18 Nov 2013
When eco-worlds collide: saving the planet while saving on costs
This year's Eco-Asia Expo saw a mix of idealism and enlightened capitalism, with an added sprinkle of a certain cynicism…
The Eco Asia Expo Fair is perhaps unique among the Hong Kong trade shows. Here commercial opportunists happily rub shoulders with those looking to save the world and – for once – there may, occasionally, be a genuine overlap in their interests.
A look around this eighth iteration of the event reveals a telling mixture of European consulates and Asian companies. The latter are keen to promote their individual ranges of waste management, water cleansing and recycling, cleaning, LED lighting, energy saving and bio-degradable plastic products. The former are merely there to try and commercialise a little first world wisdom and promote their domestic environmental solutions to the huge Asian market.
Perhaps tellingly, there are few consumer products on offer at the fair, an indication that business legislation is driving environmental awareness on the mainland (the key market for everyone here) rather than any spontaneous mass movement by concerned citizens. There is, of course, a substantial contingent of mainland companies present, while four Chinese cities, including Guangzhou, have pavilions here – a testament, perhaps, to their green commitment.
This dichotomy between the green imperative and a desire to cash in on the vast sums committed to eco-spending on the mainland is everywhere apparent. So, too, is an acceptance – with varying degrees of grudgery – that mainland businesses have to shoulder the government-imposed eco-burden.
Daniel Da Costa is a manager for JBS S/A, a Brazilian-owned leather tannery in Jiangmen in southern China. Describing the green obligations his company now faces, he says: “We are licensed by the authorities and they limit us as to what products we can use. It used to be far freer, but the authorities have really clamped down and fines are commonplace.
"We have a lot of waste water, which we re-use for toilets or washing floors, but we really want to manage it better." Da Costa was attending the event partly in hope of identifying a partner company with the right technology for his needs.
With Da Costa duty-bound by legislation, but seemingly also intent on finding ecologically-sound solutions, other buyers seem driven more by cost and expediency. A manager for Shenzhen Grand Skylight Hotel Management Co Ltd, Hans Huang, has come to the Eco Expo in search of efficient and cost-effective electrical products, particularly air conditioners.
Explaining the thinking of his company, he said: "In the bigger cities, companies are increasingly thinking about the environment. While we’re pleased if we can do something good for the environment, cost remains our main focus."
The twin appeal of saving the environment while saving on costs was also highlighted by Jerome Laboulais, Business Development Manager for Greenware, a Hong Kong-based environmental monitoring specialist and an exhibitor at the event. While acknowledging the high level of investment available for environmental solutions on the mainland, he still has some reservations. He said: "If a product is efficient and saves money in the long run, there’s usually an interest. If the return on investment (ROI) is more than three years, it’s a tougher sale though." Unsurprisingly, he maintains that interest in cost-saving energy conservation products grew dramatically after the advent of the 2008 financial crisis.
Perhaps reflecting the rapid shifts on the green landscape, Greeware sees one of its key products – the Light Eco Plus – as likely to be obsolete within 10 years. Marketed as an "interim energy saving product" and, crucially, offering ROI within three years, it can be retro-fitted to an existing electrical panel, reducing electricity usage by 25% for each T8 bi-pin fluorescent tube. Future eco-designed systems, however, will make such bolt-ons superfluous.
While Greenware is finding a market in offering quick-fix solutions to immediate problems, a number of buyers are looking for longer-term solutions. Pankaj Bedi, Chief Executive of Ronex International, a Dubai-based trading company, was in Hong Kong to identify recycling and disbursing treated water solutions.
Identifying a need to get ahead of the game, Bedi said: "Environmental responsibility is the new way – if we don’t change now, we’ll have to do it later."
Bedi's particular concerns relate to a new housing development his company is working on in Africa. He is confident that the Eco Expo has delivered the answers he is seeking. He said: "The fair is small, but I think the main solutions are here – we've found some potential partners already."
Although the event may not yet be the largest of its kind, a number of potential exhibitors were clearly impressed enough to consider signing up for 2014. Martin Ma is a senior executive for Broan Building Products (Huizhou) Co Ltd, a residential ventilation specialist based in Guangdong. Sensing the marketing is ripening, he plans to exhibit next year.
According to Ma, many of his clients across the mainland are understandably keen on breathing cleaner air – especially in Beijing – but also retain a clear financial awareness.
Looking to future developments, he said: "The mainland is set to introduce a further tranche of environmental laws, so many businesses and individuals are preparing in advance. Air quality, water purity and waste management are all becoming increasingly important issues on the mainland.
"The middle classes and the more affluent are now willing to pay more for solutions in these sectors, both at home and at work. Even those with smaller incomes are concerned, but spend largely on the cheaper mainland brands."
