SCG: Pioneering for a circular economy

15:00 | 26/11/2019
A rapidly growing population coupled with continued fast economic growth have been fuelling the rising demand for resources and poses a significant risk of scarcity of raw materials, impacting people’s lives. SCG – one of the leading conglomerates in the ASEAN region – has been pioneering the circular economy in its global business to promote sustainable development for all.
scg pioneering for a circular economy
SCG Pioneering for a circular economy

According to figures released by SCG, the global population is expected to reach an estimated 9.7 billion by 2050, resulting in the rising consumption demand despite finite resources.

The data shows that Thai people produce an average of 1.15 kilogrammes of rubbish per person a day, and the waste generation rate is on the surge. In 2018 alone, Thailand contributed 28 million tonnes of waste. Without proper waste management and disposal practices, this tremendous amount of waste will leak into the oceans, triggering the loss of marine biodiversity, as was recently highlighted by the tragic death of young dugong Mariam.

The circular economy concept could help alleviate many of the environmental ails plaguing the globe as it promotes the regenerative model of make-use-return. This concept also includes the approaches of resource maximisation, waste separation, and proper disposal to preserve natural resources for the next generations.

The ongoing crises have been brought about by the take-make-dispose principle of the linear economy. The mountains of waste caused by nonchalant production have caused pollution and adverse environmental impacts at a degree where humanity is no longer sure they can be reversed. Circular economy is a regenerative approach that transforms the way of production, consumption, and lifestyle.

According to Roongrote Rangsiyopash, president and CEO of SCG, the increase in global population will inevitably impact the surrounding environment, by depleting natural resources, piling up marine debris, and intensifying global warming – to name but a few shocks.

“SCG strives to conduct its business by balancing economy, society, and the environment with strict adherence to sustainability, as noted in SCG’s four core values, of which ‘Concern for Social Responsibility’ means to guarantee the utmost benefits for all stakeholders. Furthermore, SCG has been recognised as a member of the Dow Jones Sustainability Index (DJSI) for 15 consecutive years since 2004 and was one of the first members from the ASEAN,” he said.

Manufacturers must be committed to environmentally friendly practices covering innovation and designing products and services, and business models while maximising resource efficiency to minimise waste and generate positive environmental impacts.

This also includes enhancing the efficiency of waste management to keep resources in the make-use-return loop.

Leading the circular economy

SCG is one of the few global groups which have been encouraging the circular economy and has been organising annual symposia for sustainable development for 10 years now.

Realising that the key to resolving environmental issues is for all stakeholders to garner the engagement of all stakeholders. To this effect, SCG hosted Thailand’s first Sustainable Development Symposium in 2010 and has continued to host the event annually ever since. The symposia have provided a platform to share knowledge from the youth to key opinion leaders hailing from more than 20 countries, with experiences from various sectors, including administration, the academia, and the private sector.

According to Rangsiyopash, throughout the years, SCG has shaped its business activities around circular economy principles by following three strategies. The conglomerate has been cutting resource use in manufacturing and product development while lengthening the lifecycle of materials. It has also been upgrading and replacing products and raw materials via constant research and development to achieve higher efficiency. SCG is also working to minimise resource usage or at the very least enhance recyclability so that it can feed by-products and waste back into production.

In 2018, SCG converted about 313,000 tonnes of industrial waste into renewable raw materials and turned 131,000 tonnes of industrial waste into fuel substitutes.

In 2019, the conglomerate continues to integrate circular economy principles into manufacturing and has set the target of cutting the production of single-use plastics from 46 to 20 per cent by 2025 and switch fully to the proportion of recyclable, reusable, and biodegradable plastics by 2025.

About SCG

SCG is one of the leading conglomerates in the ASEAN region, comprising of three core businesses: cement-building materials, chemicals, and packaging. SCG invested in Vietnam in 1992 and now targets most of their business here. So far, it has 21 subsidiaries and affiliates with over 8,500 labourers working in Vietnam.

SCG has been paying increasing attention to corporate social responsibility activities, strengthening the group’s commitment to rise along with the Vietnamese people. Each year since 2007, the SCG Sharing the Dream programme supports more than 40,000 Vietnamese students to continue their education. The effort does not stop at education and has been extended to other humanitarian areas, such as the renovation of the Ba Ria-Vung Tau School for Disabled Children and the SCG Sharing the Dream playground in Ho Chi Minh City and Ba Ria-Vung Tau.

Joining with different sectors and manufacturers

Apart from partnering with the global network of the World Business Council for Sustainable Development (WBCSD), the United Nations, and the Thai Chamber of Commerce to implement sustainable business practices, SCG has forged collaborations to develop innovation and technology to drive the circular economy.

