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Eye on the future economy

Released at: 08:22, 09/12/2019

Eye on the future economy

Photo: VET Magazine

Foreign enterprises have been keen to move towards a circular economy as part of sustainability efforts.

by Khanh Chi

Soda giant Coca-Cola Vietnam launched a program between September and November to remove plastic bottle tops from its 350ml, 500ml, and 1.5 liter Dasani water bottles and will continue its strategy to reduce plastics by using 100-per-cent recycled plastic (rPET) for the 500ml bottles from the beginning of next year. Another mineral water producer, La Vie Vietnam (a member of Nestlé Waters), also announced it had ceased using plastic cap seals on its mineral water bottles at the end of August.

Such actions, which count among a raft of activities by foreign businesses in Vietnam recently, represents firm commitments to responsible long-term plastic waste management and the use of recyclable packaging materials. Responding to the government’s call to reduce plastic waste, many manufacturers in Vietnam, especially foreign-invested enterprises (FIEs), have actively implemented innovative programs and solutions on protecting the environment, promoting sustainable development, and looking towards a circular economy. 

Projects underway

Together with seven other companies in the consumer goods and packaging industry, Coca-Cola and La Vie joined hands to form a new recycling initiative called the Packaging Recycling Organization Vietnam (PRO Vietnam) last June, to promote a circular economy and make recycling and packaging more accessible and sustainable. Ending the use of plastic bottle tops and seals is part of La Vie’s drive towards a future without trash. The company commits to having all of its packaging recyclable or reusable by 2025, in line with its broader vision that none of its packaging, including plastics, ends up in landfill or as litter.

rPET plastic will be used for 390ml bottles in Coca-Cola’s soda range in Hanoi from May, with such actions confirming its long-term commitment in Vietnam regarding plastic waste management and being part of its global strategy called “World Without Waste”, with the goal that, by 2025, 100 per cent of its packaging will be fully recyclable and by 2030 its bottles and cans will contain an average of 50 per cent recycled material. 

The company is making efforts to ensure that product safety and availability are balanced with sustainable packaging collection and recycling. Moreover, Coca-Cola’s sustainability strategy in Vietnam has been set forth in both the business and social realms. In the former, it aims to become a total beverage company by offering customers more innovative and diversified beverages, emphasizing its strategy of product innovation with the development of the smart factory model. In the latter, the company has implemented various programs focusing on the four priorities of Water, Women, Well-Being, and Plastic Waste Management.

As a member of PRO Vietnam, Filipino food and beverage producer URC Vietnam has expressed its ambitions by pledging that, by 2030, all packaging by participating members of PRO Vietnam for sale on the market will be collected and recycled. A series of initiatives have been applied in Vietnam regarding production, to optimize material usage. URC factories with high levels of water use have a reverse-osmosis system and reuses water from the system to optimize water input and limit wastewater discharge.

Meanwhile, Nestlé Vietnam has also been active in vigorously shifting from a linear production model to a circular economy. Not only demonstrating its responsibility to the environment and the community from the stage of raw material exploitation, Nestlé Vietnam also strives to protect nature during and after production. With no factories discharging solid waste into the environment, the company is fully utilizing the circular economy model.

Ultimate goals

Another example of the push towards sustainable development can be seen at Schneider Electric (SE) Vietnam. Sustainable development has been one of the key strategies over its 25 years of operations in Vietnam. SE globally is committed to accomplishing the 17 UN Sustainable Development Goals by addressing the five sustainability megatrends - Climate, Circular Economy, Ethics, Health & Equity, and Development - through its core businesses and solutions. 

SE Vietnam applies SE’s heritage of digital transformation in energy management and automation to help businesses in Vietnam manage energy efficiently and then develop sustainably. “We are constantly trying to be innovative in technology to achieve the transition to a net zero carbon economy by cutting CO2 emissions and saving electricity and consumption costs, for the green and sustainable development of our customers in Vietnam,” said Mr. Yoon Young Kim, Country President of SE Vietnam, Myanmar, and Cambodia.

Sustainable development means development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It is now not only the ideal vision but virtually a compulsory mission of all businesses. “If a company wants long-lasting development, it must think about sustainability in management and operations, especially in energy management, because this relates directly to the cost of business and is an increasing trend in the context of Industry 4.0,” Mr. Yoon added. “A circular economy can only be successful if every company is aware of building sustainable operations and management systems from the initial stages.”

The circular economy model aims to drive efficiency in maintenance, repair, remanufacturing, and recycling resources to obtain sustainable development. Concentration on the model is to cut natural resources use, waste disposed of in landfills, and greenhouse gases emitted into the atmosphere. Enterprises will introduce innovation into existing products to meet the standards of the model, which will result in a new vision with more consistency in operations.

For example, by changing the components and technology of a product to makes it friendly on the environment and reusable or recyclable, SE can reduce the cost incurred from additional polluting materials. It will be more innovative in applying smart technology in its products and solutions so it meets the increasing demand of customers, partners, and the economy.

For international companies, according to Mr. Ganesan Ampalavanar, CEO of Nestlé Vietnam, creating common values is part of the sustainable development process based on vision, mission, and growth strategy, and that commitment is closely linked to production and business activities. “We see the creation of shared values as a long-term investment in sustainable development and future success,” he said. “The government and other stakeholders should develop an ecosystem to facilitate collecting and recycling waste. We are willing to share initiatives and experience to lend a helping hand in the country’s campaign in environmental protection.” 

Better efforts needed

Vietnam is an attractive investment destination with strong economic growth, a dynamic population, positive government initiatives, and rising foreign investment. Many multi-national corporations have arrived in the country and contribute to economic growth. The flipside, however, is that rapid growth may well lead to unsustainable development in terms of the environment, resources, energy, and even people’s health.

The country is one of five with the highest levels of plastic waste pollution in Asia, as the traditional linear economy allows manufacturers to take natural resources to make products and services and production and consumption then end up in landfill or natural ecosystems such as the ocean. 

A circular economy is clearly a sustainable alternative, where manufacturers keep resources in use for as long as possible, extracting the maximum value from them while in use, and then recovering and regenerating products and materials at the end of each service life. Applying circular economy practices helps to minimize waste, drives greater resource productivity, addresses resource security and scarcity issues, and supports a more competitive economy.

Many obstacles in terms of infrastructure, human resources, and investment costs, meanwhile, have been hindering the efforts of enterprises in Vietnam to boost the circular economy. Outdated infrastructure will lead to disruption in mass application, according to Mr. Yoon from SE. He also acknowledged that the company still lacks the qualified workers needed to operate and guide its digital platform, EcoStruxure. Other companies can’t afford the high initial investment for the transformation in technology and infrastructure needed to develop sustainably.

Moreover, even leading businesses in Vietnam face challenges in expanding the circular economy model. “Our greatest issue is regarding ineffective and inappropriate systems for waste treatment, partly due to a lack of recycling facilities in Vietnam,” said Ms. Le Tu Cam Ly, Public Affairs, Communications, and Sustainability Director at Coca-Cola Indochina. “If recycling activities are not carried out thoroughly, used packaging will become wasted resources.”

To resolve the issue, she suggested the government develop specific policies and incentives to encourage companies to invest more in technologies that support the manufacturing of eco-friendly packaging. “Our goal is to continue supporting and facilitating the implementation of the circular economy in Vietnam across its value chain, including interactions with consumers to increase public awareness and establishing new socially responsible waste management practices,” she added.

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