Business-like responsibility in a green and circular way
The ideas intrinsic to sustainable development, extended producer responsibility (EPR), and the circular economy directly affect organisational triple bottom line accountability.
The trick lies in juggling public accountability and the ideals of a greener economy with having the resources available to provide the goods and services needed in a country where there are still major challenges of poverty, job security and limited resources.
One example of how these ideas converge in a practical business approach along the entire value chain is the way in which the polyethylene terephthalate (PET) industry in South Africa has responded with a coherent EPR strategy. A decade ago they created the PET Recycling Company (PETCO) as national industry body responsible for growing the collection and recycling of post-consumer used PET bottles and turning those into recycled PET (rPET) for the manufacture new products. This is more than ‘merely’ recycling, because it puts into practice the concepts of closing the loop, or cradle to cradle manufacturing, which are by their very nature circular and link the output of a process with the input of that process. Essentially, items of a specific material are turned into new products of the same kind i.e. bottles into new bottles.
A circular economy with its intentional, planned use and re-use of resources in such a way that there is no (or limited) material loss, requires integrated thinking and action – from design, through manufacturing, logistics, marketing and post-consumer recycling. To return to the PET example: with its activities funded by a voluntary recycling levy paid by industry, PETCO contracts and finances PET recyclers who collect bottles and process them into rPET for the manufacture of new products such as polyester staple fibre and filament and resin for use in packaging and even new bottles.
The PET industry has been closing the loop since 2009, recycling PET into both food grade and non-food grade PET for use in sandwich cartons, juice bottles and washing-up liquids. However, most of South Africa’s future end-use market growth will be in the Bottle-to-Bottle (B2B) market, with significant investments by members of the industry to install world-class facilities. Extrupet have expanded their Phoenix plant to incorporate the first Coca-Cola approved B2B technology in Africa.
The new facility will supply an additional 14 000 tonnes of PET resin per year to the PET packaging industry and divert an additional 22 000 tonnes of post-consumer PET bottles per annum from landfills. Likewise, Mpact Polymer’s B2B plant is due to come into production towards the end of 2015 and process about 29 000 tonnes of PET plastic bottles a year, generating 21 000 tons of new raw material. Combined, these plants will save about 76 500 tonnes of carbon and 316 200 cubic metres of landfill space and prevent approximately 1.6 billion bottles going to landfill.
First for Africa
These facilities are significant on a continent-wide basis. PETCO Chairman and Franchise Technical Director of Coca-Cola South Africa, Casper Durandt, expressed his delight that that South-Africa will be the first African country to use recycled PET back into new bottles for carbonated soft drinks and turn the B2B approach into reality: ‘The recycling of plastic bottles improves our carbon footprint, and prevents senseless landfilling of a valuable resource such as PET.’
Bruce Strong, CEO of Mpact Polymers, adds that the entry into plastic recycling is an exciting opportunity for them and that it will ‘add an important dimension to our business. It is an excellent fit with our strategy and will enhance our position as a leading beneficiator of recyclables in South Africa.’
Beverage packaging users and producers have probably been one of the longest proponents of circular thinking for their products and processes. Starting with the introduction of refillable bottles 120 years ago, lightweighting, and introducing recyclable bottles and those that contain recycled material nowadays.
PETCO’s CEO Cheri Scholtz also believes the local value chain may be rightly proud of closing the manufacturing loop in this significant market. She points out that recycling rates grew from 16% in 2005 to 49% in 2014, with the milestone rate of 50% likely to be reached this year, and an ambitious target set of 70% by 2022. In terms of international standards, South Africa is catching up to Europe (which is currently nearing 60%), and is ahead of the USA, (which was at 31% in 2013).
The reduced resource consumption by the local PET industry saved 96 771 tonnes of carbon and 400 000 m of landfill space during the past decade. PETCO’s contracted partners who collect and purchase post-consumer PET on a nationwide basis are Extrupet, FTE Production, Kaytech, Mpact Polymers, Propet, SAFrePET, and Sen Li Da. In 2014 R250m was paid to collectors, and they generated R527m of value back into the economy.
Very important is the way in which the EPR of the PET industry contributes to poverty alleviation and job creation: with 31 collection project partners across nine provinces, PETCO’s activities help to sustain 1191 permanent jobs, while providing around 44 000 sustainable income opportunities through bottle collection.
It is encouraging seeing such an example of the circular economic philosophy successfully at work and striving to do even better.