51% of growth in the number one of the rankings. We have United States with a growth of 14%, and then the first European country is Germany, with 6% on the ranking number five. With this, they are trying to increase all productivity, efficiency, cost saving, and also the quality of the products.
On the safety side, also more and more important, reduce all the risk of workplace injuries, and also make people work on, on, on the more complex and higher value activities. Offering opportunities for increasing precision, speed, and accuracy, reduce the number of mistakes or human errors that we commit, and also to be really more flexible. So apart from manufacturing, also healthcare, agricultural, and logistics are the ones that are introducing more automation and robotics. But the number one is electronics, followed by automotive.
So automation growing in the period or estimated growth for the 2023-2030, more than 11%, but when we look into the automation of warehouses and is more than 23%, and also on the cold storage chains, also 15%. So we are always talking about double-digit growth in all the different automation and robotics. This 15% on robotics on the same period, we have that the AGVs are loading or loading trucks automatically, all the shuttles that they do the picking systems inside of the companies in order to reduce also labor, which is becoming a really difficult asset to find.
Are you supplying already to those markets, or are those virgin materials being used for robotic warehouses and stuff?
No, we are supplying with recycled materials, but we have sometimes a challenge because-
Mm-hmm
... in automation and robotics, there is sometimes issues with photo cells and things like that, which they do not read black, for example, and black is one of the main colors for the recycled materials. You see, almost all our products downstairs are all black because it's the way that we produce our materials. They come from scrap or post-consumer, so they have different colors. So the only color that can unify that would be the black. So what we see, sometimes we struggle with some automation systems because they need lighter colors. And to have lighter colors in recycled, sometimes it's more difficult and more expensive. So you can do it, but also you need to, y ou know, it becomes more expensive.
Also, in relation with automation, the people that is doing the warehouses, the integrators, and so on, they have been working many, many years only for, or normally timber. So it's also for them new how to develop automated systems that are working also with recycled or plastic solutions. And that the Cabka competitive edge, so at the end is what we have as a income, or input, the market drivers on sustainability, digitalization, automation, and overall this efficiency, and the customer requirements. So customers that come with their own warehouse design, supply chain setups, goods workflow or visual appearance.
So as a input for us, Cabka, we are covering from the recycling, starting from the material, the definition of the material, which one is the one that we want to put in one solution or the other? What is the quality that we need to deliver? It, the plastic also behaves quite differently in different environments. It's not the same, plastic you need to do for cold storage than for a warehouse, 40 degrees. So you really need to come not only with the design, but also with the correct material that is going to work properly for the customer. And then all the design, the product development, that Guillermo will go in detail how we do it here, all the part of the tooling, production in large scale.
So at the end, also, Cabka as a global actor, with facilities in the States, but also in different places in Europe, we can cover much better the demand, or this is a differentiator from our competitor, the test center and the services. And on the services, again, to cover all these trends on the IoT that they need, the devices they want to include, LCA analysis, a buyback of their own solutions, whether in the States or here in Europe, and accompany them on this sometimes change, or sometimes they develop directly for a RTP solution in recycled plastic. And the output will be the solutions that we have, whether it's for incorporating in the product portfolio. As general market that we see a trend of a specific industry, like now with the automotive and the battery industry.
So there is a lot of new developments coming for that industry, so that is quite new, and then you need to jump in developing the best solution for that. At the end, again, making the emphasis on the material that we are working on, but it has a really low impact, environmental impact. They have higher efficiency.
Normally, all these concepts of being nestable, being foldable, reverse logistics is growing a lot, where because of this reusability of solutions, changing the way that our customers are less conscious about shipping one-way solutions to the end user or to the receiver of the goods by trying to figure out how they are going to recover all these solutions and give it as many turns as possible in order to help on the environment, but also on the cost per trip, which is, for them, the most important at the end as well. Superior durability and this 100% recyclability at the end of life. And then Guillermo will really explain in detail how we do that internally.
I will try. I will try.
Yeah, sure.
If I understood correctly, you mentioned there about automation and having been developed for systems using wood pallets. And, I understood that plastic pallets are very well suited for automated systems [audio distortion]
Mm-hmm
... i s that understanding correct, or, and just a sort of historical thing with some systems that we've developed just 'cause?
I think it's also coming from the standardization. At the end, the wooden pallets, is more than-
Mm
... 100 years, and the time has made that you have a standard wooden pallets. EPAL is a standard. A chemical industry runs different standards. So at the end, you have kind of a very unique in wooden, with a material that is quite stable and quite rigid.
Mm-hmm.
When you work in plastic, each of the producers, they do have kind of different designs, different heights, different whatever. So it's not so standardized. So it is really the perfect material to work on automated warehouse because rejections, we have a lot of customers, the number of rejections, safety, dirty, is, is for them, is much better. The thing is that if you think about developing your automated warehouse, understanding which solution you want to use is the perfect moment. But if this was already running for a wooden solution previously, the change is difficult. Yeah, it's not impossible-
Mm
... but then you need to adapt not only the solution that you want to have, but also the systems that you are working with.
I understand.
So we've just had to adapt to that. That's why we're working on partnering with system integrators to be there at the very early stage of designing a new warehouse concept, because then it gets combined already with the pallet solution that you're exactly tailored to what the system integrator needs should be or should become their standard. Mm. Okay, so I would like to talk about how we bring these insights that Naiara just explained, and how we take them, and we create and build a real product that makes an impact in the market. Our goal is to make an impact in the market. So in order to do that, it's important to understand what is the role of the Innovation Center.
Innovation Center plays a central role in the creation of the process and the products. Also, it's a key component on the engine of growth of Cabka. The Innovation Center was built under the vision of having a holistic approach to the creative process. We wanted to have, under the same roof, experts in the different main areas of creating a new product. That's the reason we have here the sales team and marketing team. They provide the inputs from the market, they have the contact with the customers, and then we have the material team and the lab that we'll see downstairs. They are in charge of creating the new recipes and the new materials that's going to be implemented in the products.
Also, every new product requires a tooling mold, and then the process team comes into play as soon as possible. Finally, we have the design team that are the ones in charge of engineering the products. So we have the four teams working closely in every project from the very beginning, and this close work of the four teams fosters a multidisciplinary approach to the design. So that makes that the design is optimized under every aspect. It also creates some kind of trade-offs, because at the end, the interest of one of the groups is not the same as the other one, but this instead of making detrimental, it enriches the product. So at the end, the goal is to have a robust and solid product that is optimized under every aspect.
So how we do it? We have a structured process that drives all the activities. This is a sequential process that is made in four steps. These are the four main steps. It's sequential because we want first to run all the activities in every stage before going to the next one. In between the stages, we are having checking points. We try to check that from one step to the other step, we are going always in the right direction. Everything starts with a challenge. First point is a challenge on the table, that it's an emerging trend or a new requirement from a customer. With this challenge on the table, that creates an opening, a wider space in the market, and we try to fill it with an innovative product. Innovative product that solve the problem in a-