Growth Pressures
‘spans’ back to environment and sustainability markets.
Calling for the need to build a business pipeline, address security concerns related to water supply and quality, waste management, and indoor air quality, the webinar emphasised on building a circular economy in the future where raw materials, components and products retain their value to the maximum possible. According to Melvin Leong, Director- Sustainability program and Industrial Practice, Frost & Sullivan, it is quintessential to use advanced and innovative solutions backed by resilient business models. The session touched upon critical topics like environment growth opportunities, challenges, immediate inter vention areas and technologies. The meeting was an attempt to direct organisations looking rebound and emerge stronger from the pandemic.
The session drew attention to the factors responsible for industr y growth pressures. It identified diminishing returns and rising operational costs. It also highlighted the evolving customer value chain. Tech-savvy customers and the emergence of alternative sales channels have given way to a prime example. The focus was on strained water-resources and growing waste generation — low rec ycling rates, especially in Asia-Pacific. Problemsolving companies will shape the future with their disruptive tech. Facing stiff competition from startups, the well-established companies will continue to thrive on change.
Impact on automotive
Many automotive markets are severely hit and forced to change.
Importance of hygiene, for instance, has resulted in the growing popularity of sanitisers indirectly positively impacting chemical manufacturing. Ecommerce and digitisation have been rampant making up for the lag and unacceptance pre-Covid. It has also led to a renewed rise in plastic waste levels as an outcome of heightened packaging levels. Cautioned Leong, “Customers in the sustainability industr y may not invest further in new technolog y beyond the basic requirement of water treatment and waste management. New budgets will be under pressure.” An audience poll to identif y growth themes had more than 70 per cent participants vote in favour of nextgeneration technologies. Others backed governance and business models coming off age as growth contributors.
Growth contributors
Ser vice deliver y is crucial for sustainability markets. It is severely stressed. Claimed Leong, tenders related to environment ser vices were postponed, delayed or even cancelled. New investments in this industr y were also affected. Citing optimism against all the odds, he highlighted focus areas like ongoing efforts to improve access to clean water for the industr y. He also touched upon the renewed focus on environmental technologies to promote the circular economy. Admitting that the opportunity was not new, he, however, put in perspective the rising importance of resource management and monetisation. Re-evaluating environment management strategies to address f loods and droughts also found a mention. “It is important to understand that climate issues do not halt because of a pandemic. Solutions which benefit water management and waste management for business security and socioeconomic security will become ever more important and is the way to kickstart economies again,” he exclaimed.
Water utilities for economic reactivation
The utility of water is associated with ser vices required by a heat process, for instance, the use of water in steam production, cooling, rinsing for Cleaning In Place (CIP). CIP, in effect, is using water with a mix of heat and chemicals to clean machinery sans any dismantling.
For example, high-pressure water cleaning systems are known to degrease, de-oil or remove residues in automotive plants. “By the end of 2020, we are expecting healthy growth in the capex expenditure by around 8.2 per cent,” opined Leong. As per a statistic, countries with more than 10 per cent growth in 2020 would be Australia, Philippines, Indonesia and India. Countries with growth between five to 10 per cent would be China, Vietnam and Thailand. Singapore will expand its wastewater infrastructure and improve the sustainability of water resources. Australia, on the other hand, will continue to improve irrigation in remote areas, and Japan will look to strengthen its flood control system due to excessive rains. For Korea, overall network improvement will be the focus. Stating that the AsiaPacific region will continue to refurbish or expand its various water infrastructures treatment to distribution, Leong was quick to point out how going for ward the goals of governments would be reoriented to support economic reactivation. Until 2021, refurbishment, desalination plus membrane, pipework, leak detection and metering, and smart ser vices will present excellent opportunities. Known to be out in the public domain for the past three years, these have gained newfound relevance.
In t he ref urbishment are a, utilit ies need to focus on pl ant tre atment improvement, esp ecially in cr ucial equipment like pumps and motors, f ilters and chemical building systems. Equipment ef f i ci enc y will be a vit a l prior it y for facility operational improvement, said Leong. With treatment capacity expansion post-2020 on the horizon, market players should look out for pre-planning design and new tender ac tivities planned to t ake shape by t he end of 2020. New tre atment constr uction, it is li kely, would be defer re d until 2021. Prior ity being to clos e t he operational and business gap in c urrent water tre atment systems. The opportunity als o lies in t he re alm of desalinat ion, esp e cial ly in Australia and par ts of India and China. Pip ework, one of most underrated are as in t he water utility market, stated Leong would pave t he way for pip e inst allat ion using advanced technologies and nonsteel materials. On the consumer end, le ad-detec tion and metering could gain prominence. Smart water meter deployment and collab orat ions wit h digit al providers would be ess ent ial.
