[ { "start": 3.0, "text": "Thomas Fetting: you know, as a family business, you think a bit differently and sometimes a bit crazy, I'd say, since 2012, '13, we've set up our own magnet production because we said, \"Come on, we'd like to do that.\" Invested several million euros in these machines and practically brought knowhow in from the market, set up our own production. Then we said, now we need to take more material back from the market in order to do this recycling thing. We are practically launching the take-back system and are now making sure that we actually implement it. That means this reuse that is feeding product magnets back into production Is already daily business for us. And then the issue of magnet powder, we finished the qualification there, ordered the first tonnages, and our goal is to manufacture several thousand pumps this year using recycled rare earth material from what our customers, the installers, have returned to us, uh, back into the production of new pumps. So how you imagine recycling in theory, we live it in practice.", "end": 74.0 }, { "start": 74.0, "text": "Jingle: My name is Patrick Hypscher, and this is circularity.fm, the podcast about understanding, building, and managing circular business models.", "end": 98.0 }, { "start": 98.0, "text": "Patrick Hypscher: This is the third episode of B2B Take-Back. In the last episode, Thomas Meyer showed how a deposit turns a used item into something that finds its way back. Today, we're talking about pumps and about a return process that works without a contract, without a deposit, and without payment. A quick note to start with, this episode marks a real innovation for circularity.fm. We originally conducted this conversation in German. You can find the German original version on YouTube, whilst the podcast channels, like this one, feature the English translation with AI-generated voices for Thomas and me. This allowed Thomas to speak freely whilst ensuring you get the insights in the best possible quality. A one-page summary of our conversation is available in the newsletter on circularity.fm, along with the details of upcoming circular economy events worldwide. Now, I'm handing the mic to our hybrid voices.", "end": 164.0 }, { "start": 164.0, "text": "Patrick Hypscher: Our guest today has been working for Wilo for 38 years and has held various management positions in service, development, quality, and repair. Currently, he is responsible group-wide for processes in technical warranty analysis, product recycling, and the circular economy. Welcome, Thomas.", "end": 186.0 }, { "start": 186.0, "text": "Thomas Fetting: Hi, Patrick.", "end": 188.0 }, { "start": 188.0, "text": "Patrick Hypscher: Thomas, we always start with a personal question, and our series is all about take-back. What is one product that you would personally never give back?", "end": 200.0 }, { "start": 200.0, "text": "Thomas Fetting: Wow. And a question that wasn't even agreed beforehand. Brilliant, brilliant. Well, what I wouldn't give back, um, a, a, a wristwatch. I mean, I, I, I'm like, I have, uh, several wristwatches, and I've somehow noticed myself that I have quite a few lying in my... in, in the drawer and actually never thought of giving them back. And I'm also still kind of attached to the older watches, even though I don't really wear them anymore. So a wristwatch, that's what I'd say off the cuff.", "end": 233.0 }, { "start": 233.0, "text": "Patrick Hypscher: Yeah. Super, uh, super interesting that you say that because, about six months ago, I did an episode with Breitling, who also make, uh, really great wristwatches, and also on the topic of the circular economy. And that fits in well with what you're saying because watches very often increase in value over time, and that is a huge potential in terms of the circular economy. Usually, we always have to struggle with products decreasing in value, and, uh, that was an interesting conversation. But that's not what we're here to talk about, not about watches, but about pumps. And I've already mentioned you're with Wilo. Um, tell us briefly who is Wilo and what is your product portfolio?", "end": 280.0 }, { "start": 280.0, "text": "Thomas Fetting: Well, Wilo has been around for more than 150 years now. We are in, uh, the head offices in Dortmund, and we produce pumps and water technology systems. So we move water in every shape and form, and we have 15 production sites worldwide, 9,000 employees, and turn over about 2 billion worldwide. And, uh, especially the Dortmund site here, anyone who has the time and fancies visiting us, it's, um, really turned out nice. In recent years, we've invested 400 million euros in this site, completely reinvented the factory. So on one side of the street, we bought everything, everything that was there, and completely rebuilt ourselves. There isn't a desk or a production area left that's still old, so it's all, uh, really become a beautiful, great factory for us and above all, for the employees. It's, yeah, security for the site and that, uh, that makes it fun to work in this company too.", "end": 336.0 }, { "start": 336.0, "text": "Patrick Hypscher: Okay, that sounds like something you really have to go and see. Now we're talking because of your take-back program. What is it about at its core?", "end": 344.0 }, { "start": 344.0, "text": "Thomas Fetting: Yes. At its core, it's about us having, first of all, with our pump, actually a very, very, very good product for putting circularity into practice. I'd say to practice circularity, you need three things. You need a product that is suitable for it, and our pump consists of many raw materials. It is, uh, easy to dismantle. Therefore, the pump as a product is wonderfully suited for this. The second thing you need is, well, volume. That means if we only had a volume of one, the whole thing wouldn't be much fun either. That means high volume, and we produce several million pumps, uh, for the world annually. Uh, that means the volume, and we already get quite a bit of volume back. I mean, you can't make an omelet without breaking eggs. So warranty returns, goodwill returns, wrong deliveries, incorrect deliveries, duplicate deliveries, all of this is standard for us in, um, in, in reverse logistics. That means we