LOOPED IN with Carl Warkentin

Sorting the Future: Rikke Bech on Scaling Circular Textile Innovation with NewRetex

• Carl Warkentin • Season 1 • Episode 5

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Meet the woman who's revolutionizing how we handle textile waste. Rikke Bech, CEO and founder of NewRetex, joins us from her facility in Denmark to reveal how her company has developed groundbreaking automated sorting technology that's changing the economics of textile recycling.

Five years ago, Rikke saw a gap in the textile industry's approach to waste. While brands were talking about sustainability, the infrastructure to actually recycle clothing effectively didn't exist. Textile sorting remained labor-intensive, imprecise, and unprofitable. Drawing inspiration from the food industry's traceability systems and leveraging advanced technology, she created a solution that sorts post-consumer textiles into 31 different material and color categories with unprecedented precision.

What makes NewRetex truly innovative isn't just the technology—it's their business model. Unlike traditional textile collectors who pay for feedstock and try to profit through resale, NewRetex receives payment from municipalities for their sorting services. They've flipped the economics of textile waste while building a comprehensive data collection system that follows materials from collection through recycling.

We explore the entire process: from initial sorting where approximately 15% of items are directed to reuse, through the automated sorting lines that use near-infrared technology, augmented reality, and RGB scanning to identify materials with incredible accuracy. Rikke explains how their system produces recycled fibers that are being transformed into new yarns and garments, with clear traceability that earned them the distinction of becoming the first sorting company in the world to receive GRS certification.

As Extended Producer Responsibility regulations approach in Europe, NewRetex' scalable technology offers a blueprint for how textile waste can be processed globally. The future of fashion is circular, and companies like NewRetex are building the infrastructure to make it possible.

Check out this fascinating conversation about innovation, sustainability, and how one startup is transforming an industry's approach to waste.

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Carl:

Today's guest is someone who has been at the forefront of reshaping the way we deal with textile waste Long before circular fashion was on everyone's radar. I'm joined by Rikke Bech, ceo and founder of Neoretex, a pioneering textile sorting company based in Denmark. Rikke, welcome to the show and thank you for having me here at your beautiful site in Denmark.

Rikke:

Thank you so much.

Carl:

I'm really happy we have this day together today here at your site. It's been really beautiful to look at everything, really impressive what you've built in only five years. Can you briefly introduce Neuritex and what problem you're trying to solve in the textile industry?

Rikke:

Yes, of course, and of course, welcome to Denmark. It's a pleasure to have you here. Yeah, we are sorting. We have developed a sorting technology to sort textiles so we can actually sort in 31 different kinds of materials and colors and we sort for recycling. But we also collect the data. So we have built a traceability system, but we also collect the data. So we have built a traceability system and then we think that's very important for the future, because I'm actually educated in the textile industry and we have not been using data that much. But it will be a very important part in the future.

Carl:

I've seen a lot. So let's and I'm really excited now that we're able to share this with the community and try to put it out there, what I've learned today Take us through the journey Like you started this five years ago. I think really impressingly how you just said you know I want to do this. Can you maybe take us through the journey, how you came up with the idea Long before you know everyone started talking about automated sorting and how the idea of you know this company came about and what was the biggest challenge? Maybe also in the beginning, when you started.

Rikke:

Yes, I've been working in the textile industry for many years and I always start wondering maybe it's possible to do something with the textiles, because when you have sold a piece of textiles, it has no value anymore. You just put it away like waste. So I started to look into the recycling technologies and I realized that everything that had to be recycled, it also have to be sorted. So I started thinking, oh, I would like to build a sorting plan, but I was also a bit scared actually, because I didn't have any technical background. So, yeah, but I could start. But I did it actually and I couldn't stop thinking about how should we sort and how should we do this, and so on and so on. And we actually make a small team. So we have some people from the textile industry, but we also have some people from the technical team, and then we apply for money from the Danish government to build our first sorting plant, and it was up running into 22, actually.

Carl:

Wow, what a startup mentality. So many people are still sorting manually and run big companies, and a lot of companies, as we know, struggle nowadays with bankruptcy and so on with profitability because they still run their big companies on manual sorting. And there you come, just come up with the idea and just change it within a couple of years. That's a great startup mentality. Let us look a bit into the feedstock that is sorting all about, right, and where do you get your feedstock from and how big is the demand at the moment?

