PN China Blog - English: Sustainability Archives

China's bag ban enforcement challenged

A PhD student in Beijing is challenging the government's enforcement of the nationwide ban of free shopping carrier bags and ultrathin bags, joined by non-government organizations that have been tracking bag usage.

Mao Da, studying environmental history at the Beijing Normal University, has been trying to have the Administration of Industry and Commerce officials publish the detailed results of the "Bag ban enforcement survey." He also inquired about the penalties received by a supermarket, which was reportedly busted for giving out ultrathin bags.

While China's administrative regulations require a response to a public inquiry within 15 business days, Mao submitted his inquiry on Sept. 22, and had not received any feedback by Nov. 10, according to the China Economic Times.

Mao is part of Action for Plastic Bags Policy (http://napbp.blog.sohu.com), a Beijing-based NGO with members from China, Japan and Sweden. Their research shows that the bag ban is implemented in 94 percent of the department stores and supermarkets, 35 percent of the smaller retail outlets and just 29 percent in farmers' markets.

Another organization, International Food Packaging Association, suggested that eight government agencies are overseeing the enforcement of the bag ban, making it less clear and less efficient. General Secretary Dong Jinshi told local media, "Some law enforcement officials are unclear about the regulations." He said, "I'm afraid the ban is not working at all in some regions [outside Beijing]."

Posted by Nina Ying Sun on November 11, 2009 6:41 PM | Permalink | Comments (0)

Bioplastic firms attract investment

One of China's leading manufacturers of bioplastic products, Wuhan Huali Environment Protection Science Technology Co. Ltd., has received US$13.5 million of venture capital funding from DT Capital Partners.

At last week's signing ceremony, Huali Chairman Zhang Xianbing projected 2009 sales to reach 120 million yuan (US$17.6 million), according to the company's Web site.

The 9-year-old company in Wuhan, Hubei province, touts its annual capacity of 40,000 metric tons of biodegradable plastarch materials (PSM), which meet international standards such as EN 13432 and ASTM D6400. Its product portfolio also includes finished products and processing equipment.

Huali said it exports PSM materials and packaging products to more than thirty countries. Sales have been growing at a compound growth rate of 50 percent and higher in the past few years.

Shanghai-based DT Capital, which manages more than US$500 million in US dollar and RMB funds, said China has a greater need to develop biodegradable plastics than developed markets.

"It's difficult to predict the payback period," managing director Zhao Jun said, "but the market prospects are looking good. Huali is the leader of the industry."

Previous news reports show that Huali posted 86 million yuan (US$12.6 million) in 2008 sales and 17 million yuan (US$ 2.5 million) in net profit.

Huali's first experience with venture capital investment dates back three years, when it received $US$5 million from a Hong Kong-based firm.

Huali is not the only bioplastic firm that's gaining popularity from the investment community. According to the 21 Century Business Herald, last year, Tianjin Green BioScience Co. Ltd. received US$20 million from investors including DSM. Also, Shenzhen Ecomann Biotechnology Co. Ltd. obtained investment from Shenzhen Capital Group Co. Ltd.

A trade group official said at an industry conference that among the 200-plus bioplastic companies in China, only 20 percent make profits. "Most of them are still in the early stage of investment," Weng Yunxuan of the China Plastics Processing Industry Association was quoted as saying in news reports.

Posted by Nina Ying Sun on November 24, 2009 11:52 AM | Permalink | Comments (2)

Hangzhou mulls reduction of disposable products

A popular tourism destination near Shanghai is discussing ways to encourage hotels and restaurants to cut back on disposable supplies, including toiletry items.

Personally, I don't mind if they cut back on one-time-use plastic combs or toothbrushes, but there's one item I hope they don't take away.

Hangzhou, the capital of Zhejiang province, is famous for the West Lake and other natural scenery. Local tourism bureau officials said this week that hotels could use incentives like complimentary breakfasts or souvenirs to make up for the reduction on disposable supplies, according to local newspapers.

This one item that I actually use and hope to continue to use is disposable slippers, something I've never seen in America. From US$20 a night inns to five-star global chain hotels, all hotels in China offer disposable slippers, made of materials ranging from paper-thin plastic nonwoven fabric to cushioned terry cotton.

I understand why hotels in America provide, say, coffee makers, while the Chinese hotels don't. But is the need for disposable slippers a cultural or regional matter?

Back to the main subject, the hotels could probably start the green initiative by having customers request specific disposable items that they need, still free of charge, when they make reservations or check in. It may be some extra work for both the customer and the hotel, but still worthwhile for the sake of eco-friendliness.

Posted by Nina Ying Sun on December 8, 2009 3:34 PM | Permalink | Comments (0)

Chinese bank launches biodegradable credit cards

China's Shenzhen Development Bank has launched two sets of biodegradable credit cards, which are said to be able to break down to water and carbon dioxide. The bank said one of the green-themed sets comes with paperless statements only, another way to protect the environment.

