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COCA COLA PIONEERS MASSIVE PET BOTTLE RECYCLING TO RID DRAINS OF WASTES– COKE BOSS

October 4, 2012

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Coca Cola, the world’s renowned beverage company has quietly embarked on a massive recycling of PET bottles that have adorned the Nigerian environment over the years. This programme was recently highlighted at the Consulate of the United States where the Lagos State Waste Management Authority show cased its recycling programme. However, at the event, it was clear that Coca Cola has silently become a pioneer in ridding our drainage channels and dumpsites of used PET bottles which are recycled into other valuable materials.  The Coca-Cola System has been working with a private company, Alkem, to achieve this vision. With nearly a billion PET bottles already retrieved and recycled, Coca-Cola is convinced the vision is achievable and is now rallying the beverage industry to collectively tackle this task. Kelvin Balogun, the equally quiet and unassuming Managing Director, Coca-Cola Nigeria who had always participated in jogging with Oshodi Isolo Local Government in a programme called ‘ Jogging with the Mayor” spoke with Tunde Akingbade on what the company has been going in the past few years and other related matters. Excerpts;

 

 

Q; The volume of PET bottles used by the bottling companies in Nigeria is growing rapidly and the water ways and environment are sometimes clogged,. What is driving this growth?

A; PET is the fastest growing packaging option in the beverage industry, and I suspect this may also be true in the food industry. For beverages this growth is driven by changing consumer lifestyle and preferences that emphasize convenience. The PET bottle fits very well in this context at home, outdoor or on-the-go. Unlike returnable glass bottle or can, PET bottle does not break or squash easily and the cap closure allows a consumer to have some quantity of the product and safely keep the remainder for consumption later.

 

From a manufacturing and sales point of view, being a one-way pack, the PET bottle is much simpler to manage because you do not have to deal with the logistics associated with the returnable glass bottle.

 

 

Q; How does the convenience of PET bottles compare to the perceived environmental risks?

A; The PET bottle itself is not a risk to the environment. The perceived risk arises from improper handling. If the bottles are not disposed of in a proper manner by consumers and other users they easily constitute the kind of risk that we see around us such as litter on our streets or clogging of drainage channels. This is why we need an effective waste collection system that focuses on the point of use as well as an adequate recycling infrastructure. At Coca-Cola, we are dealing with this challenge through the large scale PET recycling project co-funded with NBC, our bottling partners.

 

Q; How did Coca-Cola get involved in recycling PET bottles?

A; PET packaging was already widely used in Nigeria, mostly for bottled water, in 2005 when we launched our sparkling soft drinks in PET packaging. One of the issues we had to deal with at that time was the fact that used PET bottles were already a visible part of litter in the streets and drainage channels. We resolved to be the solution and not part of the problem. That gave rise to our commitment to walk our talk on environmental stewardship by starting a post-consumer PET bottles recycling project. For us, it was not a choice but a necessity borne out of the global commitment by the Coca-Cola Company to treat all our packaging not as waste but as valuable materials for future use. This made recycling an imperative.

Q; Did you have to set up a factory for the recycling project?

A; Thankfully, we did not have to go that way. After a fruitless search for a technical partner in Nigeria, we reached out within our global Coca-Cola network for leads. Fortunately, Coca-Cola South Africa was already involved in a similar project and it happened that the recycling company they partnered with also had operations in Nigeria, where they recycled mostly baled PET bottles imported from South Africa. Fortunately, they had the machinery, some spare capacity and the willingness to meet our need. That was how our partnership with Alkem Nigeria Limited was born.

Q; What was the most challenging aspect of pioneering this project?

A; Alkem had not yet established the logistics at the time for collection and buyback of locally used PET bottles. Solid waste management in the country lacked effective point of use collection system which meant that the bottles would be picked from the streets and dumpsites in a soiled state. This situation complicated the collection process and made recycling more costly because of the level of cleaning and sanitization required. It made more business sense therefore for Alkem to focus on recycling virgin materials and imports from South Africa.

 

That limitation was resolved when Coca-Cola came on stream and committed to provide an agreed level of buyback subsidy to enable Alkem commence and sustain the collection and recycling of locally used PET bottles. Together we developed an effective collection and buyback model for locally used PET bottles, and Coca-Cola also financed the setting up of the first two Collection Centres in Lagos. However, the bulk of the PET bottles are still got from the dumpsites till date and so that challenge has remained, not to add the challenge of trucking the materials from different parts of the country to the recycling plant in Lagos.

Q; How has the project fared over the years?

 

A; Alkem as operators of the recycling plant has done a very good job of leveraging our buyback subsidy to grow the project. The Collection Centres have increased to 22 across 10 States and the volume of used PET bottles collected and recycled have grown year on year, reaching about 5,600 tons in 2011alone which translates to about 280 million bottles. Cumulatively, we have recycled about 20,000 tons to date – almost1 billion PET bottles – and these are not only bottles of Coca-Cola brands but bottles from all sources including competition. Imagine what the impact would have been if this number of bottles were still left in the environment.

 

Apart from reducing the volume of PET bottles in the environment, the recycling project provides sustainable employment for about 1,800 persons including independent pickers and workers at the Collection Centres and the recycling plant. It also produces

synthetic fibre, a valuable raw material used by various industries to make furniture, building insulation, automotive components, etc. The project clearly demonstrates the multi-dimensional benefits of a “waste to wealth” culture. 

Q; How does your recycled volume compare to the national PET output?