Rikke:

And do you face a lot of competition for what you do? Actually, in Denmark we start collecting textile waste in 33. So we have been collecting textile waste for a pretty long time. So the most textile waste I receive is from the municipalities. They have a tender and we make a bid. So that's the way we do it here in Denmark, and in the beginning I was actually pretty scared because the municipalities were used to to pay, to get paid for the textile waste, and I went out to all the multipolities and tell them I have the best solution in the market, but you have to pay me. So I have to change everything around. But we are lucky and today we have about 20% of the Danish textile waste. We receive it here at Neuritex and sort it for recycling.

Carl:

That is so fascinating for me. The entire industry is paying for textile waste in order to sort it, because most of them make their money with reselling it. Right Like collectors and sorters are a lot of times the same company. So a classic collecting and sorting company would collect somewhere right like there are a lot of bins, at least in europe, on the street. Municipalities collect. You have these take back systems, even at h&m, at least in many parts of europe. You can bring your old textiles into the store but in any case you pay for that feedstock because these collectors and sorters make their money by mostly selling it to to the global south.

Carl:

Just maybe to give some some reference for our listeners, up until a couple of years ago it was around 10 of all collected textiles could could be sold within europe. Another 20, 30 percent had to be incinerated and the rest around 60 could be sold to the global south. And this was the whole business case. And now the resale the things that can be resold within germany or within europe from germany is around like 1 or 2%. It's getting way less because of the lack of quality and because many people use other resale platforms. So the whole business case in the global south. The demand from the global south is way less right Because they get now cheap things, even cheaper than our secondhand products, so they get cheaper from new products from china. So the whole business case falls apart for them, and one of the reasons is because sorting is so expensive. So this is where you come in. But still how impressive that you just managed to get paid to sort for the municipalities and just walk us through this like.

Rikke:

You get paid and then you even can sell the data that you collect or that you gain from the sorting yes, of course the data is a very important part, because then they know how much textile have they delivered, how much textile have we burned. It's very important to mention that we also burn textile waste, because it can be moldy or wet or something wrong, so it's not possible to recycle it or resell it. And then we have the recycling part and we're actually looking pretty much down to all the different kind of materials. If it's 100% cotton in a white color, in a navy color, what kind of possibilities do we have and what kind of footprint will it make? So they get all this data back from the municipalities.

Carl:

That's really impressive, and you focus only on post-consumer waste, or do you also do pre-consumer waste, things that couldn't be sold from brands or other companies?

Rikke:

free consumers but I I think they try to get it sold in some way, if you can say that. But we also of course make take back solution with some companies. If they have a take back solution with the customers or something, we can receive it and and sort it for recycling okay then.

Carl:

Then you do that as a service basically for the company. Yes, company.

Rikke:

Yes, we do it like a service.

Carl:

Okay, wow. And do you face any competition? Because something like this doesn't really exist already, at least as far as I'm concerned.

Rikke:

But what happens then with the other 80% of the Danish textile waste? Unfortunately, I think it ends up maybe in Africa and other places, and we have to avoid that, of course, but it's still the most cheapest way to get rid of your waste, if you can say that. So of course, I don't know exactly what happened with all the textile waste, but I think there's a lot of time ended up the wrong places, if you can say that.

Carl:

Yeah, which is funny, right, Because it comes from municipalities, so like government organizations. So one should think this doesn't happen anymore. But so be it. Let's go a bit through the process. So the garments and I've seen this here today looks really impressive where the big trucks can come and offload the garments. Your sorting process also begins with manual pre-sorting to remove the reusable garments and non-recyclable textiles textiles. What percentage of incoming garments fall into these categories like?

Rikke:

they that has to be either incinerated or can be resold. Today we look into about 15 percent will be for reuse from the waste and then we look into about 30 percent will be burned actually around that um, because yeah, it's wet and moldy and the rest of it will go into the recycling process, where we have developed this sorting line that can look into the material and and colors do you now, where we focus on the whole recycling process, so the also the automized sorting technology?

Carl:

do you mind disruptors like zippers, buttons etc. Or is that something then the recycler later on will take care of?