It's unclear what specific material(s) the cards are made of. But the bank started issuing the first set of four "Beauty Cards" in November, targeting environmentally conscious female consumers.

The second set of four "Green Cards" made a debut in Beijing this week. These cards use electronic statements exclusively, the bank said on its Web site. Users can choose to receive an email newsletter on environmental protection from the bank. They also have the option to redeem membership points for "green products."

According to a report from the Xinhua News Agency, China had issued 170 million credit cards by the end of 2008.

By using the images on the bank's Web site, I compiled this low-resolution photo, just to give you an idea how the collection of "Green Cards" looks. (Yes, these are vertical cards.)

Posted by Nina Ying Sun on December 11, 2009 3:42 PM | Permalink | Comments (2)

Sichuan recycling plastic temporary homes

625,000 is the number of plastics makeshift housing units that were built in Sichuan province after the magnitude 8.0 earthquake in 2008. As reconstruction progresses, these plastic structures have fulfilled their duties and are being taken down.

It costs 260 yuan (US$38.1) to dissemble a 20-square-meter (215.3-square-foot) unit and another 400 yuan (US$58.6) to reassemble it elsewhere, plus transport expenses, local authorities were quoted as saying in a report by the Chengdu Business Newspaper. It's also costly to warehouse and manage the unneeded ones. Therefore, it makes good sense to recycle the plastic homes.

Philanthropist Chen Guangbiao, who runs a recycling business -- Huangpu Group - in Jiangsu province, recently announced in Mianyang city that he has invested 30 million yuan (US$4.4 million) and put in place 20 mobile recycling stations, which combined can process 5,000 plastic housing units every day. Chen said the recycling service is free of charge.

Posted by Nina Ying Sun on January 4, 2010 4:06 PM | Permalink | Comments (1)

Realities facing the housewares industry

Here is my quiz of the day for you: do U.S. households spend the most on A. housewares, B. dairy products, or C. fruits and vegetables?

The answer, according to the International Housewares Association (IHA), is that U.S. households spent more on housewares than on dairy products, and just slightly less than on fruits and vegetables.

In its fresh-off-the-press State of the Industry report, IHA said the average U.S. household spent $609 on housewares in 2008.

Based on data from its annual membership survey and government stats, IHA gave some good insights that may help U.S. manufacturers to better position themselves:

• More than half (58 percent) of IHA member companies produce all their products offshore. Another third (34 percent) make some products in the U.S.
• Virtual retailers distributed 13 percent of the 2008 housewares sales, which was slightly down from 2007, but gains were seen from manufacturers' direct-to-consumer Web sites.
• Housewares manufacturers may need to follow their audiences closely as they "migrate from the traditional print media to online options."
• Consumers are becoming thriftier and more price-sensitive for the immediate future.

I look forward to covering this year's International Housewares Show, scheduled for March 13-16 at Chicago's McCormick Place, with my colleague Rhoda Miel. Our past coverage focused on latest global business and design trends, Made-in-USA products, sustainability, and so on.

Moreover, we plan to do some video reporting at this year's show. We welcome news leads and ideas.

Posted by Nina Ying Sun on February 11, 2010 3:10 PM | Permalink | Comments (0)

Sichuan firm expands export to ASEAN

A bio-plastic manufacturer in Chengdu, Sichuan province, is ready to take advantage of the China-ASEAN (the Association of Southeast Asian Nations) free trade agreement and increase its export of bio-resin film.

Ye wenbin, general manager of Sichuan Corn-T Biology Technology Co. Ltd., has come up with a business plan to export PLA film to ASEAN countries, where the film is processed into bags and then exported to Europe.

Under the free trade agreement, which started on Jan. 1, China and the six richest ASEAN members -- Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand -- eliminated tariffs and barriers to investment on more than 90 percent of the products traded between China and ASEAN, or more than 7,000 products. The zero-tariff status is expected to extend to the four new ASEAN members -- Cambodia, Laos, Myanmar and Vietnam -- by 2015.

Thanks to the zero-tariff, Ye told the Western China Metropolis Daily, orders from Singapore, Thai and Malaysia are on the rise.

Corn-T makes both PLA resin and film, according to a speech Ye gave last year. The company priced PLA film for 30,000 yuan (US$4,394) per metric ton and claimed annual sales of 6 million yuan (US$878,818).

The China-ASEAN free-trade agreement is the world's third-largest regional agreement in terms of economic value, after only the EU and NAFTA.

Posted by Nina Ying Sun on March 9, 2010 3:31 PM | Permalink | Comments (0)

Green container, toxic container?

One night during the Chinaplas show last week, I ordered takeout from a Cantonese-style restaurant in Shanghai. When the delivery was made, I saw that my meal came in one PP soup container and two (apparently) polystyrene foam containers - one with vegetables and one with rice.