have the volume too. And the third thing you need, and this is what we've had at a very, very high level for a few years now, is the motivation to do something. So not just talking and thinking about what could be done, but actually practicing something. So those are the three things we've identified that are very high for us: product, volume, motivation. So we said, uh, we want to get into the doing, so really, uh, get more back from the market. Today, when an old pump is removed, it ends up on some scrap heap where motors sort of end up, and then they're shredded somewhere to get the copper out, but we see the opportunity to get much more out of it. They contain rare earths and, um, uh, we want to get them out. We place great value on that, uh, because back in the '90s, not today, now we're thinking about it. Back in the '90s, we already developed our high-efficiency pumps in such a way that we can dismantle the rare earth magnets from the pumps again without destroying them So we developed them that way. So today we want to benefit from that too, and that's why we want to get more old pumps back from the market to get these rare earth magnets out of the old pumps to then keep them in the cycle.", "end": 477.0 }, { "start": 477.0, "text": "Patrick Hypscher: Okay. And, uh, just to get a bit more of a technical benchmark to understand it, when you say the '90s, so the pumps that came onto the market then, um, what is, what is the lifespan, um, or the range of lifespan of newer pumps?", "end": 492.0 }, { "start": 492.0, "text": "Thomas Fetting: Well, you have to know that with a pump like that, uh, you talk about glandless pumps, which we manufacture in high volumes. Um, the rotor, the rotating part actually has no mechanical contact. It floats in the water.", "end": 506.0 }, { "start": 506.0, "text": "Patrick Hypscher: Mm-hmm.", "end": 507.0 }, { "start": 507.0, "text": "Thomas Fetting: Therefore, they are actually wear-free. That means these pumps, uh, they spin, spin, and spin. That means running times of 15, 20, 30, 40, 50 years are absolutely no problem for these products. And for that, these rare earths are also needed and also the electronics because they are regulated pumps. There's a lot of control technology behind it, and a pump really runs, yeah, 15, 20, 30. Now, it's absolutely no problem at all, but after about 15 years, that's when it slowly starts that the electronics, um, maybe get tired too, and, uh, 20-- But that's, like, 15, 20 years, that's when, that's when the failure rates slowly start to appear, I'd say.", "end": 549.0 }, { "start": 549.0, "text": "Patrick Hypscher: Okay. Okay. And you described, uh, at the beginning a bit abstractly, uh, that you started taking things back precisely because the design is, um, suitable for it and the conditions are there. Were there specific triggers, uh, or a moment or event? Often it's a bit of a combination, but how, how did it start with your take-back program?", "end": 569.0 }, { "start": 569.0, "text": "Thomas Fetting: Yes. Well, we had, yeah, I'd say, I must say we had a bit of an aha moment when in 2011, uh, there was, um, an export ban from China. Uh, this export ban then caused the price back then to go up from €30 a kilo to €300 a kilo. And then we just said to ourselves, and also because, you know, resources were getting scarcer as far as all that was concerned, and then we said, \"Let's embark on this journey.\" We then did a research project, um, with the Westphalian University of Applied Sciences, Gelsenkirchen, uh, um, which was funded by the DBU, the German Federal Environmental Foundation, uh, where we then sort of thought about with tradespeople and wholesalers, how could you set up reverse logistics for old pumps to benefit from the fact that we actually developed the pumps in the '90s for that as well, right? Then I'd say we actually laid out the red carpet for ourselves in the '90s, and, uh, we then also said, \"Yes, then let's also step onto that carpet and think about getting more back from the market as well.\"", "end": 633.0 }, { "start": 633.0, "text": "Patrick Hypscher: Let's look now at how you did it. Uh, what are the channels through which you collect the pumps?", "end": 640.0 }, { "start": 640.0, "text": "Thomas Fetting: Yes. Well, you have to know that we, um, with us, it's standard in the plumbing and HVAC industry that we work in the so-called three-tier distribution channel. That means we manufacture products, we sell them to the wholesaler, the wholesaler sells them to the installer, and the installer installs them. That means as a rule, you don't even know in the building where you are right now, what kind of pumps are currently installed there. So if a heating system, for example, doesn't work, you call the installer, they come by and repair the system. And the parts they need for that, they actually decide that themselves. That means they decide whether they install a, a, a green Wilo pump or whether they install some other make. They are the one who is practically in the driving seat. That means the installer, we practically have to motivate them to hand over the removed pump to us, which today in the standard process, they put into some kind of mixed scrap container.", "end": 700.0 }, { "start": 700.0, "text": "Patrick Hypscher: Mm-hmm.", "end": 701.0 }, { "start": 701.0, "text": "Thomas Fetting: Ends up somewhere at a scrap dealer. In the best case scenario, um, they put it with motors in one fraction, and then they end up at a scrap dealer, and, uh, then they get shredded somewhere there. And then, yeah, sure, for the circular economy that's good because copper, aluminium, iron are really kept in the loop there. But the rare earths are lost forever. So there is no recycling process today that manages to recover these rare earths from this shredder fraction. That means they are gone forever. Gone for good. And that is precisely where we say, um, this, this resource of rare earths, we want to keep it in the loop. And for that we have to motivate the wholesaler and the specialist installer, so our distribution channel to play along. Without them we can't. Without them we can't do it, because they have-- they are actually in the driving seat and they can say, \"We'll give it to you or we won't.