Why Tetra Pak signed recycling investment deal with Onward Paper Mill
FMeaning of the agreement or the interest of the environment and sustainable future, Tetra Pak, foremost food processing and packaging solutions company recently entered into recycling agreement with Onward Paper Mill to develop sustainable recycling solutions for post –consumer beverage cartons in Nigeria.
The agreement, which aims to build Tetra Pak’s sustainability effort and proper management of Used Beverage Cartons (UBC), educate the public on waste management, while supporting local regulations and responding to customer demands is laudable, especially this time there is focus on sustainability to protect the future for generations yet unborn.
The partnership will focus on reducing the presence of UBC in landfill and other waste dumps by engaging in public awareness and supporting the targeted collection of UBC from the consuming public through various campaigns and initiatives in schools and communities.
Under the initial three-year partnership, Onward, a 68 year- old paper trading company that evolved into Onward Paper Mill will recycle the Used Beverage Cartons (UBC) for use as a base raw material in paper production.
The agreement to protect and free the environment of UBC has become key and essential in Nigeria as globally, most nations and their government ensure that manufacturers take care of what they produce in order to obviate polluting the environment.
“As a responsible organisation, Onward has always focused on recycling not just our waste product but even post-consumer waste products. I am quite happy that Tetra Pak is taking a great initiative to ensure that its products -beverage cartons are recycled in Nigeria”, Kunle Obagun – Executive Chairman Onward Paper Mill Ltd.
Apart from protecting the environment which is significant for future existence, Obagun said the new partnership with Tetra Pak will create employment for Nigerians. Presently, Nigeria’s unemployment rate stands at about 27% of the working population.
“In terms of recycling, Onward is not new to recycling activities. For over 25 years we started recycling our waste products to convert into tissue thereby not just being environmental friendly, but using the opportunity to create employment and divest products”, he said at the signing ceremony.
The Onward Paper Mill executive hopes that by end of third year of the agreement, his company will be able to recycle at least 50% of used beverage cartons that is available in the country.
Obagun hinted that recycled products tend to be a little more expensive. “Part of our commitment is to absorb some of the increased costs to consumer. For instance, a lot of our exercise books are made from recycled products. We have taken initiative to drop profits for the sake of sustainability”.
With strong believe in recycling to protect the environment, Obagun said recycling and paper disposing are a culture that needs to build from youth. He did not say the value of the deal but said both organisations have made investments to the recycling effort.
On his comment, Aruna Oshiokamele, Managing Director, Tetra Pak West Africa said, “We protect our planet by contributing to the circular economy in recycling all packaging materials collected. Through our efforts we have helped to grow the number of facilities that recycle cartons from 40 in 2002 to 170 today, globally’.
“At Tetra Pak, Sustainability has long been at the heart of our business strategy and our operations both globally and locally. Our approach to sustainability encompasses our entire value chain – including the environmental, social, and economic challenges we face. From our School Feeding Programmes to our circular economy commitments, to our Diversity and Inclusion initiatives, we constantly strive towards safeguarding our own employees and supporting communities where we operate and protecting the future of our planet and the long-term success of our customers”.
On the choice of Onward Paper Mill for the recycling job, Oshiokamele said Tetra Pak which is part of food and beverage alliance on sustainability has been looking for the right partner to support its sustainability initiatives. According to him, Onward represents a company that is forward looking in terms of paper product and backward integration.
He explained that the partnership with Onward is just part of many activities of Tetra Pak on sustainability. “We have actually started with sustainability many years back as we have partnered other organisations and schools on sustainability”.
Speaking on the challenges confronting the packaging business, he said the industry is not immune to forex, infrastructure and other operating challenges confronting manufacturers in Nigeria.
Environmental Sustainability
Over the years but especially since 2015 when the United Nations General Assembly designed a blueprint called Sustainable Development Goals, SDGS to achieve a better and more sustainable future, there has been increased attention by corporations on the environment.
Many companies are therefore investing and making a commitment to incorporate social, environmental, economic and ethical factors into their strategic decision-making. This is understandable to avoid depletion or degradation of natural resources and allow for long-term environmental quality as the corporations’ existence largely depends on the environment.
Research reveals that “Corporations have come to understand that their abilities to prosper hinge upon their responses to the challenges of a carbon-constrained world and an array of other issues on the sustainability agenda”.
A document by PWC states that most forward-looking businesses understand that the traditional trade-off between sustainability and profitability is an outmoded perspective. “They know that operating sustainably is a mindset with a focus on the creation of long-term shareholder value. These leaders evaluate the spectrum of sustainability issues and respond by mitigating risks and leveraging opportunities.
“They also understand that the sustainability agenda requires working collaboratively with all stakeholders —from suppliers and customers to employees, shareholders and governments.