I was mostly amazed by how thin the PP container and the disposable spoon were -a typical sign of low cost and low quality. They barely held their shapes. The soup container was clearly labeled "microwave safe," but it was so flimsy that I wouldn't heat it up at all.
Then, I discovered the foam containers were marked "degradable." Other than that claim, the only information I could find was the English acronym of the Chinese manufacturer's name, which is impossible to track down without an address or phone number.

After I finished the meal, a hotel housekeeper came to take away the containers. So I consulted with her, "is it because of the World Expo that even these foam containers used in Shanghai are degradable now?"

She took a look of the containers and answered with a shrug: "Who knows it's really degradable or not? You can never trust what they say on these things."

From a business standpoint, it makes little sense that a restaurant would use extremely flimsy PP containers and degradable foam containers - most expensive than conventional ones - at the same time.

From a technical point of view, degradable packaging is supposed to have the "QS" - standing for quality and safety -- mark on them, according to Chinese regulations. Without the "QS" symbol, an eco-friendly claim is most likely to be false.

A recent probe by Beijing-based International Food Packaging Association (IFPA) found that 80 percent of the self-claimed degradable food containers in the Chinese market don't live up to the green claim.

An authentic degradable food container costs about 0.2-0.25 yuan, while a fake one costs just 0.07 yuan, according to IFPA general secretary Dong Jinshi. "A lot of these fake degradable containers are made of recycled material and can be toxic," he wrote in his blog.

Posted by Nina Ying Sun on April 27, 2010 11:41 AM | Permalink | Comments (0)

Latest China industry stats

How fast has China's plastic industry been growing in the past 15 years? Will the growth slow down in the near future? How important is imported plastic waste for China?

According to Beijing-based China Plastics Processing Industry Association, the Chinese plastic processing industry has been developing at double-digit annualized growth rate since 1996. The global recession hit many export-oriented firms, but industry-wide growth started to pick up in April 2009, thanks to rising demand from the appliance, auto and construction industries.

CPPIA President Liao Zhengpin estimated that the industry will grow 15 percent this year. In the first quarter, sales increased by 33.5 percent and exports by 22.9 percent.

From 2011 to 2015, the output of sizable plastic firms (those with annual sales of no less than 1 million yuan) will double and reach 80 million metric tons, he said at the Chinaplas trade show last month.

Recycled plastic now represents a third of the resin that processors in China consume. The country imported 7.32 million tons of plastic scrap in 2009, along with 10 million tons of recycled plastic generated domestically.

Posted by Nina Ying Sun on May 25, 2010 12:32 PM | Permalink | Comments (0)

Plastic boarding passes debut in China

China's Qingdao city - a popular coastal tourist destination also known for the Tsingtao beer - is starting to use plastic boarding passes at its Liuting Airport, due to sustainability concerns.

The Liuting airport has been seeing its traffic as well as the number of boarding passes grow rapidly in recent years, according to Xinhua News Agency. In 2009 alone, more than 1 million paper boarding passed were printed.

The new plastic alternative wins out because it's reusable. Made out of flexible plastic material, these boarding passes are durable and easy to carry. On one side, the card shows gate and the airline; and the back side shows a map of the airport.

Click here to see photos of the card.

Posted by Nina Ying Sun on May 27, 2010 1:46 PM | Permalink | Comments (0)

U.S.-listed Chinese stock with highest return

Among all Chinese stocks listed in the U.S., the one with the highest return on assets ratio in the past 12 months is a plastics recycling company.

According to financial information firm China Analyst, Guanwei Recycling Corp. (NASDAQ:GPRC) features a ROA of 70.36 percent for the last 12 months. Its asset turnover ratio (revenue divided by assets) was 3.26 for the same period.

Guanwei has also shown the highest return on equity among U.S.-listed Chinese stock, according to China Analyst.

Earlier this month, Guanwei announced a sales contract with Sunshine Handels & Consulting GmbH, a German recycling company, for the purchase of 25,000 tons of LDPE waste through June 2011.

The Fuqing-based company reported a sharp increase in net income in its first quarter ended March 31, 2010, which rose 73.4 percent year-over-year to $2,204,604, thanks to growth of high margin business and lower raw material costs.

Reported net sales in the first quarter, however, suffered a 58 percent decline, because the company increase raw material inventory and stopped the resale of other manufacturers' products.

The company noted in its first quarter filing that, in addition to the recovery in selling prices for recycled LDPE, production volume of polyethylene in China increased 19 percent year-over-year to 2.84 million tons in the first quarter.

We wrote about Guanwei last December in this story.

Posted by Nina Ying Sun on July 23, 2010 5:13 PM | Permalink | Comments (0)

Firm touts liquid agricultural film

An Italian-invested firm in Zhejiang province claims that its "multi-functional biodegradable liquid film" can replace traditional agricultural films, which is a major cause of "white pollution" and soil degradation.