\"", "end": 752.0 }, { "start": 752.0, "text": "Patrick Hypscher: And how did you succeed in doing that?", "end": 755.0 }, { "start": 755.0, "text": "Thomas Fetting: You really need a story , Um, to motivate people, um, yeah, to make the change process. So really a change in their daily business, because it's easy just to throw something into that box where they've always thrown it. And we say, um, our products are electrical products, and it comes from the legal side, first of all. So our pump is just like, um, like a drill, like a toaster, coffee machine, an electrical product that we have to register monthly with the authorities which we place on the market And these products must be returned to so-called primary treatment facilities. So I don't want to go too deep into this law now. The fact is the path that exists today is not legally clean.", "end": 797.0 }, { "start": 797.0, "text": "Patrick Hypscher: Mm-hmm.", "end": 799.0 }, { "start": 799.0, "text": "Thomas Fetting: That means we say, \"If you want to be legally clean, um, then give us the old pump.\" You know this from the private sector. If you have a faulty electrical appliance there, then you go to the local authority's recycling center or whatever it's called, and that's how you have to see it. So they have to be approved collection points because these collection points then also report to the same authority what they have collected, to the authority where we also report what we have placed on the market. And thus Germany knows what percentage of the electrical appliances placed on the market are collected. All countries have the task 65, so of the EU, 65% of the electrical appliances placed on the market must be collected again for recycling. Germany is the only country in the EU that doesn't manage it. Germany is at just under 40%.", "end": 848.0 }, { "start": 848.0, "text": "Patrick Hypscher: Mm-hmm.", "end": 849.0 }, { "start": 849.0, "text": "Thomas Fetting: So, and we say with this participation, uh, and handing over the product to us, uh, we also report the quantities to the authorities. That means they don't bypass the legislator. We tell the installer, \"If you give us the product, you are legally compliant.\" Now, installers say, \"Yes, but nobody has ever asked me. Um, and actually I haven't heard of a fine either.\" And I can say that in North Rhine-Westphalia it's like this, that installers at most, so it takes 15 years before our enforcement checks installers and asks them, \"What do you do with electrical appliances?\" So that is, it's not daily business for them, I'd say. But I always tell the installer, \"Who's to say that tomorrow those 15 years won't be up for you?\"", "end": 892.0 }, { "start": 892.0, "text": "Patrick Hypscher: Mm-hmm.", "end": 893.0 }, { "start": 893.0, "text": "Thomas Fetting: \"So be legally compliant,\" we say. \"Give us the product.\" Point number one. The second thing is people are always very quick to complain that manufacturers can't deliver. A ship gets stuck sideways in the Suez Canal and Europe can't produce Right? Uh, and those are the kinds of things, and then as an installer you get annoyed very quickly. \"Yeah, why?\" And so on. And I say or we say that, um, if you give us the pumps, we'll make sure that we keep the rare earths from the processes practically in the cycle to avoid such supply bottlenecks. And dear installer, you can be a part of this by participating in the whole thing, right? But the installer told us in a research project, in this project funded by the DBU back then, we said it was important for him. It has to be simple. He says, \"I have staff shortages, and I, I, I... It has to be simple.\" And we really set up the process like this. as an installer, You set up a box, you put everything in there that's, that are pumps, all kinds of pumps, regardless of age, condition, manufacturer independent, so also from other brands. You pack the pumps into this box. Once the box is full, you let us know by phone or by email at pumpenrecycling@wilo.com And then we organize a collection. We pay for the collection. We collect the full box, put an empty pallet cage there for you. As an installer , you only have to fill the box, send an email, and worry about nothing else. And then the installer said, \"Yes, that's simple.\" And then in the end, he gets a certificate from us in the form of a weighing card, which practically, um, uh, states how many kilograms he gave us. And if he were ever to be audited by the authorities, he shows the certificate and he's off the hook because he worked in a legally compliant way. but on legal compliance, I still have to, to say a very important point because I just said other brands and, and, and reporting to authorities and all that kind of stuff too. So I, uh, spoke, yeah, six years ago it is by now with the, uh, uh, with the, with the Foundation for Waste Electrical Equipment in Nuremberg and told them, \"Yes, we plan to take back old pumps here, but the installer wants it to be simple. And for that we also have to take other brands so he doesn't have to think about it. He should just put pumps in.\"", "end": 1036.0 }, { "start": 1036.0, "text": "Patrick Hypscher: Just quickly, the, the foundation, what role does it have?", "end": 1039.0 }, { "start": 1039.0, "text": "Thomas Fetting: The EAR is practically the body where all manufacturers, all manufacturers of electrical appliances have to report monthly the products, uh, they place on the market.", "end": 1051.0 }, { "start": 1051.0, "text": "Patrick Hypscher: Mm-hmm.", "end": 1052.0 }, { "start": 1052.0, "text": "Thomas Fetting: And they are only allowed to place them on the market once they have practically registered their products there. So anyone who produces an electrical, uh, appliance which potentially goes into private use, then he has to do the quantity reporting monthly, and if he has some that go into commercial use, he has to do it once a year. But the authority therefore collects all weight tonnages of electrical appliances placed on the market Germany-wide. This is done in all 27 EU countries, by the way, as well. And, uh, there's the authority and then all, uh, all collection points like the recycling center and so on have to report the quantities of electrical appliances they collect in turn to the same authority what they practically collected. And that's how Germany knows how much is on the market and how much we have collected.", "end": 1103.0 }, { "start": 1103.0, "text": "Patrick Hypscher: Okay. Yes.", "end": 1104.0 }, { "start": 1104.0, "text": "Thomas Fetting: And when I told this authority six years ago what I planned to do or what we wanted to do at, at Wilo, namely to take back pumps and it should be simple, we also want to take back other pumps, they said, \"You're not allowed to do that. You are not allowed to take back products from other manufacturers. Only so-called primary treatment facilities are allowed to do that. That is an additional, uh, uh, certification that you require, and, um, yeah, you, you don't have that and therefore you are only allowed to take back your own products.