Among the efforts, SCG’s building material arm has been working with the Global Cement and Concrete Association (GCCA) to mitigate the impacts of cement production activities and foster the engagement of all stakeholders throughout the value and supply chain.

Besides, it also partnered with Circular Economy in Cement Industry (CECI) to sow the seeds of circular economy principles in the construction sector to curb material waste.

At the local level, SCG has teamed up with businesses such as Supalai Plc. by launching a Recycled Concrete Road. This road was built by replacing natural aggregates with crushed waste concrete as a masterclass of the circular economy.

Additionally, SCG tied up with Sansiri Plc. by launching a common project on reducing construction waste and introducing precast wall solutions to replace the traditional brickwork system, completely eradicating material demand for installation. Similarly, SCG’s collaboration with Magnolia Quality Development Corporation creates extra values from leftover construction materials.

In its packaging business, SCG has participated in a global collaboration with A Circular Economy for Flexible Packaging (CEFLEX) to guide the industry towards flexible packaging as well as the development of eco-friendly packaging.

It has also partnered up with businesses to recycle used boxes and paper scraps in several sectors such as retail (with Tesco Lotus, CJ Express, and AEON Thailand), logistics (DHL, and Lazada Express), and banking and finance (Kasikornbank). These partnerships are also active in consumer goods with the involvement of Thai Beverage and CP Group, as well as in real estate development with Sansiri on board. Furthermore, it also partnered with S&P to introduce easily-recyclable packaging and promote the design of environmentally friendly packaging.

Especially in the chemicals business, SCG has worked with a series of businesses both locally and internationally, such as the Bill & Melinda Gates Foundation, IKEA, Starboard, and Dow Thailand Group.

Additionally, the corporation also collaborated with Bangchak Corporation to develop Greenovative Lube Packaging which transforms used lubricant containers into post-consumer recycled resins.

Last but not least, improving the lives of the communities where it operates is another key goal for SCG. To this effect, the company has been providing education in collaboration with the Department of Marine and Coastal Resources to small-scale fisherfolk. The collaborative network has launch Recycled Fish Home, turning plastic waste into fish homes. SCG has also been sharing its knowledge and promoting efficient waste separation and waste management methods to local communities across Thailand.

The 10th Sustainable Development Symposium in August 2019

The Symposium themed Circular Economy – Collaboration for Action was to forge collaboration between all sectors which will be the driving force for the establishment of the circular economy in Thailand, helping to achieve the country’s sustainable development goals.

The symposium was honoured to host General Prayut Chan-o-cha who joined the meeting to hear the waste management strategy proposal along with representatives from the United Nations, the WBCSD and leading organisations from Thailand and other countries to deliver solutions and thoughts on the circular economy. The event also featured discussions on the lessons learned from the successes in individual sectors for further implementation and action. Over 1,500 participants, comprising of executives from the government, small and medium to large business enterprises, the academia, NGOs, as well as local and international press, attended the event.

Long Son Complex to pilot circular economy

As the investor of the biggest petrochemical complex in Vietnam, SCG plans to make the $5.2 billion Long Son Petrochemical project in the southern province of Ba Ria-Vung Tau its pilot for circular economy applications in Vietnam.

Talking at the sidelines of the Sustainable Development Symposium in August 2019 in Bangkok, CEO Rangsiyopash confirmed that the petrochemical complex will be developed under the circular economy concept and that it will become one of the model projects for others to follow.

“We will build out the circular economy from within our organisation, by including it as our lodestar in all stages of the construction of this project. We have to make sure that this will be a good example and that all contractors and people who are engaged in the construction adopt circular economy principles,” he said.

Learning from this project, local authorities can start to engage local schools and vocational colleges to educate and draw in the participation of all students.

“The students of local colleges are very active. They are actually very good in adopting and understanding the concept of the circular economy so I look forward to promoting the model in other countries as well, and this can be a good example for everyone,” added Rangsiyopash.

The Long Son Petrochemical Complex lies just 100 kilometres from Ho Chi Minh City. The complex is positioned as Vietnam’s first integrated petrochemical complex and will boast a total olefins capacity of 1.6 million tonnes per year. Non-petrochemical supporting infrastructure, such as a deep seaport and other facilities, are also included. The business operations will strictly follow safety standards, be environmentally friendly where possible, and place great concern to the wellbeing of neighbouring communities and the general environment, pursuing SCG’s vision of becoming the region’s sustainable business leader and enhancing living quality for all.

By Bich Ngoc

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