June 11, 2024 | 07:30 GMT+7

Packaging sector's role in circular economy

Lưu Hà -

 Many packaging companies are willing to play their part in recycling efforts but cost and practicality are pressing concerns.

In developing eco-friendly logistics, enterprises in the sector have been urged to use packaging crafted from recycled materials or others that readily decompose in natural settings. This and other moves aim to cultivate an environmentally-conscious business environment and foster sustainable manufacturing practices.

Vietnam has set forth an ambitious objective of embracing 100 per cent environmentally-friendly packaging by 2025, a goal that holds promise through cooperative efforts between government bodies, businesses, and communities.

However, businesses face the ever-present challenge of balancing cost and output in increasing the presence of products with recycled packaging on shelves. Green products often face pricing barriers, and are typically 10-30 per cent more expensive than conventional counterparts.

Inexorable trend

Mr. Ly Hoang Hai, General Director of the Eurofins Sac Ky Hai Dang Co., Ltd., a member of the Eurofins Scientific Group, believes that products consumed in domestic and export markets face scrutiny not only in regard to quality but also in aesthetics, safe packaging, and adherence to Vietnamese and global standards. This necessitates robust investment by businesses in research, technological advancements, green materials, recycling, and various packaging approaches.

Such a transformation requires substantial resources, time, effort, and workforce development. Ms. Pham Thi My Duyen from the Minh Phat Manufacturing and Service Co., Ltd. emphasized the company’s adoption of compostable starch bags in response to growing demand for eco-friendly packaging. These bags, upon disposal, decompose entirely. “The production process for green packaging differs significantly from that for regular plastic bags,” she explained. “Hence, companies must upgrade machinery while providing technical retraining for workers and devising methods to ensure product preservation until it reaches consumers.”

A range of companies in the beverage sector have been gradually using recycled materials in their products. Nestlé, for example, has transitioned from plastic straws to paper straws in its packaged milk beverages, despite the latter being triple the cost. Packaging company Lamipak, meanwhile, plans to introduce aluminum-free milk cartons, allowing for easier recycling compared to traditional cartons. The company also supplies many major enterprises with readily decomposable, unbleached milk cartons, minimizing chemical ink use.

Ms. Trinh Thi Minh Thuy, Director of the MT Food Trading and Production Co., Ltd., shared the story of her company’s first export shipment to the US. All import requirements had been met, but the company’s shipment was returned due to issues with non-recyclable packaging. “MT Food has only used paper packaging for our export products since then,” she said. “However, a pertinent question arises: Are there alternative materials that even surpass paper in packaging effectiveness while maintaining environmental friendliness? This gains greater significance as foreign counterparts raise concerns about paper packaging, associating it with deforestation.”

Meanwhile, Mr. Anil Viswanathan, General Director of Mondelez Kinh Do Vietnam, highlighted data from the Vietnam Pulp and Paper Association (VPPA) indicating that Vietnam’s collection and recycling rate of used paper, including carton packaging, stands at approximately 50 per cent, which is significantly lower than the global average of nearly 60 per cent. Notably, the EU, a crucial export market for Vietnam, has enacted new packaging regulations aimed at reducing packaging waste. Consequently, Vietnamese exporting enterprises have a five-year window to transition to alternative, eco-friendly packaging solutions.

Facing challenges

According to Mr. Tran Do Hoai Bao, Director of the HEVI Manufacturing and Trading Joint Stock Company, packaging stands out as a priority in implementing circular economy principles, especially the utilization of sustainable packaging materials. Adopting eco-friendly packaging isn’t merely a passing trend but a critical factor determining a company’s viability. Selecting packaging materials requires careful consideration of product quality, environmental impact, and recyclability. Hence, businesses must heavily invest in research and development, utilize eco-friendly materials, and implement diverse strategies in packaging production.

Mr. Jeffrey Au, Head of Sales, International Sales Office Asia, at Informa Markets, noted that the packaging industry is poised for robust growth in Vietnam, with a projected average annual increase of 15-20 per cent. There are currently over 900 active factories in the sector, predominantly concentrated in the southern region, most notably Ho Chi Minh City and Binh Duong and Dong Nai provinces. The market is diverse and encompasses various materials, such as paper, plastic, metal, glass, wood, textiles, foam, and leather. Plastic, paper, and cardboard packaging contribute significantly, comprising over 80 per cent of total sales revenue.

Mr. Le Tam Khoi, Regional Head of Marketing, APAC (excluding China), at Lamipak, emphasized one challenge facing businesses: the prices of non-aluminum milk cartons and untainted milk cartons are 12 per cent and 19 per cent higher than conventional milk cartons. Consequently, the adoption of new environmentally-friendly packaging solutions remains limited to small-scale production and custom orders. This also increases production costs, posing difficulties in competing with mainstream products.

During the annual conference of Vietnam’s packaging companies in 2024, held in Binh Duong province, Mr. Nguyen Lien Minh, Executive Committee Member of the Vietnam Packaging Association (Vinpas) and General Director of the Alliance Packing Plastic JSC (APLAS), pointed out that if businesses could recycle 50 per cent of the plastic waste currently being discarded, Vietnam could reduce annual imports of virgin plastic by about $1 billion. However, he added, to achieve this there needs to be investment made in recycling collection systems, especially retrieval costs. Plastic waste collection in Vietnam is quite complex due to the variety of materials in use, such as plastic, paper, metal, and glass, leading to high costs while collection value is low.

The need for significant investment in eco-friendly packaging is evident, but its potential remains constrained due to a lack of specific regulations in the broader food packaging sector. Moreover, while environmental consciousness is growing, consumer adoption of green packaging remains limited. Regulations on single-use plastics, both internationally and domestically, lack stringent enforcement. Consequently, many enterprises hesitate to invest in the endeavor. Meanwhile, the packaging industry faces intense competition, compelling businesses to innovate and offer unique value propositions to retain market share.

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