Rikke:

we remove their zippers and buttons when we before we open the fibers. So it's actually after the sorting process we we work with their the removing process of the fiber and buttons, and then we make the fibers for spinning.

Carl:

And you talk about data and traceability. You analyze one item at a time, and I've seen the picking machines and the sorting line. How scalable is this process to go one by one? And then, what are the capacities of your plant here right now?

Rikke:

For the line you have been seeing today it's 3,500 tons per year, but it's very easy to scale it up because you just put a line next to the line and again and again and it actually doesn't take that much space and one person can run two lines.

Carl:

Okay, wow, so you need very little labor cost and I mean, I've seen it. It's a very nice modular system that you can just add on more, more lines. Also interesting and impressive that you have 31 different fractions that you sort into. Can you walk us through what are the most important ones and then what categories you know are most in demand, and and also, is there a big range in the price that you can sell it for?

Rikke:

today, um 100 cotton is the most um important of them and it's white cotton actually. Um, because it's easier's easier to work with the white cotton, because then you can maybe color after that. And then we also have the navy blue is a high runner and the gray colors. So some of the colors is actually very interesting for the market. But we're also working with cotton polyester mixes because when we work with them on mechanical recycling the polyester have longer fibers, so the quality of yarn is quite high when we work with that part.

Carl:

Let us go a bit through your business model. So I've seen here this plant. Can we call it a demo plant? I mean, it's already like operational and even profitable, right, yes, as it is. So it's already a quite impressive plant, or first of a kind. And what is your business plan like? Do you want to become a big sorting company that sorts itself, or is this here just a demonstration for other companies waste management companies to buy machines from you? Do you want to co-develop these things or run sorting as a service? What? What do you have in mind?

Rikke:

um, denmark quite a small country actually. So I see Denmark like our showcase, if you could say that, because it's easy to run the sorting here every day and you can come and see how we do it, what you need if you want to run a sorting line in other places, and all this. And then we have the business model that we sell the sorting line, so you can actually just buy a sorting line and run it yourself. But we also look into partnerships where you can, of course, buy the sorting line. We can run it. That can be different kind of partnerships. I think one of the most important things is that we have been working a lot with a value chain. So of course, you can buy a sorting line, but you can also tap into the system after. Where should we work with the fibers? How should we make the yarns? Where do we have all the partners where we can tap into that used to work with the recycling fibers and yarns?

Carl:

You have also developed your own yarns right that contain post-consumer waste. Yes, and I was holding a t-shirt made out of your yarn in my hands. Is it 100% material, or do you blend it with virgin material? And do you do this yourself, or do you work with with virgin material and then do you work? Do you do this yourself or do you do you work with suppliers?

Rikke:

we, we work with suppliers, um, and mostly in europe, because we didn't have um spinning mills in denmark anymore, so in most southern europe, um, it can. A t-shirt like you hold is about 25% post-consumer fibers. We have made some with 100% post-consumer fibers, but the quality is not good enough to put on the market, so a lot of times it will be between 20% or 40% post-consumer fibers in the product.

Carl:

Okay, and that quality really feels well, so you already sell this yarn to brands.

Rikke:

Yes, the one we have seen today is actually a Danish workwear brand called ID Identity and they have it in their program all the time. It's a stock t-shirt and we also work with more fashion brands on other kind of projects.

Carl:

yeah, you mentioned before, you mean so far. You're focusing on the danish market. On our drive here, we talked about the beautiful countryside of denmark, which I'm really impressed by, and we also talked about the beautiful countryside of Denmark, which I'm really impressed by, and we also talked about the mentality, and you've mentioned Denmark, or you guys see yourself as a little bit like the California of Europe and it feels like that. To be honest, there's a certain energy and innovation in here. But you also mentioned Denmark is a small country, so obviously you look to expand, most likely within Europe. Do you have any countries in mind that you're mostly focusing on, and what role does an EPR scheme, like the political environment, the regulatory play for you?

Rikke:

Of course, it's easy for us to go to Scandinavian countries like Sweden, finland and so on, but of course, germany, because it's next to us, so it makes sense and I think we used to work with each other for many years, so Germany is also a very important country for us. You could go to Hamburg. There is the same amount of people like in the in whole denmark. So, um, yeah, so so we are looking at other countries here in europe.