\" I spoke to the gentleman from the EAR about, about three months ago. Uh, we are in active exchange with him and, um, because six months after that phone call six years ago, he actually had this certificate of ours lying on his desk.", "end": 1148.0 }, { "start": 1148.0, "text": "Patrick Hypscher: Mm-hmm.", "end": 1149.0 }, { "start": 1149.0, "text": "Thomas Fetting: And he said to me in the conversation two months ago, \"Mr. Fetting, when I told you that six years ago, I wouldn't have dreamed that you as a manufacturer would get certified as a primary treatment facility.\" We, we, we were very surprised about that. We were the first manufacturer in Germany to get certified as a primary treatment facility. For many years, we were also the only one. Now there's a second one. I think Miele has now followed suit. They are also a primary treatment facility. But we really, um, did things properly. That means if we here, we can't tell the, the installers, \"You should be legally compliant,\" and we aren't ourselves. So we said, \"Let's get certified. We are a primary treatment facility, and we would even be allowed here at our site.\" It's always quite funny, but I'd rather not say it like that. Um, we would even be allowed to recycle toasters, coffee machines, and co here as well. We don't want to. We don't want to. We focus on pumps, and that works. So the bottom line is, um, um, legally compliant, a story you see installer become legally, uh, uh, compliant and do something for the circular economy by giving it to us as the manufacturer, and we keep the rare earths in the cycle. And this story, when you have a story and you want to take something back, um, then installers are also willing, and they see, yeah, that is simple. It really is simple for him. We don't do contracts and all that nonsense. None of it, right? It's simple for him, and then he plays along, and he doesn't get any money because if he goes to a scrap dealer today, he gets money for it.", "end": 1244.0 }, { "start": 1244.0, "text": "Patrick Hypscher: Mm-hmm.", "end": 1245.0 }, { "start": 1245.0, "text": "Thomas Fetting: He gets about 10, 15 cents per kilogram for it. He doesn't get anything from us because he also realizes, \"Oh, come on, for a cage pallet like that, what do I get? 20, 30, 40 euros. Then I have to write an invoice, do the bookkeeping. Someone has to check it. It's not worth it.\" We're always crying out for less administration. And then there are times when you have to say, you just have to, yeah, when it comes to writing an invoice for 20 or 30 euros, everyone says, \"My God, come on, um, let's forget it.\" And then we have a simple process, and that's what sets us apart from many others. I mean, we currently have 733 collection points in Germany. 80% of those are at specialist installers in the plumbing and heating sector, and, uh, 20% are at wholesalers where several installers fill this box at the wholesaler. So you can actually say today that well over 1,000 installers are already participating in this system.", "end": 1306.0 }, { "start": 1306.0, "text": "Patrick Hypscher: Okay. And, um, that means the box is now only on the, uh, on the construction site in exceptional cases, but is always in the installer's yard or at the wholesaler's?", "end": 1317.0 }, { "start": 1317.0, "text": "Thomas Fetting: Exactly. Exactly. And those are the pumps, if you can imagine the size of them. So everything that I always say that one person can carry. So in a single family home, there's a pump in there that weighs about two kilograms, uh, goes up to, yeah, about 15, 20 kilograms as well. So products that one person can easily, uh, uh, practically, uh, carry, that's what's in focus and what's in the collection. But even if a pump comes in that takes two people to lift, it's not the kind of product where you'd say, uh, where you need a, a crane, uh, and it weighs a ton or whatever. So we're talking about in a cage pallet like that, when it's full, there are about 100 products in there, 100, 100 pumps.", "end": 1364.0 }, { "start": 1364.0, "text": "Patrick Hypscher: Yes. Okay. And the 20% of wholesalers, uh, do they participate for the same reason as the installers?", "end": 1376.0 }, { "start": 1376.0, "text": "Thomas Fetting: Yes. Yes and no. So the wholesalers at the beginning, we actually only wanted to go through the wholesalers because we said, \"Come on, they have the collection point. They have the, they have the location.\" And, um, but they didn't really want to play along at the beginning, the wholesalers. And then that was the first hurdle we had at the start, and we, um, then, um, said, \"But we're not stopping now,\" and instead spoke to the installers. The installers were motivated, uh, uh, to take it to the wholesaler too, but only a few wholesalers were active and really on board at the beginning. So Pietsch is one I can mention as a role model. They're in the Münster area and are quite well represented, and they were also involved in the research projects back then. So they were the first, they were the pioneers, and then a few others followed. More and more manufacturers want a take-back system and are approaching the wholesalers. So there's more than just the request from Wilo. When we first asked back then, they said, \"Yes, but we can't put a box here for every single manufacturer.