Zhejiang Bolong Ecological Technology Co. Ltd. is owned by shareholders of Bolong Ecotech Italia S.R.L Ltd. Zhejiang Bolong was founded earlier this year in Wenzhou with 50 million yuan ($7.4 million) of registered capital.

The company said its patented liquid film is made from weathered coal that is rich in humic acid. The material is "modified by activator to form [a] polymer... with the action of [a] crosslinker." It's then mixed with additives, silicon fertilizer, microelements, pesticide and herbicide.

When sprayed onto the soil, the product forms a thin protective film that retains heat and moisture. The film naturally degrades into humic acid in two to four months, becoming organic fertilizer, according to the company.

Posted by Nina Ying Sun on August 13, 2010 12:58 PM | Permalink | Comments (0)

Sail with plastic bottles

Boats made of plastic bottles have been increasingly used in environmental campaigners. A few Chinese citizens have recently followed suit and traveled five months in such a boat to visit the Shanghai World Expo.

According to a report from Xinmin News Network, Mr. Xia Yu from Hunan province built a boat with a total of 2010 beverage bottles that are each 600-milimeter in volume. He and two partners sailed the raft down the Yangtze River and a canal for 1,500 kilometers and finally arrived near Shanghai early this month.

Xia is thought to be China's first environmentalist to sail long distance on a boat constructed of plastic bottles.

Posted by Nina Ying Sun on October 11, 2010 11:07 AM | Permalink | Comments (1)

Another 150,000-ton PLA project?

A bioplastics manufacturer in North China has started building a PLA production base that claims planned annual capacity of 150,000 metric tons. More interestingly, the same company announced a same scale project three years ago, only with a different partner.

This time, Hebei Huadan Complete Biodegradable Plastic Co. Ltd. of Shijiangzhuang, Hebei province, is working with Taiwan's Wei Mon Industry Co. Ltd. to invest 400 million yuan (US$ 60 million) on the large-scale facility that will be making PLA packaging materials and consumer products.

Officials from the Hebei province attended the ground-breaking ceremony on Nov. 19.

Back in 2007, Huadan hosted an equally high-profile signing ceremony for a 150,000-ton PLA project at the Great Hall of the People in Beijing. The amount of investment was the same, the product line was no different, and the site was in same development zone. But the partner was a little-known investment firm - Hong Kong Tianhao Development Ltd.

It's my speculation that the 2007 project may have fallen through at some point. Huadan reported annual capacity of 50,000 tons last year, compared to 6,000 tons in 2006.

The new partner, Wei Mon Industry, is a reputable company that serves as a distributor for NatureWorks in Taiwan.

Huadan's corporate Web site is under development, but the only information there points to its, yet another, "partner" - MJ Group.

In the database of China's Ministry of Land and Resources, I found a recent record of Huadan purchasing the 50-year use rights of a 13-acre industrial-use land at the reported site with 52.5 million yuan ($7.9 million). The contract was signed on Aug. 27, and the construction of the project was expected to start on Feb. 19, 2001 and finish on Feb.19, 2013.

Hopefully, the ambitious project will complete smoothly this time.

Posted by Nina Ying Sun on December 8, 2010 10:32 PM | Permalink | Comments (0)

Toymaker finds hope in new biz

Half of the world's toys are still made in China's Guangdong province, but toymakers there have been complaining about razor-thin profit margins for a while. Some of them are exploring new product categories. Dongguan Jian Sheng Industrial Co. Ltd., for instance, is now making LED light fixtures.

The injection molder has downsized its toy division from more than 5,000 employees at peak time to a few hundred workers right, according to a recent feature story by First Financial Daily.

Chairman Li Weijian said he made the reduction in spite of growing market demand. Costs are creeping up, and he just couldn't find an effective way to ensure profitability.

Li said he started the toy business in 1989 and claims big-name customers including Mattel, Wal Mart, Disney and KFC.

For a while, the company thrived with the scale of production. However, thanks to fluctuating raw material prices, continuous wage hikes, and the strengthening Chinese currency, the risk associated with large-scale, low-margin manufacturing outweighs the reward.

Other challenges include trade barrier and stricter product safety measures by North America and Europe, he said.

A personal experience -- his old friend and toy factory head, Zhang Shuhong, committed suicide during Mattel's massive toy recall in 2007 - also made Li rethink about the toy business.

During the past year, his factory has built 800,000 square meters of manufacturing space for light fixture production and annual production capacity of 1 billion yuan worth of products, Li said.

He sees a great future for exporting energy-saving lamps and a good opportunity to finally build his own brand after decades of custom molding. He believes it's easier to build a brand in a new and fast-growing product category, which the toy business is anything but.

Posted by Nina Ying Sun on December 23, 2010 6:52 AM | Permalink | Comments (0)

China issues new recycling regulations

China's appliances and electronics manufacturers have been ordered to pay a recycling fee on their products, according to new regulations that just took effect on Jan. 1.

In turn, recyclers of appliances and electronics waste will receive a subsidy for the recycling service.