The fact that affluent mainland consumers have more faith in international brands than in locally-produced products is hardly revelatory and is a phenomenon certainly not restricted to the eco-sector. It is, however, making a distinct impact there.
Tony Ho, General Manager for the Hong Kong-based Osmosis System Group, an importer of South Korean water filtering products, sees his target consumer as the more well-heeled mainlander. He said: "The mainland is, of course, a huge market, especially in light of the ongoing problems with water contamination. We exclusively target middle and upper class consumers as many of them simply don't trust locally-made products."
In terms of the domestic Hong Kong market, Osmosis has worked with a number of NGOs over the past four years in a bid to promote the low carbon advantages of filtered water over bottled water. According to Ho, Hong Kongers have greater awareness of this than their mainland cousins. This has seen Osmosis secure contracts with a number of local companies (with 100 staff members+), as well as providing services for residential clubhouses in several Sun Hung Kai properties.
|Biodegradable beakers and non-environmentally damaging dishes.|
Aside from the major life and health-changing opportunities offered by major green initiatives, such as water purification, other companies are seeing a market in providing eco-friendly lifestyle products. Kowloon-based Renew Cleansing sells a range of green cleaning products, ranging from pet and hair shampoos to bath salts and vegetable rinses. Like virtually every other company in the sector, it is only too keen to make inroads onto the mainland, but it does have concerns about going it alone there.
Martha Yuan, a sales executive with the company, said: "Mainland people are very willing and able to spend on environmental products and we receive a lot of interest. They want to use our products to express their personalities and beliefs."
As well as directly selling its products, the company was hoping to identify suitable mainland distribution partners over the course of the fair. Yuan said: "At present, there's not enough environmental awareness on the mainland for us to enter the market directly, even though consumers there can certainly afford our products."
One thing that seems clear from the fair is that Hong Kong (and many of its businesses) has a real edge over the mainland in terms of environmental awareness. One clear indictor of this is the success of companies like EcoSage.
EcoSage is a Hong Kong recycling business founded by Felix Chung, a young eco-entrepreneur. Initially, his business struggled to survive in Hong Kong, partly due to a high levels of domestic competition and partly because, at that time, recycling was intrinsically unprofitable.
Ultimately, he reinvented his business as an "e-waste" specialist – one focusing on recycling the vast amount of electronic items discarded in Hong Kong every year. Chung said: "We currently handle 80-90% of Hong Kong's e-waste from Hong Kong, recycling it and extracting any useful raw materials."
With the Hong Kong government planning to grant its e-waste management license to just one company in 2015, Chung has high hopes that EcoSage will be the one to secure it.
Another business keen to capitalise on Hong Kong's green sensibilities is the Top Fine (HK) Industrial Company Limited. Originally from Hong Kong, the company has been focussing on the US for the last ten years, but has now returned home on a mission to introduce its biodegradable take-away receptacles to the domestic market.
Top Fine only use materials like CPLA (cornstarch), bagasse (sugar cane) and ovation (oat and wheat), all of which are said to be less environmentally-damaging than plastic. All of its products have been designed to be biodegradable within 60 days, are microwaveable up to 120 degrees and are entirely reusable. Among its clients is the Café de Coral fast food chain, for whom it makes proprietary custom soup bowls and rice boxes.
Despite the successes of many Hong Kong companies and the obvious potential of the massive mainland market, there remains a degree of cynicism in this apparently most idealistic of market sectors. Greenware's Laboulais, for instance, has his own reservations about the China market and, more specifically, about the presence of so many mainland buyers at this year's event.
He said: "While you can see that mainland buyers are clearly interested in this kind of technology, it is only too possible that their real interest lies in copying the ideas they see here. They may see this as far more important than genuinely finding any new business partners."
Perhaps worryingly, perhaps providing a degree of reassurance, it seems that opportunism in the eco-sector may not be solely a mainland problem. Hamish Low, Head of Development and Production at Golden Power Manufacturing Ltd, a Hong Kong-based exporter of electronic consumer goods, confesses himself cynical about the whole environmental sector. He said: "At our Hong Kong manufacturing facility, we genuinely want to do better than the minimum set of environmental standards, so I'm here for ideas. When it comes to our clients in the US, however, they really don't care. They only want the cheapest solutions we can offer."
|Renew: green cleaning from Kowloon.|
The eighth Eco Asia Conference and Eco Asia Expo took place on 28th to 31st October 2013, at the Asia-World Expo. Organised by Hong Kong Trade Development Council, the event attracted 297 exhibitors. According to the organisers, 12,952 buyers attended, representing a 25% rise on 2012.
Vickie Chan, Special Correspondent, Hong Kong