\" Uh, and, and I understand that too. I understand that. You know, if, yeah, they want to-- they run the business, and if they now also have to have space to have, I don't know, 10, 100, different boxes from different manufacturers standing there because everyone wants their material back. And that's why we are currently thinking about an industry solution with the, uh, German Wholesalers Association. So taking our existing take-back system as an example and teaming up with other manufacturers and thinking about creating an industry solution, namely saying that the, the wholesaler has one box standing there and they put lots of products in it from different manufacturers and different things, not just pumps. And then we will practically arrange a collection with a strategic partner, uh, and this strategic partner, uh, then practically sorts it for each manufacturer ready to go. And so the wholesaler doesn't have lots of boxes standing there, but just one box. That's the idea we're currently developing and where we're currently thinking about going in this direction. But, you know, using the origin, our take-back system, um, to make the thing bigger too, because it actually works.", "end": 1512.0 }, { "start": 1512.0, "text": "Patrick Hypscher: Okay. Then let's look at it from the Wilo perspective again. The pumps are collected in the cage pallets, then probably come to you via logistics partners. What happens to the pumps when they arrive at your site, or do they even arrive at your site or-", "end": 1528.0 }, { "start": 1528.0, "text": "Thomas Fetting: Yes, yes, gladly. And that's exactly what we're also looking after in another project. So today it really is the case that If a cage pallet is full in Munich, we drive it all the way to Dortmund. And that is, of course, uh, borderline in terms of sustainability, but, um, we want to, or we've been doing this for a few years now, um, also to learn what's in the boxes, which products, which types, which quantities, so that we even know what we're talking about when we do it differently. That's why we're currently looking for strategic partners with the goal that if a box is full in Munich at some point, it should be processed in the Munich area, so that in the end, in the best case scenario, I'd say, we only get the rare earths sent here, for example. But today it's like this, box full in Munich comes to us in Dortmund or full anywhere in, in Germany comes to us in Dortmund. Then we do a sorting here of the, of the cage pallet products with rare earths and without rare earths. The ones, the, uh, without rare earths, we then market them practically so that we can somehow get this whole process of transport costs, handling costs on track so that we don't lose money on it either. And that's how it is at the moment. So at the moment it's a, a sort of break-even calculation as we always say, you know. But the products that contain rare earths are dismantled by us, by industrial employees here at the Dortmund site, so not somewhere, you know, in Europe, but here at our site in Dortmund. Manually. There's no automation. We're also currently thinking about automating this in research projects, but the variety of products. And then we have to consider we're talking about 20, 30, 40-year-old pumps, dismantling them and doing it automatically. That's, that's a bit different from a mobile phone that's failed after two years where you think about automation. So that is quite... But yes, it's dismantled manually here, and then we get the rare earth magnets back out of the pumps, and it really is the case that these rare earth magnets are not, are not a wear part, are not a safety relevant part. So we demagnetize this, this, uh, these magnets, and this, this magnet is just as good as a new magnet afterwards. And through the take-back system, the pumps we've taken back over the last, yeah, four or five years, we've now recovered 30,000 magnets from old pumps and built them into new pumps again. So recycling at a very high level, a very high level indeed. And, uh, that's what we do. And the second thing is that we, if we can't use the magnet anymore because its design has undergone some major changes or it's somehow broken or corroded, we collect these magnets and then give them to our partner, which is, uh, Heraeus.", "end": 1705.0 }, { "start": 1705.0, "text": "Patrick Hypscher: Mm-hmm.", "end": 1706.0 }, { "start": 1706.0, "text": "Thomas Fetting: We've spent nine years researching with them on how to turn old magnets from electric cars, hard drives, e-bikes, and, and, um, back into magnet powder Because to manufacture a magnet, you need magnet powder. So we, we have our own magnet production, which is totally unusual. I mean, I don't think any car manufacturer, tool manufacturer, and company in Germany has their own magnet production. So we order powder from China and practically manufacture a magnet from it. Everyone else orders finished magnets from somewhere in the world, usually in, in China too, you know? So, uh, we've set up a process together with Heraeus to turn old magnets back into powder. And because we have our own production where we need powder, we want to make new magnets out of these old magnets once we've made the powder, you see. And that is, you know, as a family business, you think a bit differently and sometimes a bit crazy, I'd say, to think so long term to develop a '90s product. Since 2012, '13, we've set up our own magnet production because we said, \"Come on, we'd like to do that.