Leading appliances makers like Haier, TCL, and Changhong are building or expanding their recycling operations.

Publicly listed recycler Shenzhen GEM High-tech Co. Ltd. is seeing a boost of its stock price, thanks to positive feedback from the investment community on the new policy.

In addition to the recycling of e-waste and batteries, GEM also runs three wood plastic composite factories in Southeast China.

Analysts said the recycling fee, unspecified by the government, will likely be passed onto consumers, considering the already thin margin of the appliances industry.

The new policy also aims to tighten up imports of appliances and electronics waste and establish an accreditation system for recyclers.

Posted by Nina Ying Sun on January 3, 2011 3:47 PM | Permalink | Comments (0)

No sale of plastics bags near rivers

Not all plastics bag bans are the same. Uttar Pradesh, a northern state in India, has decided to ban the sale of plastics bags near bodies of water.

The new ordinance also bans the disposal of plastics waste - including biodegradable plastic - in the Ganga River, according to a report from the Indian Express.

I can see the intent of preserving the environment, especially scarce water resources in India. But the policy seems to be based on the assumption that people dispose of plastic bags at the same spot or near where they purchase bags.

I'm also curious how the ban will be enforced. How will they define and mark "the vicinity" of a water body? If plastics bags can't be sold by shops in the area, can retailers give them away for free? What if people bring plastics bags from other areas?

Posted by Nina Ying Sun on January 21, 2011 1:46 PM | Permalink | Comments (1)

Myth or fact: waste export to China

China buys plastic scrap from the U.S., recycles it, makes finished goods and ships the finished products right back to the United States. We've all heard this story, right?

"It's not the case," said Patty Moore, president of Moore Recycling Associates Inc. in Sonoma, Calif.

Speaking at a Jan. 27 online seminar hosted by the Association of Postconsumer Plastic Recyclers, Moore said most of the plastic waste that China imports and recycles ends up in goods sold in China.

The reasons are most quality-related, such as color consistency. Imported scrap is a good source of lower-cost feedstock to serve China's domestic population.

But even China is raising their bar on the quality of scrap, because workers there now demand better working conditions for hand-sorting jobs in the recycling industry, Moore said. During her tours of recycling firms in China, she saw things that are not "up to spec" and that would make OSHA "appalled."

"Low-quality bales will not be wanted in China," she said. "U.S. needs to deal with our own waste...Don't take garbage to have someone else deal with it."

Posted by Nina Ying Sun on February 1, 2011 4:17 PM | Permalink | Comments (0)

Pipe maker going solar

China now represents nearly two thirds of the world's solar equipment production, a growing industry that's known for attracting entrepreneurs and new investment from other fields. Take China Era Group, a Taizhou, Zhejiang-based manufacturer of pipes and fittings.

The 30-year-old company started its solar business five years ago, when the market was just starting to boom, according to a Jiefang Daily report from the recent SNEC 2011 exhibition.

The decision was intuitive, general manager Mr. Su Chengfeng said, as Era noticed the soaring electricity cost with more than 2,000 injection molding presses that he called "power guzzlers." The company made the move to invest in the future of alternative energy.

Another important reason to add the solar division was that Era was able to sell these high value-added products to its pipe business' established customers -- real estate developers and government buyers.

The solar business helped Era stay active during the financial crisis, when demand for building products declined.

Era owes its success partly to government support. Last year, it received 10 million yuan of subsidy -- which covered a third of the cost -- to install 1 trillion watts of solar panels on the roof of its factory buildings.

The SNEC show organizer told the Jiefang Daily that a large portion of the 1,838 exhibitors had previously worked in other sectors, including toys, footwear, and building products.

Posted by Nina Ying Sun on March 7, 2011 8:10 PM | Permalink | Comments (0)

12th five-year plan: Carbon fiber

China's carbon fiber composite industry reports annual capacity of 4,000 to 5,000 metric tons, while market demand is at least twice as much. But capacity is less of an issue compared to high-end applications, according to experts.

Tang Jianmao, a director at the China Materials Research Society of Beijing, told China's National Business Daily that the capacity will receive a boost during 2011-2015 to meet market demand.

Since carbon fiber has been a hot topic, Tang said, domestic investors have shown a high level of interest in this field. However, money will not necessarily buy technological advancement, he advised.

Currently, there are about a dozen of companies dedicated to carbon fiber composite manufacturing in China. Hunan Oya Carbon Co. Ltd. is one of them.

Oya's general manager Zhou Yujun said his company had 57 million yuan (US$9 million) in 2010 sales, despite the sluggish European market. He expected sales to grow to 80 million yuan (US$12 million) this year and 150 million yuan (US$23 million) in 2013.

The company supplies carbon fiber composites to carmakers like BMW, Lamborghini and Ferrari, as well as aircraft manufacturers.

Its high-value added products for high-end clients are very rewarding, with profitability higher than 80 percent.

