Manufacturers in Kenya earlier this month announced that they have teamed up to form an organisation called PET Recycling Company Ltd (PETCO) that will coordinate initiatives to collect, sort and recycle plastic bottles.
The move comes barely two months after The National Environment Management Authority (Nema) unexpectedly put on hold a ban on the use of plastic bottles in the country, a day before its deadline on April 30.
Before the deadline, manufacturers of plastic bottles had been directed to install collection points for the bottles across the country. However, the organisation, created by firms such as Unilever and Coca-Cola will now serve as a creative way to market their environmental protection efforts to customers while at the same time adhering to regulations on plastics.
“Tonnes of polyethylene terephthalate (PET) are sold annually in Kenya and used to make beverage, food and other packaging material. There is a strong case for recycling since polyethylene terephthalate has fully recyclable synthetic fibres, with polymer chains that can be recovered for use in the manufacture of new products,” said John Waithaka, the Chairman of PETCO Kenya.
Recycling efforts in the Kenyan plastic industry have been taking place but the organisation represents the first joint effort to self-regulate and create a sustainable approach to PET management.
PETCO Kenya aims to achieve recovery and recycling rate of 25 per cent in 2018 and 70 per cent by 2030. Currently, the local plastics industry imports 20,000 tonnes of PET annually and is estimated to grow at a rate of 10 per cent each year. The industry is currently achieving a recovery and recycling target of just around five per cent of what is consumed, according to Nema.
Each of the companies represented in the organisation will contribute an extended producer responsibility (EPR) fee that will be used to generate subsidies for recyclers in Kenya. It has three categories — brand partners, converters and bottlers.
The brand partners are the initiators of the project; they have invested more in the organisation. The converters include companies that create preforms from the raw product called resin, and the bottlers are companies involved in the bottling of beverages for distribution.
The Kenya Association of Manufacturers is also a member of PETCO. The aim of the organisation is to have all the companies under these categories in Kenya to join the initiative.
“A board of directors made up of representatives from all sectors, which make up the PET value chain, will oversee the organisation’s activities,” said Mr Waithaka.
The regulation, despite not taking effect, therefore set the motion for the formation of the manufacturers’ organisation leading them to discover new ways that they can manufacture environment-friendly products but still achieve profitability.
A 2010 paper that studied the impact of regulation-driven environmental innovation by the Centre for European Economic Research, found that environmental innovations do not harm the competitiveness of firms in general.
Additionally, the product and process innovations driven by environmental regulation generate similar success in terms of sales with new products and cost savings. In fact, the survey found that there was a positive impact of innovation leading to the probability for companies in the field of recycling and waste management.
The researchers studied German companies that had innovated in 2009 following the introduction of environmental regulations.
“Companies with innovations prompted by regulations on recycling and waste management achieve slightly higher price-cost margins due to the more cost-efficient production, that is reduction in material costs. In addition, there is a positive profitability impact of product innovations motivated by regulations on increasing resource efficiency, which particularly relates to eliminating the use of hazardous substances,” reported the Centre for European Economic Research.
Research shows that properly designed environmental regulations motivate firms to innovate, which ultimately improves profitability.