Waste management
Waste management segment can be called an outlier. Recycling practices, as well as waste collection and treatment measures, have only improved in the wake of efforts to prevent contagion spread and enhancing environmental hygiene. Looking at past trends, one will agree that waste trends have translated into excellent business
opportunities. Take the example of China. It produced 75 million tonnes of plastic waste in 2019 — the expected rise is to 78 million tonnes in 2020. The countr y plans to add ten rec ycling plants to the existing count of 138. In India, 15 million tonnes of plastic waste was reported in 2019 and is in all probability likely to register 17 million tonne levels in 2020. Notably, the EPR scheme introduced to support waste management was erstwhile unsuccessful due to the highly informal nature.
In terms of opportunities, one can take a cue from the Malaysian government’s mechanism of issuing a proof permit for plastic imports. “This provision of importing waste in Malaysia, can bring global opportunities to the rec ycling market globally,” opined Leong. He cited the landfill model as the largest in Asia pacific with rec ycling coming close at second. Recycling could well overtake landfill volumes. In terms of revenue generation, rec ycling stays the most significant contributor to plastic waste management streams and will most likely hold the fort until 2030. In 2019, an estimated 50 cities invested in waste management and recycling. Shortage of waste materials like PET is also a rising trend. To sum up, the five major focus areas will be IOT, upgraded rec ycling technolog y, smart supply chains, innovative design for sustainable packaging and collaborative rec ycling. No wonder, startups in India, China, Korea and Japan are already focusing on it. With China’s e-waste alone valued at an estimated 12 billion dollars in 2020, its upgradation to improve recover y rates assume significance. India and Southeast Asia could be the next hotspots for e-waste in 2020-21.
Smart supply chains will increasingly depend on advanced technologies like Blockchain. It has found relevance in the material rec ycling industr y. With Asia known to account for the highest global packaging materials, at about 40 per cent, startups have sensed an opportunity. In early 2019, the alliance to end plastic waste involves companies like Reliance and BASF in India. They could invest USD 1.5 billion between 2020-24. Post Covid-19, it could drop down to USD one billion. Opportunities in rec ycling especially in special economic zones, is a possibility.
Government reforms
For integrated sustainability, the government needs to incorporate economics, social and environmental aspects in climatic management. Frost & Sullivan predictions for 2020 and beyond expect water sources to be at risk. New software for providing water accounting to arrive at better water management decisions for industrial use is a promising domain. “The need of the hour is a collaboration of government bodies, private insurance firms, NGOs and related industry experts in the environmental markets,” he concluded.
To turn its plastic production sustainable, Lanxess AG has turned to circular economy based strategy. The objective is to ensure that throughout the production cycle, the raw materials used, lose the least value possible. The company is banking on the new ‘Durethan ECO polyamide’ product range to attain this goal. An alternative to the traditional linear economy, the circular economy improves competitiveness and resource efficiency. Future design, digital technology, preservation and extension of the produce, prioritisation of regenerative resources are few of the key elements to it. To make the quantum leap, Lanxess is using recycled raw materials in the production of its thermoplastic compounds and composites. Durethan ECOBKV30H2.0, ECOBKV35H2.0 and ECOBKV60XF are the most recent products developed in line with this strategy.
“ECOBKV60XF, for example, offers exceptional strength and rigidity for the manufacture of structural components such as front end, pedal
bearing brackets and A-, B- and C-pillars, as well as lightweight battery trays for electric vehicles,” states Dr Guenter Margraf, Global Product Manager- HighPerformance Materials (HPM) Business Unit, Lanxess. Known to possess material properties identical to the conventional virgin quality material, the new product range makes use of glass fibres sourced from waste glass. Recycled fibres manufactured from waste glass constitute 30 per cent, 35 per cent and 60 per cent weight respectively in ECOBKV30H2.0, ECOBKV35H2.0 and ECOBKV60XF. Notably, the glass is sourced from the waste leftovers of glass fibre production (post-industrial recycling). In another instance, Ecoloop certified by Ecocycle, under ISO 14021:2016 makes use of a high percentage of recycled material. This results in low greenhouse emissions. Using the mass balance method, Ecocycle examines the quantum of recycled material used in each compound along with the long-term potential of the waste stream.
Mass balance method
An initiative launched by the nonprofit organisation Ellen MacArthur Foundation, the mass balance method is used by countries globally to incorporate recycled raw materials into production with the petrochemical or mineral feedstocks. It is arithmetically allocated to the end product. Plastic producers conduct chemical recycling of post-industrial and post-consumer waste. Among key advantages is the ability to replicate characteristics of the finished product. The polyamide compound reinforced with recycled waste glass fibres is identical to the virgin material. In another example, an injection moulder can process the compound using existing facilities just like the conventional product enjoys the sustainability benefits of the certified product.
Waste glass fibres
The HPM unit of Lanxess is looking at saving energy and lowering CO2 emissions by capitalising on waste glass fibres as the sustainable raw material. The waste glass melts at lower temperatures than the raw materials used in manufacturing glass fibres.
Future development
Ambitious about gradually increasing the count of ECO product types certified under the mass balance method, Lanxess’s HPM wants to launch a new polyamide six with a glass fibre content of 30 per cent. Caprolactam required to produce this environmentally friendly polyamide 6 is based on a selection of petrochemical raw materials.