Carl:

It's very important for us let us talk a little bit about traceability and maybe you can share what we talked about before with your colleague when we went through the production line and the sorting line we talked about from what other industry you got inspired? Because I was so impressed with what you've built and have been to waste management companies and none of them had as sophisticated technology behind the sorting process, if they even at all had any kind of automized sorting, maybe a small, you know, pilot idea planned to figure certain things out, to make first steps, but nothing as sophisticated as you did. So I was very impressed and I asked you if any one of your team members already worked in the industry and nobody really did, in sorting technology at least. But what industry were you inspired by?

Rikke:

Yeah, we were inspired by the food industry actually. So in the beginning because I've been working in the textile industry I was thinking, oh, this is a bit overkill with all the data and traceability system. But today it's very important for us to trace everything. So we built the system like if we are producing food actually and we can see now it makes sense because we're looking into the product passport and we think that actually we start the process with their material input and when we have the data from here and the traceability from here, we can start to put data into the product passport for textiles.

Carl:

Yeah, and I'm so impressed with that because everybody's talking about a digital product passport and what it means for new clothes that are coming onto the market, right, which is true but then, really interestingly, that you will be able actually to, for all the garments that go into recycling or resale, that you give a new life, that you basically actually feed the digital product passport with more information. I find that really interesting. But let's stay at this whole traceability. I think data is such an important part and how you manage this here is really incredible. So traceability is one think data is such an important part and how you manage this here is really incredible. So traceability is one of your core elements. How do you ensure can you take us through, even though now we're not anymore at the site and stand next to the machines how, like from the first moment until the last, that you can literally track all the data, what happens with each single piece of each single supplier that you get feedstock from and share that data like? Can you walk us through the whole process?

Rikke:

yes, of course we receive textile waste from multipolity and they put their textile waste on a very big conveyor and then we start the registration. We can see it's a Danish municipality and it delivers 5.5 tons textile at this date. And then we put it through our company in the whole process in one batch, if you can say that, so we all the time know what happens. Actually, we collect data in the whole process and it make a report back to the municipalities so they have all the data for what they have delivered. So the first step after they have put it in the big gunware is a manual sorting. And it's because we should follow the waste hierarchy here in Denmark. So we have to sort for reuse before we recycle, so we remove the reusable textiles and of course we also remove the bicycle or the chair.

Carl:

You would be wondering what all ends up in textile waste.

Rikke:

Yeah, there's a lot of crazy things sometimes and we actually collect that data as well. So the municipalities know how many bicycles have been there or what it can be, the multipolities know how many bicycles have been there or what it can be, and after then it go into the, the, our sorting line, and it collects every piece of textiles. So we exactly know how much there will be a hundred percent cotton or cotton, polyester mix or wool and so on and so on. But it also um collects the amount of it so is. So we know exactly how much that's coming through the whole process, from the input to the output. We can actually trace it to the fiber and to the yarn as well. So we have a grs certification today. Like the, we're the first sorting company in in in the world actually. So I I like to say we are really good at traceability.

Carl:

But you know, sometimes it's better when a third part say it as well it's uh, impressive how, how humble and modest you guys are here, because, yeah, you really are the first ones in the world.

Carl:

One should really highlight that. So I mean, you get, luckily, you get paid to sort for municipalities or any kind of feedstock providers and you kind of do that as a service, right, but from that moment on it's your garment. So you get paid when the garment comes in, but then you also own the garment and you get paid when you sell it afterwards as well. Nevertheless, it must be also interesting for your own business case to analyze, like, from which municipality, from which feedstock provider do I get better or worse garments Could be really interesting. Also, data to differentiate, especially at a later stage, when all of your plans that you will be building with your customers, together with all the waste management companies, and you collect that data right, Like, can you share a bit about generally, like how that data is important for your business case, and then after maybe let's talk about your platform.

Rikke:

It's very important to know what kind of waste there is actually, because or else we don't know what to do with it. If you can say that we can look into, maybe it's a good idea to recycle cotton, but if less than one percent is cotton, it doesn't make sense. So it's very important to look into what kind of big amounts of waste textile waste there's actually are there and start looking into what kind of business can we make there, is it possible to recycle it and how much will it cost to recycle. If you can say that, because the textile industry have been used to work with prices. They are really good at low prices, if you can say that. So the price is always an issue when you work with the textile industry. So we have to look into what kind of waste there is and how we can recycle it to make the best prices.