\" Invested several million euros in these machines and practically brought knowhow in from the market, set up our own production. Then we said, now we need to take more material back from the market in order to do this recycling thing. We are practically launching the take-back system and are now making sure that we actually implement it. That means this reuse that is feeding product magnets back into production Is already daily business for us. And then the issue of magnet powder, we finished the qualification there, ordered the first tonnages, and our goal is to manufacture several thousand pumps this year using recycled rare earth material from what our customers, the installers, have returned to us, uh, back into the production of new pumps. So how you imagine recycling in theory, we live it in practice.", "end": 1837.0 }, { "start": 1837.0, "text": "Patrick Hypscher: Yeah. So I'd already have another 20 questions about magnets and recycling, uh, that I'll park, for a moment. But it's incredible how holistically you think about this. and even if some connections are still missing, yeah, you still keep going and then produce them. But, uh, back again, I understood. So some pumps you refurbish per se, then market them through your existing sales channels so that I, uh, can buy a refurbished pump, uh, directly from Wilo? Or how, how does that stand?", "end": 1869.0 }, { "start": 1869.0, "text": "Thomas Fetting: No, no, no. So that is, uh, that is what we currently don't do. So we don't have any refurbished pump-", "end": 1878.0 }, { "start": 1878.0, "text": "Patrick Hypscher: Mm-hmm.", "end": 1879.0 }, { "start": 1879.0, "text": "Thomas Fetting: let's say. But, um, we, we think more in the direction of, of the topic of reuse. Uh, we think about individual components when it comes to refurbishing. So we've now taken the first step of refurbishing electronic modules. Electronic modules from our current generation, the Stratos Maxo. There we are. We're currently bringing out the first refurbished modules. So yeah, 500 to 1,000 a year we'll produce of those. But not as, as, as I'd say, a competitive product to our new product, but as a manufacturer, we think more like we want to keep the rudder in our own hands. That means we'll use it as a spare part And it will also go to our subsidiaries who today practically have to replace product modules under warranty and goodwill, uh, practically and use a new product for that. We then practically want to use refurbished products, refurbished components. As an industrial company, it's always very difficult to really, um, present a refurbished product as, as with its own part number and then to the market. Then I also have to have this quantity, and we, we currently have, of the modules, I'd say a good 500 per year where we know we definitely have that quantity. But Patrick, how do you want to handle it if suddenly, uh, uh, 5,000, let's say, uh, see the need and then want to have this? Then we can say, \"Yes, we don't have that many,\" I'd say somehow too. It means you always have to be very careful when you say, um, refurbish, and then really you also have to be able to offer it and you also have to be able to deliver. And we want, as a manufacturer, that's our motivation at the moment, to have the rudder in our own hands and to use it, uh, with our service in, in the, in the quantity where it makes the most sense without generating a demand out there as well. Nevertheless, we are of course also thinking about doing refurbished pumps, but, um, there too, whether we will really then offer the product in the market I see, I see rather not at the moment. But still doing these things, refurbished pump, we already have the first models lying around, but we don't want to sell that as, as a product to the outside, but rather for warranties or there are many, many chambers of crafts and, and, and training centers that need pumps to test, to play, to do, to supply such things with it. That's what's going on in my head at the moment and what I hopefully also implement.", "end": 2033.0 }, { "start": 2033.0, "text": "Patrick Hypscher: Mm. Yes. Yes, and the lifespan of your product certainly plays a role there too, uh, doesn't it? Uh, so that, that, uh, you- pumps that were state-of-the-art 20 years ago, um, probably only in exceptional cases are now in demand. You certainly have a better portfolio by now.", "end": 2048.0 }, { "start": 2048.0, "text": "Thomas Fetting: That's also when you think about the topic, you want to have a today's product and when you then 20, 35-year-old pumps. So that is only with, with the, with the right sense of proportion, uh, you have to look at that. There are products where that is excellently suited, let's say short-lived products like mobile phones and, and all that sort of thing somehow too. Um, that fits very well, I'd say somehow too. But with such long-running products, I always see that as a bit limited. It's just like this, this point from the recycling industry, which always likes to have a recycling-friendly product design.", "end": 2083.0 }, { "start": 2083.0, "text": "Patrick Hypscher: Yes,", "end": 2083.0 }, { "start": 2083.0, "text": "Thomas Fetting: So the big recyclers that exist and their plants too, uh, when they then always say in such events, \"Yes, recycling-friendly products the manufacturers must.\" And so I always say, I then always turn the mirror around and say, \"Dear recycling or dear recycler\", I don't even want to mention the names now, everyone knows them I think, um- We have a product that runs, let's say, 20 years. That means if I want to design that in a recycling-friendly way, then you have to tell me in the development phase of this product what I have to pay attention to. That means this recycling industry, as I call it, actually has to tell us what can it do in 20 years. What it can do today is not relevant at all. I must, I must know in which direction are you developing with AI, because I am firmly convinced that AI will, will also in the disposal recovery recycling industry really bring speed into it. What product recognition, we've done first tests, sorting products with, with rare earths, without rare earths. We did a few trials with the postfold colleague from Bottrop with Paul Savo Müller, and just recognizing that with AI camera and then sorting. So things will happen there. So I have to tell recycling, they have to tell us what can it do in 20 years, then we can also pay attention to that today during product development. And that doesn't happen at all. There it needs much more cooperation, collaboration between the recycling industry and the manufacturing industry to manage the maximum of circular economy in the future. We must work together.", "end": 2179.0 }, { "start": 2179.0, "text": "Patrick Hypscher: Yes. Yes. Okay. And to get the full picture, so you sort the pumps, dismantle them, components that can still be reused are primarily reused internally in the service and repair area, so through internal processes and not marketed as individual components. And then I assume there are still materials, components for which you have no further use, which are also defective, and they are then disposed of via the normal, uh, um, electronic waste route.", "end": 2209.0 }, { "start": 2209.0, "text": "Thomas Fetting: Yes. We, we, we don't have to explain to the recycling industry how to keep copper, aluminum, iron, and all those things in the loop. When I give, like, keynote speeches and all that sort of thing about it, I say, \"Keeping things in the loop belongs in the hands of the manufacturers.