eBusiness Weekly
From pink plastic dinosaurs to clothing, carpets, toothbrushes, computers and components for planes and automobiles, plastic is ubiquitous in our daily lives. Since its inception in 1856 manufacturers have pumped out eight billion tonnes of virgin plastic.
Yet somehow, until recently, consumers were oblivious to the fact that of this plastic tsunami, just 9 percent has been recycled, 12 percent has been incinerated and the remainder — 79 percent — has been thrown into landfills, or ended up in the ocean.
We are truly drowning in plastic
Consumers and activists are starting to push back. In 2016, a Greenpeace petition for a UK-wide plastic microbead ban hit 365 000 signatures in just four months; supermarkets like Tesco plan to ban all packaging unsuitable for recycling; locally Spar and Woolworths have committed to cutting out plastic shopping bags, and there is a growing call for the authorities to ban single-use plastic carrier bags, small fruit and vegetable bags, plastic straws, stirrers, cutlery and earbuds.
Sir David Attenborough’s Blue Planet series is heralded as a key moment sparking the war on plastics.
The series takes a hard look at the impact of human activity on marine life, with one episode showing a sperm whale attempting to eat a plastic bucket and albatross parents attempting to feed their chicks plastic.
Fast-moving consumer goods companies like Unilever, Nestlé and Danone are driving some of this change — after all, Coca-Cola or Estée Lauder bottles washing about in the ocean can attract negative publicity. Other change is being driven by companies that see a healthy commercial opportunity.
The allure of aluminium
The chairman and CEO of Ball Corporation, the world’s largest manufacturer of recyclable metal beverage and food containers with annual revenue of $14 billion, believes the trend towards sustainability presents companies like it with a once-in-a-lifetime opportunity. The company exited the last of its plastics businesses in 2010.
“Our world has shifted to a much more sustainable world and we are on the right side of this equation,” John Hayes told investors at a briefing in October last year.
“What many people don’t know is that 75 percent of aluminium ever produced is still in use today — cans are infinitely recyclable, with little loss of the yield of aluminium.”
The reason cans are so successfully recycled is partly economic. In the US it costs about $1 300 to buy a ton of recycled aluminium, whereas plastic yields about $100 to $200 a ton. In South Africa reclaimers in Johannesburg are paid about R2/kg for white paper, R1.10 for cardboard and R3,50 for cold drink bottles, Eli Kodisang, organiser of the Waste Picker Integration SA project, told the Financial Mail.
Investment analyst Chris Logan from Opportune Investments believes companies like Ball Corporation could serve as an example for local packaging companies. “Ball Corp’s share price is up some 25 times in dollars since 1994 (or 100 times in rand) versus Nampak, which has witnessed flat growth over that 25-year period.”
And indeed the likes of Nampak, Mpact and Hulamin, which are not as narrowly focused on beverage cans as Ball Corporation, do see the strategic opportunity in moving towards more sustainable packaging.
Significant trend from plastic to tin
“I’m very bullish about the future of aluminium,” says Richard Jacob, CEO of Hulamin, which supplies aluminium to local and international manufacturers. “We are seeing a significant global trend away from plastic to tin (from both vehicle and beverage can manufacturers). At this point it is not pushing prices up — it will take another year or two before we see a measurable benefit.”
Packaging company Nampak derives 64 percent of its revenue and 88 percent of its operating profit from its metals businesses, which are situated in some of the toughest countries in the world to do business — Angola, Nigeria, Ethiopia and, arguably, South Africa.
The manufacture of plastic packaging contributes 27 percent of turnover and 10 percent of revenue and paper 9 percent and 12 percent respectively.
“We are definitely seeing a greater awareness among producers, retailers and consumers on the impact of packaging on the environment,” says André de Ruyter, CEO of Nampak.
“However, the solution does not lie with simply replacing plastic with aluminium, it is more complex than that. For companies like ourselves, the opportunity lies in finding innovative solutions to our customers’ problems.”
For instance, plastic plays a critical role in applications such as packaging for food preservation. Up to 30 percent of food produced is going to waste, he says. Instead, we need to look at which are the plastics we can live without and how we can better manage the ones we can’t.
“We are working on packaging that has a minimal environmental impact. That is a challenge, but there are solutions,” De Ruyter says. — Moneyweb.
