· Multiple speakers at the ChinaPlas conference in Guangzhou (one of two major global plastics events) spoke regarding the need for the industry to address public worries around plastic waste – or risk future growth.
· This was a big change in tone for a conference that has traditionally focused on the growth prospects from the expanding middle classes in Asia.
· Various machinery companies talked about stepped up efforts to find new technologies that can handle lower grades of recycled plastic. Material makers discussed efforts to use more recycled plastic and efforts to improve waste collection infrastructure.
· Various industry speakers highlighted the Chinese National Sword programme (banning imports of some plastic waste) and the growing public pressure worldwide. As a result the brand owners are now telling the plastics industry to “come up with wholesale solutions”
Analysis and Comments
· There has been much debate around the economics of the “right” way to address the current situation Good intentions but unintended consequences and Is the moral argument for plastic recycling the wrong way to go
· From an investors perspective, this misses the point. Regulation is coming. Politicians, the elected representative we appoint to “make the system work for us” are responding to public pressure through pretty much the only tool they have – new laws & new taxes.
· It might not be the best way to solve the problem but until the private sector shows that it has a better way, we can only expect more regulation.
· Analysts’ expectation is that as plastics recycling & reuse becomes mainstream, costs will fall. On a mid term view this could become a really interesting commercial opportunity for those companies willing to adapt.