Zhou said he hopes the Chinese government will support the development of the carbon fiber industry, which will help other sectors -- such as the booming auto industry - become greener and more competitive.

Posted by Nina Ying Sun on April 7, 2011 9:25 PM | Permalink | Comments (0)

12th 5 year plan: PVC

Despite significant oversupply -- contributing to a low 55 percent capacity utilization rate -- further expansions are underway in China's PVC sector in the next five years. However, new PVC capacity will focus on higher-value-added grades, replacing outdated, lower-end, and energy-inefficient plants.

China's PVC capacity totaled 20.4 million metric tons in 2010. Actual output exceeded 11 million metric tons in 2010, and is expected to rise almost 10 percent annually to more than 16 million metric tons in 2015, according to various industry reports.

While exports could theoretically be a solution to overcapacity, Chinese PVC producers -- many using coal as a feedstock -- are losing price advantages due to a number of factors including the strengthening currency. They also face rising coal prices as China becomes a net importer of coal. Low-price ethylene imported from the Middle East poses further challenges to coal-based PVC.

Demand-wise, since 70 percent of China's PVC output is used in construction, the future of the real estate market in China brings some uncertainty. However, Beijing's aggressive plans to add government-subsidized residential housing and remodeling of old building are expected to boost demand.

The government is also taking solid measures to encourage low-emission, energy-efficient manufacturing. Policymakers said they'll take a more active role in regulating the industry through the approval process of new PVC projects as well as economic incentives such as electricity prices, taxes and lending policies.

Posted by Nina Ying Sun on April 19, 2011 3:41 PM | Permalink | Comments (0)

Why NatureWorks' 2nd plant is not in China

NatureWorks Chief Marketing Officer Peter Clydesdale spoke at a Chinaplas concurrent event last month, with news and comments on global growth strategies and plans, including in the U.S., South America, and Asia. I also interviewed him on why the company didn't pick China as the location for its second plant.

Asia plant

NatureWorks will announce details of its second global plant -- to be located in Thailand, or Malaysia, or Singapore -- "in one or two months," Clydesdale said on May 18.

There are many elements in the site selection process, he noted. "It's not a black and white, simple decision."

The primary concern with China is access to feedstocks. For the ethanol industry in China, for instance, "there have been changing decisions on how much corn will be available for industrial uses vs. food use."

Also, a lot of the potential feedstock in China would originate in Northeast China, but most plastics processing is concentrated in the South. The long distance and inefficient domestic transportation would be expensive.

Other factors for consideration include the large amount of investment required to build such a facility, access to cellulosic feedstock in the longer term, locations of the OEMs, etc.
In comparison, places like Thailand, Malaysia and Singapore will be able to supply sugar cane and tapioca-based feedstock, which will likely to be the primary feedstock for NatureWorks' PLA resin plant. Those countries also have large petrochemical industries and many downstream converters. Meanwhile, the local governments are offering incentives and strategic projects to encourage the growth of bioplastics.

The Asia plant is expected to come on line in late 2014 or early 2015.

Americas

In the U.S., the company is finalizing a 20,000 ton expansion of its 140,000-ton manufacturing facility in Blair, Neb. The additional capacity will come on stream in the next 12-18 months.

NatureWorks also is looking into recycled PLA as a reasonable sourcing option starting 2013. Later, maybe starting in 2017 for its third plant and beyond, the company hopes to have "a component of cellulosic feedstock."

The company now has agents in Brazil, Chile, Mexico and Colombia, and is looking to expand into Argentina. The Central and South America business is expected to represent 5 percent of its total sales in the next three years or so.

Global

With more than 300 licensees worldwide, Natureworks said more than 30 percent of the Ingeo biopolymer sales are from the Asia Pacific (including Japan), about 20 percent in the European Union, and close to 50 percent in North America.

Global annual sales growth rate has been "pretty much" in the 30-40 percent range since 2005, despite the global recession, the company said.

While noticing emerging competition from other bioplastics makers such as China's Hisun, Clydesdale said they can't compete with NatureWorks' scale. "I don't see the gap changing in five years."

Ingeo PLA is used in the packaging of Shiseido's Uara products for the Chinese market. (NatureWorks photo)

Posted by Nina Ying Sun on June 23, 2011 4:29 PM | Permalink | Comments (0)

MBA Polymers seeks funding in China for new factory

Plastics News reported in March that U.S.-based engineered plastics recycler MBA Polymers had raised $40 million in investment since summer 2010 for continued expansion. Now it looks like the company is also looking for more funding in China for a new plant there.

The seven-year-old Chinese joint venture, Guangzhou GISE-MBA New Plastics Technology Co. Ltd. (GMP), sent its general manager Wang Zhongyuan to a networking event for investment and financing for clean technologies held last month in China, according to a report from the 21st Century Business Herald.

When it was launched in 2005, GMP's Guangzhou plant was MBA Polymer's first commercialized recycling facility. It currently processes 40,000 tons of plastic waste and churns out more 30,000 tons of recycled resin per annum. GMP plans to build a new plant to address strong market demand, Wang was quoted as saying.