      A; The annual output of PET packaging in the Nigerian beverage estimated at15,000 to 20,000 tons. In 2011 we recycled 5,580 tons or about 280 million bottles, more than 20%increase over the volume recycled in the previous year. This is a very significant achievement requiring a lot of investment, and it represents far more than half of our company’s PET output last year.

Q; Are others involved in similar projects currently?

A number of small entrepreneurs are collecting and baling PET bottles and some chop them into pellets for export. The Coca-Cola and Alkem partnership set up the first large scale collection infrastructure since 2005 which is also the first and so far the only functional full process bottle-to-fibre recycling project in the country, producing synthetic fibre to feed local industries.

 

Within the beverage industry, Coca-Cola and NBC, our bottling partner who signed up as co-funding partner in 2009, remain the only companies involved in this project to date. Lately, however, three other major beverage companies have indicated strong interest to join us. We are hopeful that they will effectively come on board in the coming weeks.

Q; Does Coca-Cola or the Nigerian Bottling Company have equity or other financial interest in Alkem?

A; Neither Coca-Cola Nigeria Limited nor Nigerian Bottling Company Limited has equity or any financial interest in Alkem Nigeria Limited, and we are not involved in any profit sharing scheme with Alkem which is a privately owned business. Our relationship is that of collaborating partners.

 

We are often asked what we gain from the substantial sum we commit to this project annually. For Coca-Cola and NBC (known collectively as the Coca-Cola System), our annual spend on this project by way of subsidy to Alkem is a social investment to promote sustainable environment. We see the long term sustainability of our communities as an imperative. This conviction is ingrained in the Coca-Cola Live Positively culture that makes sustainability a part of everything we do everywhere we operate. We are also encouraged by how well Alkem has managed and grown the project and this is why the relationship has endured for almost seven years.

Q; Why do you buy back bottles of other companies rather than focus on your own bottles?

A; We get asked this same question all the time. The simple answer is that our concern is to have a cleaner environment. Even if we succeeded in retrieving all our own bottles and there are still some PET bottles from other companies out there, we would have failed in our objective.

 

 

Q; At what stage did Coca-Cola decide to involve other partners and what has been the response?

A; Our goal from the onset has been to create an alliance of all PET industry players, including beverage and pre form companies, to collectively deal with this challenge. We started reaching out to some industry players beginning with the big companies, I think, about a year afterwards when the project had stabilized. While their response has been varied but generally positive, only our bottling partner (NBC) has effectively signed on with financial contribution since 2009 and this has been a boost.

 

As I mentioned earlier, we are hopeful that three other major players would be joining us in the coming weeks and we know that many others, especially the big companies, will eventually come on board. Given the reach and volume that only three existing partners have been able to achieve, we are confident that with more partners contributing to this project, the bottle collection and buyback scheme can be extended nationwide and the volume tripled in the medium term.

Q; Why did Coca-Cola go it alone rather than wait for the industry to tackle the challenge?

A; As a company we were motivated to start the recycling project in 2005 by our beliefs and values that emphasize demonstrable environmental stewardship. The best way to sell an idea apart from showing the value is to prove that it can be done, and that is what Coca-Cola has done with the recycling project.

 

Furthermore, our status as the beverage industry leader inspires us to lead by example; but we do not kid ourselves that the current partners (Coca-Cola, NBC and Alkem) can sustainably deal with this industry challenge to the exclusion of others. As a company we value the power of partnership and this is our preferred model, as evidenced by our water and many other sustainability programmes.

Q; How has government supported your recycling project and what are your expectations from them?

A; Generally, government at all levels have been appreciative and supportive of the recycling project as they recognize that it represents a major milestone in the evolution of solid waste management in the country as well as a model of how the private sector can effectively support government to tackle some of the knotty issues in our national development process. Obviously, the Lagos State Government, particularly the Lagos State Waste Management Authority (LAWMA) and the Ministry of Environment, stand out for the level of interaction and support we get from them by virtue of Lagos being the base of our recycling project.

 

As is well known, LAWMA is way ahead of many other states in the plan and efforts to improve the effectiveness of solid waste collection and management. But there is still a long way to ensure that waste is sorted, separated and gets directly to recyclers without ending up at the dumpsites. But it must be emphasized that as consumers, individuals and companies we all have a role to play in achieving this desirable situation and again LAWMA is doing very well in sensitizing people to this responsibility through their increasingly effective public enlightenment campaign.

     Q; How do you see this project evolving in the next five years?

A; Our vision is to build an effective nationwide recycling economy that would ensure that our streets, drains and dumpsites are rid of PET bottles in particular. And we see this happening in two stages, beginning with the formation of an effective PET industry alliance to scale up recycling leveraging the achievements of Coca-Cola and its partners so far. This will culminate into a self-sustaining business model that will be driven by private investors, as is the case in many developed countries.

 

The industry alliance that we envision and are promoting will also provide a robust platform to actively support government in creating recycling awareness nationwide and developing a simple and effective point-of-use-to-recycling collection system.

Q; Coca-Cola and Nigerian Bottling Company jointly won “Most Socially Responsible Company Award” in 2011. What are you doing to retain this coveted status?

A; Such awards recognize and reward the impact we are making in our communities, and we are pleased by and grateful for the many awards we receive each year from various stakeholder groups.

 

For the Coca-Cola System, our commitment to invest in sustainable development is driven by the belief that our business is only as strong and sustainable as the communities in which we operate. Consequently, making a visible impact that makes a positive difference in the wellbeing and prosperity of our communities is what we aim to achieve with every social investment programme. If in the process we happen to win an award, then that’s an icing.

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