When it comes to sustainable development, several new concepts have been introduced, and the most popular one is, probably, the circular economy. Numerous enterprises in Vietnam have now taken to the new path, wielding the vision that it is the right approach if their future growth is to be sustained and the country’s economic prosperity is to be attained.
Unlike the linear economy that follows the traditional practice of “exploit-produce-dispose” plan, the circular economy requires pioneers to take a tough approach by changing their normal business processes, bearing higher costs, and adjusting their value chains among others. Although the less-traveled road is thorny and rocky, many have taken the first steps onto the long journey.
At Duy Tan Plastics, for example, changing the mindset is a painstaking one when it decided to develop a plastics recycling plant in Long An Province a couple of years ago. Producing plastic bottles from plastic wastes is starkly different from the company’s traditional manufacturing process of using virgin plastic grains as its feedstock. Apart from finding suitable technology for the operation of the facility, Duy Tan had to establish a network of agents to purchase used bottles, which is quite a challenging task. That is not to mention a huge headache over whether the company’s customers would accept the new products made from used bottles, says a company representative. Despite those concerns, Duy Tan still took the risks.
Duy Tan Plastics is just one among many enterprises in the domestic business community that have for years stepped out of their comfort zone into the hot water. The shift to the circular economy, thanks to the pioneering spirit, is gaining traction, and has captured widespread attention.
A circular economy is understood as a systemic approach to economic development designed to benefit businesses, society, and the environment by conserving and preserving natural resources in the most efficient way, in stark contrast to the “take-make-waste” linear model mentioned above. In a circular economy, growth is not necessarily associated with the consumption of finite resources.
At HEINEKEN Vietnam, the shift to the circular economy has been fast-tracked in recent years, and has earned the company recognition as the top name for sustainable development by local agencies and authorities.
The second largest brewery company in Vietnam has almost fulfilled its overall target, with up to 99% of its wastes being recycled or reused. All its wastewater has been treated to the Grade-A standard before being returned to the environment, while all solid wastes like glass, carton packaging paper, aluminum or plastics do not go to the dumpsite but are recycled and reused. An exemplary move at HEINEKEN Vietnam is its highly-rated project to collect oft-discarded bottle caps, and reprocess them into metal structures for building three small bridges in the country.
Last September, at a seminar on sustainable development, a representative of HEINEKEN Vietnam announced the company was swiftly moving to a carbon-neutral business, with five out of six breweries of the company in Vietnam having utilized all renewable energy in their production. Its latest plant in Ba Ria-Vung Tau Province is the first carbon-neutral plant in the region, using 100% of energy and heat from biomass.
The strong shift to the circular economy at HEINEKEN Vietnam is part of the global brewery giant’s endeavor to decarbonize all its production worldwide in the coming years. On April 15 this year, the group’s CEO and Chairman of the Executive Board Dolf van den Brink issued a press release, pledging to decarbonize its own production by 2030 and its full value chain by 2040.
“In this Decade of Action, we are committing to accelerating our actions to address climate change. We aim to be carbon neutral in our production sites by 2030 in order to meet the 1.5°C goal set by the Paris Agreement,” Dolf van den Brink said in the release.
Another front-runner in sustainable development is Unilever Vietnam, which has been widely known for its multiple community projects nationwide.
Speaking at a special function in Hanoi in December 2020 to award winners of the Top-ten Sustainable Enterprises 2020, Do Thai Vuong, vice president for sustainable development at Unilever Vietnam, noted that the corporation in 2020 had fulfilled its 10-year sustainable development strategy with the three pillars of two-fold growth, reduction of environment impact by half, and enhancement of community and society.
“Unilever Vietnam has resorted to 100% of renewable energy, cut water use by 43%, and eliminate all toxic wastes in its network of factories in Vietnam,” Vuong said. He added that the
company has helped improve living conditions for 22 million Vietnamese people, including training support for 3.7 million women, and via the micro credit program has disbursed more than VND350 billion for women.
Recognition and rewards
The pioneering spirit among many enterprises to move towards sustainable development has earned widespread recognition and rewards as well.
HEINEKEN Vietnam owing to its full-fledged commitment to the circular economy has been named one of the best performers in this respect. The company, for five consecutive years since 2016, has been recognized among the top three most sustainable companies in Vietnam by the Vietnam Chamber of Commerce and Industry (VCCI).
Similarly, Unilever Vietnam has also won the fame as one of the Top-ten Sustainable Enterprises 2020, which marked the fifth year in a row the consumer goods producer has won the title, since the ranking was first organized in 2016 at the direction of the Government. It should be noted that the assessment and announcement of the Top-ten Sustainable Enterprises is an annual program organized by the Vietnam Chamber of Commerce and Industry in collaboration with the Ministry of Labor, Invalids and Social Affairs, the Ministry of Natutal Resources and Enviroment, and the Vietnam General Confederation of Labor, which shows strong commitment of the central authorities towards sustainable development.
Sustainable development in general and the circular economy in particular, despite the high upfront costs associated with changes, has not only benefited the economy and the environment, but also brought about great values for enterprises concerned. A top executive at HEINEKEN Vietnam noted that “the circular economy also brings about great competitive advantages for enterprises as the approach helps them improve business efficiency and cut costs.”
For Duy Tan Plastics, spending up to US$60 million investing in the plastic recycling plant in Long An Province’s Duc Hoa District is costly, securing the input in terms of volume and quality – estimated at 22,000 tons in the first stage – is costly, and recycling used bottles is also very costly, but the rewards are also worthwhile. The company has secured or initiated contracts to supply recycled plastic bottles to several like-minded enterprises, including many long-time customers like Nestle and Lavie, and Unilever, although the plant just started commercial production in the fourth quarter last year.
Do Thai Vuong of Unilever Vietnam, meanwhile, asserts that the company’s sustainable drives have always created and improved positive values for the community on one hand, and helped the company maintain its growth tempo and its contribution to the economy.
“As a pioneer in sustainable development, we wish to share experiences with and inpire other enterprises so that sustainable development will become popular in Vietnam.”
In fact, sustainable development has been gaining popularity in Vietnam lately.
Last June, an alliance of packaging recycling called PRO Vietnam was established, with the participation of nine leading enterprises involved in packaging or production of items that require packaging materials, which all pledged to take steps to collect and recycle all such materials – at the rate of 100% by 2030. The initial stakeholders upon the establishment of PRO Vietnam included big names like Nestle Vietnam, Coca-Cola Vietnam, FriedslandCampina, La Vie, Nutifood, PepsiCo Vietnam, and TH Group among others.
After nearly one year, the list has expanded to nearly two dozen. The alliance has also managed to lure other non-packaging businesses into its waste-collection drive, with the latest being Novaland, which in this March signed a deal with PRO Vietnam to collect and classify wastes at all projects of Novaland in HCMC.
As the shift to sustainable development is gaining traction, enterprises in the country are becoming increasingly aware that many initial arguments on the costlier approach are not that right. Such a change of perception can be attributed to the pioneering spirit of many enterprises, which have taken the bold steps for the good of the community and the economy as well as for themselves.