Thailand’s government and private sector are coming together of late to pursue a range of efforts toward sustainability.
As one big step, the Thai government has decided on a five-year national strategy starting in 2021 – looking here to achieve what it calls a Bio–Circular–Green (BCG) economy, which includes the strengthening of agriculture and biotechnologies as well as the concept of a circular economy that makes efficient use of resources. And this is seeing a surge in the establishment and expansion of recycled resin plants. PTT Global Chemical PCL (PTTGC), Thai Shinkong Industry Corporation Ltd., major polyethylene terephthalate (PET) film manufacturer Polyplex (Thailand) PCL and more are looking to start up operations at recycled resin plants before the end of this year.
This comes as Thailand – home to various production bases for global manufacturers of consumer goods and more – faces demand growth for recycled resins. Even in the field of food and drink packaging, where the use of recycled resins is currently prohibited, the government is considering moves to lift this restriction.
Going forward, however, market growth for recycled resins will rely heavily on the ability to secure plastic waste to serve as a raw material. The crucial thing here will be whether companies can access a stable supply of plastic waste at a competitive price.
Wongpanit Panthong Co. Ltd., a major Thai waste management company, recovers used plastics and other such materials using a franchise system. With approximately 1,970 participants across the country, Wongpanit is able to treat plastic waste recovered through its nationwide network and supply various products – including pressed bales of waste polyethylene terephthalate (PET), as well as crushed, cleaned and milled used high-density polyethylene (HDPE) – in flake form to its customers.
At present, recycled resin plants in Thailand are able to secure raw materials in the form of plastic waste from waste recovery companies like Wongpanit. But given the spate of new and expanded facilities looking to make use of these raw materials, some players are voicing concerns that domestic plastic waste alone may not be enough to keep up supply. The Thai government has in turn started to consider a limited-time revision to its restrictions on plastic waste imports, with plans being for these to resume to an extent.
When it comes to securing supply of plastic waste as raw materials, it will be critical to improve not only on volume but also on price. The current system sees Wongpanit, for example, make publicly available daily updates to its purchase price for used plastics, basing these on the current market conditions for crude oil and virgin resin. The sale price of plastic waste processed by the company is then calculated by adding the likes of logistics and processing costs to this purchase cost. However, compared with countries that have broader social systems set up for recycling, plastic waste remains relatively expensive to procure in Thailand.
For the recycled resin industry itself to be sustainable going forward, plastic waste supply will need to become more stable in terms of both volume and price. The Thai government is therefore setting out to build infrastructure for the collection of plastic waste, with the Ministry of Interior leading the charge here.
However, it is the Ministry of Natural Resources and Environment that is pursuing legislation for the complete recycling of plastic products, and it is the Ministry of Industry that is in charge of overseeing recycled resin plants. Cross-ministry coordination will therefore be necessary if the country is to design systems for bringing about a circular economy.
Such coordination will in turn require that Thailand moves away from the vertical organization approach that is firmly rooted in the country’s government. But the fact that two model Thai companies are focusing on the recycled plastics business could well serve to speed up progress here.
Heading into this year, the Siam Cement Group (SCG) finished setting up demonstration facilities for chemical recycling, in which used plastics are broken down with heat to turn them back into monomers, or chemical raw materials. Meanwhile, PTT Global Chemical PCL (PTTGC) – part of the PTT Group, a Thai state-owned oil firm – is set to start up operations this year at a recycled resin plant based on mechanical recycling. PTTGC is also starting to work with Suranaree University of Technology on technological development for chemical recycling.
In the Thai industrial world, there is a common understanding that “PTT + SCG = Thailand,” as these two companies exert an impressive level of influence. So with both of these companies now starting to prioritize the recycled resins business – which will contribute to a circular economy – there is a chance that laws, regulations and the like will be set up at rapid speed to help out.