\" But I say it's not that we want to build a, a shredder plant here now, but I always say leading because we have the know-how. We know what our products consist of. We know how they can be dismantled. We know our customers. We know the sales channel, and only we can do something. We can do the maximum. The waste management companies, recyclers, they can shred and then separate and, and keep the, the, the materials in the loop too, you know. But the maximum of the circular economy of keeping things in the loop is in refurbishing, in reuse, in repair, in remanufacture, and, and, and. That means keeping the product shape intact and then doing something with the parts is a much higher quality than just shredding it small and only having the material in the loop. And for that, the manufacturer, uh, has to take responsibility and, well, drive the issue forward. And that is what we have been actively doing for, uh, several years now and really implementing it too.", "end": 2282.0 }, { "start": 2282.0, "text": "Patrick Hypscher: Then let's look at these levers towards the end, so a bit like the business, model. You just spoke about the value. What are the main revenue items?", "end": 2292.0 }, { "start": 2292.0, "text": "Thomas Fetting: Let me just give you a few figures. If we, if we, uh, pick up a, a, a pallet cage somewhere in Germany, there's about 600 kilograms in it, right? That's about the average. I can say something about the quantities in a moment too, so that you can also hear that, that the, the quantities are being moved there too. Um, so 600 kilograms are in there, and we pay for the logistics across Germany on average, you know, whether picking up around the corner or in Munich is a difference. Uh, we pay about a hundred, €110 to pick up the pallet cage and then put it back empty for the customer. For such a pallet cage with pump scrap, uh, we get, we get re-revenues. So for the material value then, once we've dismantled them, or also the products that are without rare earths, which we then send directly for recycling, we get about, yes, depending on where the copper price is on the stock exchange at the moment. Right now, it's very high. Copper is very, very expensive. Uh, for us as a company, that's not so good. But as a recycler or someone who looks after the, uh, uh, issue like here now, that is in turn good. Uh, we get between 500 to, yes, about €500 a ton.", "end": 2364.0 }, { "start": 2364.0, "text": "Patrick Hypscher: Mm-hmm.", "end": 2365.0 }, { "start": 2365.0, "text": "Thomas Fetting: So now we have all the handling that we have in addition to transporting, uh, 600 kilograms are in there, let's say about 250, €300 or thereabouts you get for such a cage if I didn't do anything with it now.", "end": 2375.0 }, { "start": 2375.0, "text": "Patrick Hypscher: Mm-hmm.", "end": 2376.0 }, { "start": 2376.0, "text": "Thomas Fetting: We have industrial workers who manually dismantle a pump here with, with a cordless screwdriver, uh, and levers and so on, and, and, and press out the magnets in the end with, with hand presses and all that sort of thing.", "end": 2387.0 }, { "start": 2387.0, "text": "Patrick Hypscher: Mm-hmm.", "end": 2387.0 }, { "start": 2387.0, "text": "Thomas Fetting: Um, and this, uh, all of it is such that at the moment we are at a point where, well, we don't lose money But we don't make a profit either, I'd say. That's why we say, uh, we need to think more about the topic of automation. We want to think about that. Um, but for that, we first had to gather insights over all these years. Which pumps in what quantity, in what size, right? Do I need a, do I need a screwdriver that-- W-what loosening torques do we have? We are currently participating as an associated partner in a research project with the IPA in Stuttgart. They were here then and measured loosening torques, like how tight is a screw after 20 years, let's say, somehow too, you know. All these things, uh, we are currently testing and are in the process of, well, looking at how we can best automate too, and we've always said we want a simple process. In future, we will also try not to pay the tradespeople anything for it, because then we have administration again. But if the time comes when we say there's a, a good amount of money left over, then we don't want to pocket the money from the products that the tradesperson gave us, but then we will do some sustainable things with it, and I'd say then, I don't know, plant trees. No idea. So we will show as a company that we can't profit from this, from this profit, uh, where a tradesperson gives us their pump for free, but we will make sure that we do some sensible and, and sustainable things with it. Those are like, like, like the steps that are coming. So at the moment, break even, uh, but we never-- we definitely don't lose money at the moment. Definitely not. And that is what I always say to all, uh, other manufacturers too. Look at your product. The whole thing, uh, has to be fun for the company too, and not just seen as an investment and always n-numbers, numbers, numbers. And the pump, as I said, is perfect for that. But there are also many other products that would be suitable for something like that too.", "end": 2494.0 }, { "start": 2494.0, "text": "Patrick Hypscher: And does it make a big difference that you have a certain proportion of products with rare earths?", "end": 2500.0 }, { "start": 2500.0, "text": "Thomas Fetting: Well, currently in the pallet cages, there's about 15 to 20% with rare earths and 80% without rare earths. But the quantities are increasing, of course, that means we-- I'd say in-house when we develop a product, we need three, four, five, six years. Here too, we are developing a, a product reverse logistics for the future to supply ourselves with