Environment has clearly emerged as a top priority for most nations worldwide including China. Dr. Steve Wong, President, China Scrap Plastics Association and Managing Director, Fukutomi, shares with Swaliha Shanavas his thoughts on the state of the plastics recycling industry and the significant issues including on-going policy changes in China that could impact the trade locally and globally in the coming years.
Tell us a bit about your background and experience in this industry. As the head of Fukutomi Company, what is your typical workday like?
After completing graduation in the UK, I started my own business in Hong Kong. In 1984, Fukutomi Company Ltd. was established, initially in the watch business and later on in plastic recycling. Over the past decades a global sourcing network has been built up, including the setting up of overseas partnerships. Apart from the upstream business where Fukutomi has a strong foothold, plans are in place to expand to the downstream processing and pelletizing through our facilities in Hong Kong, China, Malaysia and Vietnam.
Running a plastic recycling business is not an easy task these days, as we have business counterparts in different corners of the world, working at different time zones. Apart from attending to offers from customers, I also need to liaise with our commercial staff and business partners for market intelligence, sourcing and sales strategies. I can afford only a few hours’ sleep per day, while I also try to find the time for jogging.
In your capacity as the President of China Scrap Plastics Association (CSPA), how has your journey been so far?
It has been a very interesting and challenging role considering the fast changing government policy and adverse economic climates which members of CSPA are facing. With China being the largest market for plastics, CSPA plays a vital role in trying to raise the market transparency and narrow the communication gap between overseas suppliers and importers in China, and I try to be a facilitator. Nevertheless, there is a long way to go.
What is the role of plastics scrap and recycling in the global trade and what do they spell in terms of economy and the environment?
There is a pressing need to increase the recycling rate of plastic scrap globally due to two major issues – reducing carbon emissions and reducing the number of landfills, a policy that is actively being pursued by all major countries. Plastic recycling has a very significant role to play in meeting the challenging target of reducing carbon emissions in the next five or 10 years, as the level of carbon emission is much lower than plastic-from-oil. Less plastic scrap being sent to landfill can definitely improve the ecology.
Apart from achieving a closed loop economy, plastics recycling creates jobs as the recycling process is more labour intensive than plastic-from-oil. It also generates business opportunities for the ancillary service industry such as transportation.
What are the opportunities in the plastics recycling sector and the key factors that hinder the growth of this segment, especially in developing countries?
As EPR and PCR is the direction in which major corporations and brand-owners are going with or without government policy guidance, the growing demand for recycled plastic materials is beyond dispute.
Recyclers will need to adapt themselves to meet government policies and society’s demand for environmental protection. The process of transition will weed out some smaller recyclers, while those who are prepared for the change and able to meet the new challenge will continue to grow.
What is the present state of the plastics recycling industry in China and what are the significant developments in recent years?
In common with other countries, China also encourages plastic recycling in order to reduce landfills and has successfully doubled the quantity of recovered plastics during the last ten years to 16 million tons by 2014, while the amount of imported plastic scrap had increased by 17% to 8.4 million tons.
Priority is given to the improvement of the environmental conditions. Thus, there is a trend of industry consolidation whereby the strong ones with proper processing facilities are expanding while the smaller ones that are not able to meet the government standards are eliminated or try to merge with others in order to survive.
What are the main Environmental issues facing China? Four years after the implementation of Operation Green Fence, what are the changes that have taken place within China’s plastics recycling sector and in what manner has this impacted the sector overall?
China has been plagued by environmental pollution problems including air, water and soil. The air pollution situation in Beijing is particularly severe and has exceeded the safety levels of the air quality index by two to four times. Despite the Government’s efforts, it is expected to take several years before it reaches acceptable levels. Plastics recycling is one of the industries to be blamed, which is also a polluting origin for water and soil.
The aftermath of Operation Green Fence is visible in terms of reduced imports into China, while in the exporting countries more scrap is recycled at source and sold in the domestic market. Some have diverted their exports to Southeast Asian countries to alleviate the concentration in one market, and to lower their costs, as China’s labour and import costs leave very narrow margins. This is evident in the declining number of licenses to importers in China which was 1590 before the Green Fence down to 1266 by year 2015. The volume of imports went down from 8.40 million tons in 2014 to 7.45 million tons in 2015.
What are the changes one can expect in this sector in the near future?
There is a tendency that only recycled and less polluting plastics such as clean regrinds or pellets that can be used directly for production can be imported into China. Exporters have to recycle at source before shipping out.
What do you love most about your job, and what is the most challenging aspect? What do you like to do in your spare time?
Plastic recycling is a very challenging industry and I get immense satisfaction in my job. Plastic is one thing that our modern society cannot live without and Fukutomi is proud of being part of the supply chain since the last thirty some years. We have contributed millions of tons of raw materials to China’s manufacturing industry. Nevertheless, the necessity to keep in line with the rapid changes in government policy is really a challenge. I enjoy marathons and try to run at least six full marathons in a year as this gives me a sense of accomplishment.