SSA pulls out of RFID centre venture

Major reasons are high cost of RFID tags and lack of interest among potential users

SSA Global has retreated from its plan for a “centre of excellence” in radio-frequency identification (RFID), to be located in Hamilton.

A major reason, according to regional solutions manager Trevor Barrows, is the continuing high cost of RFID tags on individual packages and hence a general lack of interest among potential users.

He also blames the lack of a uniform standard for “active” tags — those whose information can be changed by a radio signal, as distinct from the passive tags which simply give out static information on being scanned.

“Customers won’t get a return on investment until tags [on individual packets] come down to less than 10 cents and the reliability goes up,” he says. This means it’s not worth proceeding with the contemplated centre. This was to have been a joint venture with Innovation Waikato, a non-profit organisation funded by Industry New Zealand, Hamilton City Council, WEL Energy Trust, Trust Waikato and Hamilton’s economic development agency, B2H.

The comparatively high price of tags is exacerbated by a low yield of reliable tags in the manufacturing process, where as many as 14% are unreliable and have to be discarded.

Tags on pallets and “roll cages” (trolleys) containing a number of individual packages are economical, Barrows says. And some supermarkets roll a cage directly into the aisle and load shelves from it, shortening the supply chai. So potential savings are almost there, But like any business, SSA Global made a decision that the figures justifying the planned centre didn’t stack up, Barrows says.

The company is staying in touch with Innovaton Waikato, he says, in the hope of starting the venture some day.

Innovation Waikato CEO Derek Fairweather says Barrows’ evaluation comes from the point of view of a company chiefly interested in “off-farm” applications.

“The strongest application is in animals, and there we’re making huge efforts with tagging of sheep, cattle and deer.” Partners in the project include tag-maker Allflex, the Livestock Improvement Authority and a number of meat and dairy-related companies. It’s too early to flag away the idea of the centre of excellence completely, Fairweather says.

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