When asked about the supply of plastic waste, Wang said most material came from Europe. The company gets paid to take some of the waste, instead of paying for it, he added.

The Guangzhou plant was built with an investment of 124 million yuan (about US$15 million at that time). Wang said the new plant needs a larger investment.

GMP has been in the red ever since the opening, with the exception of 2008, when it managed to make a small profit. But Wang said the situation has changed since last years and he expects to see "really good profit" this year. It mainly supplies to appliances, automotive and office electronics manufacturers.

Potential investors were also interested in the ownership of the recycling technology. The report said key equipment for the new factory will be purchased from MBA Polymers.

Posted by Nina Ying Sun on August 5, 2011 4:59 PM | Permalink | Comments (0)

Half-year results of China's 1st coal-to-olefins project

China's Shenhua Group officially started commercial production at the Baotou coal-to-olefins project on Jan. 1, 2011. The company recently announced a six-month review of the project, which was the first of its kind in China.

With capacity utilization rate kept above 85 percent, the project produced 273,040 metric tons of polyolefins and sold 263,290 tons in the first six months, according to reports from local media in Baotou, Inner Mongolia. Adding in sales of byproducts, the project achieved total sales of 3.1 billion yuan (US$484.8 million) and profit of 875 million yuan (US$136.9 million).

The project uses Unipol technology licensed from Dow Chemical Co.

Posted by Nina Ying Sun on August 16, 2011 3:59 PM | Permalink | Comments (0)

Taxes based on electricity bills

Some plastics recyclers in China are facing a new taxation method - taxes will be calculated and collected based on a company's electricity usage instead of reported business revenues.

Tax authorities in Wuning, Zhejiang province, believe this will be a good solution to problems caused by plastics recyclers, especially small shops, failing to report revenues truthfully, according to the Dongyang Daily.

Two different formulas have been developed: one for those that sort and clean the scrap, and one for those that reprocess the waste into pellets.

I wonder how accurate and effective the formulas are, but no details are available. If this new method proves to effective, it will likely to be adapted in other regions.

Posted by Nina Ying Sun on September 9, 2011 4:51 PM | Permalink | Comments (0)

Crackdown impacts scrap market

Local governments in China are trying to better regulate the plastics recycling industry, sometimes at the expense of job losses and market disruption. In Wen'an, Heibei province, nearly 100,000 people are reportedly jobless from a recent crackdown.

Aiming to stop the pollution caused by washing and reprocessing plastic scrap and to improve the local environment, according to the Beijing News, Wen'an's government started in July what it called "the most forceful campaign" in July, not only shutting down recycling operations, but also blocking trucks that carry raw plastics waste from entering the town, known as "the capital of plastics scrap" in North China.

Unlike previous crackdowns, the report said, the new town officials are enforcing the ongoing campaign thoroughly and consistently. They dissemble and confiscate processing equipment, and even shut down power supply.

About 125 miles away, scrap collectors and brokers in Beijing saw their inventory rise and prices drop, with the exception of PET bottles, which are recycled in Beijing.

A trade group official told the Beijing News that Beijing generates 1,800 metric tons of plastic waste every day, the majority of it landfilled. The recyclable ones, estimated to be 200 to 300 metric tons, mostly end up in Wen'an.

But since the majority of plastics scrap that flow into Wen'an is imported, the current crackdown has also lead to pileup of imported plastic waste in nearby ports.

Posted by Nina Ying Sun on September 14, 2011 5:07 PM | Permalink | Comments (0)

Reasons to crack down on recycling

After reading my last post on Wen'an shutting down local plastics recyclers, did you wonder why the Wen'an government is so determined to put a brake on apparently the largest industry and employer in town? Let's take a deeper look.

Water pollution is one of high-profile reasons. Thousands of acres of wheat crops that were irrigated with water from the local river had almost no harvest this summer, newspapers reported. Local residents only drink water from deep wells and bottled water.

The rivers are polluted by untreated waste water from the recycling shops. The local water treatment plant, built in 2009, couldn't handle the work and is often idle.

But some of the local residents don't seem to take the pollution and health issue seriously. Plastic waste is burned in back yards and around the farmland all year round.

For the government, however, the real incentive for the iron-fisted crackdown is economic.

Out of the 4,000 recyclers, 95 percent are not registered, and 98 percent don't pay taxes, officials said. The county received less than 500,000 yuan (US$78,271) in annual tax revenue from the plastics recycling sector, which employed nearly 100,000.

A spokesperson from the China Renewable Energy Society told the Beijing News that Wen'an should learn from the successful experience of Laizhou, Shandong province, where the government facilitated 2,000-3,000 under-regulated small shops to merge into a few hundred bigger, registered companies.

I hope Wen'an can push beyond the current crackdown and transform its plastics recycling industry into a truly sustainable business that not only makes money but also preserves the environment.