material too, you know? That means the quantities will increase when it comes to rare earths and, um, then we will also benefit from that. And, um, but the plant is in Germany, in Bitterfeld, even if that sounds very international. So it's in Germany, this plant, and it can turn 600 tons of rare earth, uh, magnets back into powder. But that's like for us, you know, this material resilience also has a bit to do with it. But with the recycling of rare earth materials, you get less CO2 compared to producing a new magnet So that's already, um, uh, when it comes to the climate, and we're all talking about that again at the moment, I'd say. If we really make powder out of it again and use it ourselves again too. And that's what we're focusing on. We know the Earth's resources are non-negotiable. What's gone is gone, and, uh, this, the consumption that we do here in Germany, Europe, and the world, I'm always afraid of when, when, when everyone in India, Africa, and China wants the same standard as we have here in Europe, which they are entitled to-", "end": 2587.0 }, { "start": 2587.0, "text": "Patrick Hypscher: Yeah.", "end": 2587.0 }, { "start": 2587.0, "text": "Thomas Fetting: which they are entitled to, I always say, \"Where is all the material for that supposed to come from, if not from recycling?\" That's why, well, we all have to start the change process, as they say nowadays.", "end": 2599.0 }, { "start": 2599.0, "text": "Patrick Hypscher: Yes, absolutely. Absolutely. Thomas, my last question connects to how you started, and that's also to some extent supply chain resilience and dependency. There are currently many reasons why supply chains are patchy. Um, to what extent are you already there with your program that you can say by taking back the pumps, you have a certain independence from individual materials?", "end": 2626.0 }, { "start": 2626.0, "text": "Thomas Fetting: That would be a dream, of course. Um, it, it, it would be a dream if we could say everything we take back, we then put into the recycling process here and can make the new pump entirely from that. That is, like, the, the vision to say I build a p- uh, I'd say cradle to cradle in, in, in, in, in the broadest sense.", "end": 2645.0 }, { "start": 2645.0, "text": "Patrick Hypscher: Yeah.", "end": 2645.0 }, { "start": 2645.0, "text": "Thomas Fetting: Uh, but the quantities are just too small still.", "end": 2648.0 }, { "start": 2648.0, "text": "Patrick Hypscher: Yeah.", "end": 2649.0 }, { "start": 2649.0, "text": "Thomas Fetting: So we have the take-back project, and we hadn't actually talked about that yet. I just want to say quickly, it's going well for us. We are very, very pleased. We started in 2022 with 20 tons in the first year. That was, that was, uh, 27 full pallet cages, and that went to 67 tons the year after, 102 tons in '24, and last year 140 tons in 238 full pallet cages that our customers provided to us free of charge. So a pallet cage arrives here every day. Currently, we're back to nearly 100 tons. So we have increases, but As happy as we are about this development and also about the process, the potential is so gigantic. In Germany, about 3.5 million pumps are, uh, uh, needed a year. Of these about 70% they say go into replacement. That means an old pump is removed, a new one is installed. This 70% is then the potential for a take back. A pump we found in that research project back then weighs six kilograms on average. Anyone starting up their calculator now, uh, I can say we are talking about pump scrap in Germany alone of 1,200 tons, and we collected 140 tons a year, which we are happy about, but there is so much out there, and if we ever tap into that potential, and we won't be able to do that alone at Wilo, we need strategic partners for that. Definitely. We have to, or I'd say cooperation with the recycling and recovery industry must be the next step to tap into such things, to then practically keep the raw materials we want in the loop. And ideally, we get as many rare earths out as we need in our production again too. But that's a long way off, and I don't think we can go it alone anymore because we can't handle the quantities, and we don't want to handle them either. Sure, uh, it would be nice, but th-this cradle to cradle pump, it's difficult. But that is of course our, our dream and to build up as much as possible in, in a small loop with our suppliers so that we give them our, our cast iron, our red brass or whatever. So there, there are ideas, there are, there are, there are thought processes, um, and, um, but we always want to talk about things only when we are actually doing them and not... There are many who, who have so many dreams and think about so many things and want to and do, and in the end they do nothing. Uh, uh, we think we'll get the power onto the road first and then, then, then we'll talk about it.", "end": 2816.0 }, { "start": 2816.0, "text": "Patrick Hypscher: Yes. Wonderful, Thomas. And I mean, there's no shortcuts, so you have to start, you have to walk the path. You can't start with 1,000 tons, right? And to then to achieve your dream or your little dream, as you say, it takes, perseverance and determination. You've somehow, Wilo has shown that. You've shown that too. I somehow have no doubt that the volumes will increase, and if there's a way that you'll find it, best of luck with that, and thanks for sharing, Thomas.", "end": 2844.0 }, { "start": 2844.0, "text": "Thomas Fetting: Thanks, Patrick, and see you then.", "end": 2849.0 }, { "start": 2849.0, "text": "Patrick Hypscher: That was the third episode of B2B Take-Back. Thanks to Thomas, who showed us how a take-back system can work when you don't demand anything from those involved, but simply make their lives easier. As always, you can find the summary of this conversation in our newsletter, along with upcoming circular economy events worldwide. I wish you every success on the way to making your circular economy processes profitable. And please don't forget, the greatest renewable resource is your imagination.", "end": 2886.0 }, { "start": 2886.0, "text": "Jingle: My name is Patrick Hypscher, and this is circularity.fm, the podcast about understanding, building, and managing circular business models.", "end": 2911.425 } ]