Carl:

Understood. And let's, before I ask the next question about the pricing, let's still stay at the data part. We talked about digital product passport. A lot of people said a couple of years ago we can't automize sorting because we we can only do it once we have a digital product passport. Then we know exactly which product we are getting and then we can sort it accordingly. You clearly showcased that you can do a fully automized sorting without a digital product passport. So now you even said you feed the digital product passport in the future. But can you actually also in the future is is it still helpful for you that there will be a digital product passport on products, like on any part of the this process?

Rikke:

no, not really I think, but maybe it will be helpful for other consumers yeah, maybe for for the resale part.

Carl:

Yeah, I was running a project in the re-commerce space where product identification is really important, like really the exact item, product, what is it made of, when was it made, and so on. That then it really becomes important in order to maybe not having to take a picture of an old garment and put it back online on a resale platform, but actually that it with one scan you have all the product information and the data and the pictures and that makes them maybe more efficient and and uh, scalable and profitable for e-commerce. Um, but, yeah, clearly not for you. Like we talked also before about resale and around what was it? 50 of the garments go into resale, um and um. Do you also? Because at other companies I've seen, the first thing that happens is that the sorter sorts manually into the different kind of products like shoes and pants and t-shirts. Do you do that yourself as well here, or do you just sort what can be, in general, resold and then you give it to someone else?

Rikke:

we just we put shoes for themselves, but the textile we put in in one bag, if you can say that. So we don't make the detailed sorting here, because the labor is quite high, labor cost is quite high, but we are of course, looking at the quality of their textiles. Is this sweatshirt okay? Is this dress okay? We? It had to have a quite high level of quality before we send it to reuse. Us. Yeah, reuse, yes, and we can say that after when we sawed in the 31 different kind of categories, it look into the colors, it look into the materials and then we, mostly today, work with a mechanical recycling because we're still waiting for the chemical recyclers to get up in scale, but we are testing with most of of them you just mentioned chemical recycling, something that still needs to be scaled up, but something that I think will be scaled up.

Carl:

I I even recorded already two sessions with recycling companies, both of them who can recycle cotton and polyester at the same time. Then there are these big players now with Sire, powered by H&M and others, who only focus on polyester because apparently there's a lot of money to be made in the polyester market. I was surprised when you guys before said like right now, polyester itself is not as valuable as pure cotton not yet, but I think it will come in a future, maybe in two years or something like that okay, yeah, let's be hopeful for that.

Carl:

I I talked a little bit to the industry and I was actually asked to ask you certain questions. So so what I've not done before, but I'm happy to do it now and I'm happy to do it in the future, because we have real questions from companies that potentially want to work with you that have certain questions. I have some short questions. Some of them we already answered, but maybe let's just go through them, or a couple of them, and I'm excited for you to answer them. What sorting technologies are being used, and were they developed in-house?

Rikke:

we are using near infrared technology, we are using ar and we are using rgb and this is the most important and we have made the. Of course we buy the new sensor, but all the software programming we have made in house ourselves. We also have two kind of robots to pick the textiles. We haven't developed it ourselves, but we have sub suppliers that we work very close with on that part.

Carl:

All right, and nobody can also just purchase them, because it's all about the software, right.

Rikke:

The software is very important.

Carl:

The brain behind the body, so to say.

Rikke:

That's a lot of. In the beginning I think this is a piece of case, but that's thousands of hours of programming.

Carl:

And you mentioned before you patented most of your technology.

Rikke:

Yes, we have patented it.

Carl:

Okay, brilliant. What are the capacities of the system and are they scalable and, if so, up to which size?

Rikke:

And if so, up to which size? If we have only one line, the capacity is 3,500 tons per year. It's very easy to put a line next to the line and a line next to, so you can easily scale up. One person can run two lines and when the lines are running, they are using a really low amount of energy, because we are building the lines with small conveyors, so we don't use air, and air is making a lot of noise and it dusts in the room and it actually uses a lot of noise and it dust in the room and it actually use a lot of energy as well, but because we are building with small conveyors, we didn't use a lot of energy. There's no noise and there's no dust in the room and I I could witness it.