Corporations are therefore deepening their concerns and projects for the environment beyond donations and on-the-surface attentions. If such attentions are not given to the environment today, it is obvious that the future will be bleak and unwelcoming for individuals and for corporations in the near future as the depletion of the environment is correspondingly with growth of world population.
As human activities, occasioned by increasing population and lack of awarenes negatively affect various parts of the Earth, such moves by Tetra Pak and Onward, coupled with other sustainable initiatives by various organisation are encouraged to protect the environment and life.
Technology is transforming Africa. It’s improving so many aspects of everyday life, providing access to new opportunities and increasing social mobility. However, the wave of digital innovation in Africa has not, until now, had the same impact on the automotive industry.
Buying and selling cars in many parts of Africa is still a complicated, time consuming and unnecessarily costly process. The task of maintaining a car is also just as unsatisfactory. The entire process has remained largely analogue, while other processes have gone digital. For example, commercial mobility across the continent has been significantly digitised, as seen by the advent of ride-hailing and ride-sharing platforms. Yet conversations about how we can innovate and introduce more technology to the automotive industry as a whole barely gets any airtime.
Building trust and transparency
The African used cars industry alone is worth $45 billion, with nine million cars traded annually across the continent (one million cars are traded in Nigeria). There are great opportunities in the industry. However, lack of trust and transparency means people are hesitant to engage. For example, anyone that has ever bought, sold or maintained a car on the continent will be familiar with the informal nature of the industry and the opaque pricing and quality assurance structures that come with it. There is often no objective way or local price book to ascertain the value or quality of the car that is being bought or sold. Data around vehicle ownership, verification and dutiable value paid is still pretty much fragmented. As a result, buyers and sellers often have to take extra precautions to ensure that they don’t get ripped off.
Just as with other industries across the continent, technology holds the power to address the challenges and explore new opportunities in the automotive industry. For example, a tech-enabled approach makes it easier to verify buyers and sellers to make sure that only serious individuals are engaged. The adoption of an escrow model can also make it easier to secure the exchange of products, services and money. The big question, however, is how do we take a totally offline system online? The short answer is to take it one segment at a time, and to make sure that the online offerings are improving consumers’ offline experiences.
Enabling more value-added services
Technology allows us to connect the dots within the automotive trade, making the entire process not only secure but seamless. It can also enable quicker access, greater choice and more opportunities to integrate other value-added services to the experience.
Buying a car is a significant investment for most people. Apart from the financial investment, buying a car also means setting aside the time to source and verify the car, as well as organise insurance and, possibly, explore finance options. At the moment, these activities are generally available from different providers which means potential buyers have to engage with each provider separately to get the service they desire. A tech-enabled approach makes it easier to access these services in one place. This approach will provide the opportunity to save money and time which means more of it can be spent enjoying the benefits that come with having a car, rather than enduring the process of trying to get one.
Improving the customer experience
In a system where car dealers and buyers have been traditionally underserved, technology provides the opportunity to make the most out of the market. For example, Nigeria has over 21,000 registered car dealers, Ghana 8,000 and Kenya 13,500 and countless informal operators who deal on the fringes without any structured support. Everyone is basically doing their own thing and there is very limited transparency. Technology provides the potential for standardised pricing structures, greater access to inventory and opens the door for expansion.
By adopting a tech-enabled approach, dealers can also improve the customer experience through valueadded services such as background checks, vehicle financing, insurance and in turn improve their business prospects. The sheer size of the market and the breadth of the automotive value chain means there are many opportunities for partnerships and collaborations
Adopting a tech-enabled approach provides the platform for building the trust and transparency that the automotive industry needs to grow consumer confidence and expand. The demand for cars exists, and we have a steady supply. However, without effective and efficient structure, consumers will always be hesitant to engage.
The value creating opportunities in the digitisation of the African automotive industry are too big to overlook – think about the social impact across the value chain - vehicle financing (banks, micro-finance banks and fintechs), auto repairs (technicians, detailers, fitters) import services (third-party logistics providers) and aftermarket service providers (OEMS, spare parts, products and service providers) on one hand and (job creation, merchants, dealers have liquidity to trade or invest, their dependents also benefit from the value that is being created).
It is very heart-warming to read about the Nigerian government’s acknowledgement that the development of its automotive industry is a marathon and not a sprint as well as its commitment to partnering with the private sector to redefine the industry. Players like Cars45 are well poised and positioned to lead the charge in defining the future of automotive trade across the country and the continent by providing corporates and consumers with a brand experience that helps them with smarter choices.
We’ve already seen the transformative power of technology and the opportunities it has created across other sectors on the continent. With the right approach and by prioritising the right things, the automotive industry could soon be enjoying similar benefits.
Soumobroto Ganguly is Chief Executive Officer, Cars45, Africa’s foremost automotive tech-enabled platform that connects buyers and sellers across the continent