Businesses ready for challenges on circular economy transformation

Amid economic growth, the amount of resources countries consume is increasing and the quality of human life is negatively affected.

Most countries are therefore shifting to a circular economy model, striving to avail of sustainable production methods that restore, regenerate, and gradually reduce the amount of resources being exploited and limit emissions.

At the launch ceremony of the book “Circular Economy and Pioneering Models” on September 21, Nguyen Hoa Cuong, deputy director general of Central Institute for Economic Management (CIEM), said that with the urgency of implementing the circular economy model, national and regional governments had been taking drastic actions.

On the global scale, the EU has an action plan to support the transition process, promoting the control of products’ life cycle, simultaneously having in place a circular economy’s monitoring framework.

China has issued the Circular Economy Promotion Law, which is deemed a key strategy in economic and social development, promoting efficient use of resources, natural environment protection and sustainable development.

Simultaneously, the country has also enacted different management plans to improve environmental quality and accelerate environmental damage overhaul.

The success of circular economy models is not possible without the participation of businesses.

David Riddle - co-author of the book “Circular Economy and Pioneering Models” and CEO of Tan Hiep Phat Group

According to David Riddle, co-author of the book, and CEO of Tan Hiep Phat Beverage Group, the largest privately-owned soft drink provider in Vietnam, big corporations, especially multinationals, are actively transiting from traditional linear economy to a sustainable circular economy as this model brings multiple benefits to society and to businesses themselves.

Circular economy helps businesses ramp up business efficiency and is the outcome of innovation efforts and creativity. This model could bring competitive advantages for businesses that adopt it.

In today’s landscape, business partners increasingly demand strict sustainability requirements; users are also becoming more aware of environmental protection as well as exhibiting more sympathy to ‘green’ brands.

Vietnamese businesses are also found to increasingly apply this model to their business development.

Developing circular economy not easy

It is noteworthy that circular economy is a systematic approach, requiring the participation and close coordination of diverse actors in the economy. Besides favourable factors, Vietnam also faces myriad problems in terms of institutions, policies, infrastructure, science-technology, operating mechanisms, and market.

Riddle noted that reaching sustainable circular economy development targets was not an easy task, and even highly developed nations like Singapore have had to reconsider how they can successfully protect the environment and their resources, yet achieving circularity.

Tan Hiep Phat's cutting-edge production line

Riddle opined that businesses could expedite circular economy measures deemed crucial for the environment while still gaining significant business outcomes. In his words, cooperation is important to raise people’s awareness about the importance of implementing circular economy measures. This process can be time-consuming and require a change in the mindset of many generations.

The challenge persists with having the right infrastructure to do this on a large scale. It is time for business engagement.

For their part, businesses need a strong legal corridor with specific requirements about the responsibilities of manufacturers and distributors to recover, classify, recycle or pay waste management costs from products disposal.

Nguyen Si Dung, former chairman of National Assembly Office, ponders upon how to do to reach the desired goals in terms of recycled products and the circular economy.

“As Tan Hiep Phat CEO has mentioned, it is important for the state to craft a relatively sophisticated tax system. Along with that, the procedures on exploitation of primary materials shall be tightened, meanwhile those on recycling materials should be more easy,” Dung said.

Circular economy transformation: a resilient process

Recognising the importance of circular economy to ensure the sustainable development of the community as well as long-term benefits of society, many businesses have applied this model from early, going trailblazers and overcoming everything with persistent efforts.

Many have witnessed their efforts coming to fruition. One typical example in the beverage production segment is Tan Hiep Phat Group, shining with the process of transforming its business model, developing a circular economy leveraging the 3R (Reduce-Reuse-Recycling) strategy from 2013 until present.

Tan Hiep Phat's German aseptic lines

According to Riddle, Tan Hiep Phat’s initial success thus far in gearing towards a circular economy model is that the company has significantly reduced the amount of plastic used in the company's drinking water bottles.

For many years, Tan Hiep Phat has invested in German aseptic technology to ensure the highest product quality, as well as nutritional and health benefits for consumers. This technology also helps the company to reduce the amount of plastic used in the production process by reducing the weight of plastic bottles.

A decade ago, Tan Hiep Phat came up with an initiative to lighten the bottles, reducing the weight of each bottle by nearly 20 per cent.

At the same time, thanks to investment in aseptic technology, the company can also drive down the loss rate in the production process, along with reducing electricity, water usage, and plastic waste volume.

Over nine years, about 78,000 tonnes of plastic waste have been eliminated by Tan Hiep Phat. Other important measures include recycling and reusing plastic films from recycled plastic and plastic bags made by Tan Hiep Phat as multi-purpose bags.

Since 2021, the company has been operating a plastic recycling line producing pellets from plastic waste that Tan Hiep Phat can use; the pellets might be supplied to other units wishing to replace input materials for production with recycled materials in the future.

“Vietnam is famed for its beautiful beaches and bright, sunny coastlines. We must act now to conserve ocean life, preserve our beaches and our hidden tourism gems,” said Riddle in his closing speech at his book launch. “We must work together to reduce single-use plastic as much as possible. Tan Hiep Phat is ready to cooperate in solving the challenges ahead and do everything possible to reach a sustainable circular economy.”

Photo Contest 2023: Circular Economy is underway On July 15, Environment Magazine and C asean, together with the Vietnam Association of Photographic Artists, launched the Photo Contest 2023: Circular Economy in Hanoi.

New circular facilitates loan access: central bank The State Bank of Vietnam (SBV) has said its new circular has enabled clients to better access credit loans, thus ensuring a fresh supply of capital for production and business.

Robust strategy can aid circular economy Vietnam’s ambition to build a circular economy will be backed by a national action plan, with specific criteria for businesses to join and apply related solutions.