Carl:

It was very clean and not at all noisy. Very, very beautiful to see. Another question from the industry is what does the pre-sorting process for the systems need to look like? We already talked a little bit about it, and are there any certain limitations when it comes to the size products?

Rikke:

Today it's not actually right to say that we can't recycle multi-layers, but the price for recycling multi-layers will be so expensive that there's not anyone in the industry that are willing to pay for it. So, of the time, if it's not a for for reuse, the multi-layer is gonna be burned excellent what categories and combinations can be sorted.

Carl:

and I asked that because when I was asked that question, one of the concerns was like wow, is it really needed to sort into 31 fractions? Isn't there like three, four fractions that are most important and let's deal just with that? Yeah, can you share this a bit?

Rikke:

Of course it's when we are working with the fibers. After then it makes sense to have if we work with 100% cotton, it makes sense to have that in colors. So you have the white, the blue, the red, the orange and so on and so on, and then you don't have to color the fibers again, so you can save energy, of course, but you can also save water and chemicals, and you look into working with the fibers in in colors as well. So therefore we have 31 different kind of fractions. Actually, I will.

Carl:

I would like to have more I mean the market will grow, I'm sure, and there will be the opportunities for more. Let's stay in that. What does the sales market for these categories look like?

Rikke:

Today we can see the white cotton is a high water. So I think something is going on in the market right now, which means there are companies that are buying up to be ready for the registration from Europe. So most of the time we out of stock for the white 100% cotton. There is also other kind of colors of 100% cotton. There's a high runner and then the 60% cotton and 40% polyester is also one of the high runners in light colors, in white colors.

Carl:

And who are your customers? Like what kind of companies purchase you?

Rikke:

In the beginning I was going out to the textile industry and I said, hey, I have the best product at the market. But it was actually quite difficult because the textile industry don't know their own value chain anymore. So sometimes we work with the textile brands, but we also work with a value chain at the same time. So the customers can be the tech librarians, but it can also be a spinner.

Carl:

Yeah. What is Neuritex's business model Like? How do you intend to position yourself in the market as a technology provider, as an operator, service provider?

Rikke:

We want to be a technology provider. We want to sell our technology. We think that it will make the biggest impact at the market. So what we are looking into is to be the best to sort and the best for the traceability and the data. So sorting is very, very important for us to make the most precise sorting.

Carl:

And last question for today from the industry Are you open for collaborations?

Rikke:

Yes, of course. I think the most important thing is partnerships to make things happen.

Carl:

Amen to that. I couldn't agree more. Before we close, I would love to pick your brain on how you see the future of the textile industry, like the post-consumer textile waste industry. How do you see this developing in the next years?

Rikke:

also, of course, probably covered in your business model in the future I think we're gonna see the next year is still a quite um how should I say it? Relaxed year. A lot of things will go on, but not fast enough. But then I think 26 it was gonna really really fast, both for the sorting part, of course, but also for the recycling and how we are seeing product at the market with recycled yarns and fibers in.

Carl:

How important is the regulatory side with all the EPR schemes coming up?

Rikke:

It's really important is the regulatory side, with all the EPR schemes coming up. It's really important, so important, because normally the textile industry is used to buy textiles and it's a price issue. Every time the prices should be lower and lower, because then they can make a bigger profit, if you can say that. And of course, in the beginning the recycling fibers will be more expensive, but we still work with small amounts and we still work with totally new technologies. So the registration from Europe is really really important and we can see that we can feel the market is changing right now actually because of that.

Carl:

And that's a beautiful development and opportunity, even though it obviously could go faster. The final question I have for you like what is your not just thinking of you and your company in the stage where you're in right now? What are your biggest challenges for this year and what are you most excited about?

Rikke:

I think one of the biggest challenges because we're still a startup, we have been running in the lines for a bit more than three years is the financial part. It's also always difficult when you start a new company, but then it's also to close the circle. It's so important that we have the right partner and we have to build more partnerships to close the circle. It's really, really important.

Carl:

Rikke, thank you so much for your time. Thank you so much for hosting me today. Really excited to be here and I'm very excited to monitor your success in the future. Thank you so much.

Rikke:

Thank you.