The change won't happen without pain. But Wen'an, and many other small towns villages in China, need it, desperately.

Posted by Nina Ying Sun on September 16, 2011 4:45 PM | Permalink | Comments (0)

Coke eyes Central China for R&D

A Coca-Cola China executive said last week that the company is interested in setting up R&D for plant-based bottles in Central China, taking advantage of the local agricultural resources.

During a sustainability forum at the Expo Central China 2011, Coca-Cola Greater China vice president Bai Changbo told the audience that the company is developing plant-based bottles and encourages more companies to use agricultural waste to replace some of the current feedstock - such as corn - for bio-based packaging materials.

Considering the high R&D cost at the earlier stages, he was quoted by the Taiyuan Evening News, "If the six central provinces can provide preferential polices and support, we are willing to give it a few tries in this region."

The central six provinces include Shanxi, Jiangxi, Hubei, Hunan, Henan and Anhui.

China's National Development and Reform Commission (NDRC) announced last year announced a specific outline to build this region into a base of grain, energy and machinery production, aiming to boost per capita GDP up to 36,000 yuan ($5,295) by 2015.

Posted by Nina Ying Sun on October 6, 2011 3:20 PM | Permalink | Comments (0)

Waste plastics smugglers sentenced in China

Two people were recently convicted at a regional court in China of smuggling waste plastics into the country. One faces 13 years of jail time and 15 million yuan (US$2.4 million) of fine, and the other 10 years in prison and 5 million yuan (US$790,000) of fine.

The two - one Chinese native, the other born in Vietnam but immigrated to China through marriage - smuggled a total of 19,893 metric tons of waste plastics from Vietnam into China's Guangxi autonomous region from January 2009 through April 2010, according to China News Service.

The plastics scrap was purchased in Vietnam, smuggled through a river on the border, and then transferred to other regions in China. The well-organized crime evaded at least 20 million yuan (US$3.2 million) in tariffs.

Five other accomplices were also sentenced to prison time of three years or longer, as well as fines.

Posted by Nina Ying Sun on November 3, 2011 5:05 PM | Permalink | Comments (0)

Coke China stops using PVC labels

Starting last month, Coca-Cola the global beverage giant has stopped using PVC labels on the bottles of all its products in China, a move that defines its leading position in the sustainability movement in that nation.

The company explained that while PVC complies with the safety regulations on beverage labeling, it may cause harm to the environment if it's improperly recycled, according to a China Daily story.

The story was ambiguous about what sort of harm PVC labels cause in the environment. But plastics recyclers in the U.S. have been lobbying for Coke and other food and beverage companies to stop using PVC labels on PET bottles because the materials are not compatible in the same recycling stream.

The China Business Times, which broke the news among Chinese-language media from an environmental innovation show last week in Guangzhou, added a comment itself that PVC is considered potentially toxic and could leak cancer-causing chemicals. While that statement is debatable, media messages are making consumers in China increasingly cautious about product and packaging materials.

Coca-Cola is the first beverage company in China that has completely ceased the use of PVC labels on all products, said China Business Times. Labels are now made of OPP (oriented polypropylene) and other types of materials.

Also on the sustainability front, the company started last year using super lightweight bottles for its Chinese water brand Ice Dew, which can save 6,200 tons of PET annually based on 1 billion bottles of annual sales.

As well, it now sells products in plant-based bottles in Shanghai and Taiwan, after a high-profile launch of the plant bottles at the Shanghai World Expo last May.

Posted by Nina Ying Sun on November 16, 2011 3:50 PM | Permalink | Comments (0)

Japan's Ajinomoto uses fully recycled PET bottles

Japan's beverage manufacturer Ajinomoto General Foods (AGF) has unveiled a new plastic bottle that's made from 100 percent recycled PET, and will start to expand its use to all of its main products starting in February, Japanese media reported. The company expects to consume 4,500 metric tons of recycled PET in the new bottles annually.

According to the Nikkei Business Publications, PET Refine Technology Co., a subsidiary of Toyo Seikan Group, supplies the bottles to AGF. The company uses its chemical recycling technology.

AGF said the chemically recycled PET costs about the same as virgin PET. Toyo Seikan said it managed to reduce production costs through equipment improvements.

The Nikkei report said the Japanese industry previously had two players that carried out bottle-to-bottle PET recycling -- PET Reserve and Teijin Fiber. However, due to raw material shortages caused by waste bottle exports to China, PET Reserve filed bankruptcy in 2008 and Teijin suspended the recycling business.

PET Refine Technology took over PET Reverse and continued to develop the market, the report said. It supplied 19,500 tons of recycled PET resin to beverage manufacturers in 2010.

AGF is a joint venture of Ajinomoto Co. Inc. and Kraft Foods Inc.

Posted by Nina Ying Sun on December 20, 2011 4:43 PM | Permalink | Comments (0)