Investing in a sustainable manufacturing sector for Thailand
Image: Cobalt S-Elinoi / Shutterstock.com
Anne-Marie Hardie presents an overview of Thai investments in the circular economy, and sustainability initiatives that are helping to ensure a thriving manufacturing sector in the country
Thailand’s robust manufacturing sector has continued to accelerate over the last five years responding to the increased demand for metal packaging. According to the Thailand Aluminum Association, there has been rapid development in the Thailand aluminium industry, with anticipated double-digit growth over the next few years, at an estimate of nearly one million tonnes. However, one of the critical challenges the country faces is that it remains dependent on imported raw materials, specifically primary aluminium, as it cannot produce aluminium ore. This dependency has helped to increase momentum on sustainability initiatives within the country, including recycling and developing a circular economy.
In its 2019 report, The Association for Packaging and Processing Technology stated that Thailand has one of the most advanced food processing industries in Southeast Asia, which is supported by a robust manufacturing sector. In 2017, Thailand’s food industry, which included local consumption and exports, was valued at US $102 billion, with exports of beverages reaching $1.9 billion in 2018. Currently, Thailand imports most of its packaging machinery, which is valued at $300 million.
The last three years have not been without their challenges; the war, US inflation, and the economic slowdown in China have profoundly impacted Thailand’s economy, as reported by World Bank in their April 2002 report, Braving the Storm. In addition, Thailand’s dependency on imported energy and raw materials has made it vulnerable to supply chain disruptions and commodity pricing. However, the shifts in the trade landscape have presented an opportunity for Thailand’s manufacturing sector to step in.
Rayon Works, UATH, began construction in Thailand in 2012, responding to the country’s developing manufacturing sector, specifically automotive and cans, setting the target of 320,000 tonnes per year. Recognising the growth potential in Thailand, Japanese company UACJ established a research and development division in October 2018. UACJ reported in the first quarter of 2022 that the demand for can stock in Thailand remained robust, resulting in record sales for their can stock. Sustainability remains one of the company’s primary initiatives, including signing an agreement with Kansai Energy Solutions, Thailand, to install 40,000 photovoltaic panels on the rooftop at Rayong Works, the aluminium rolling and manufacturing facility in Thailand. This project is anticipated to reduce carbon emissions production by 14,000 tonnes each year.
The manufacturing sector in Thailand continues to strive toward adopting greener technologies, focusing on developing a circular economy and reducing carbon emissions. However, whether Thailand can meet its global commitments to reduce carbon emissions is highly dependent on adopting a model that is focused on sustainability and innovation. World Bank reports that the Thailand government has adopted a Bio- Circular-Green (BCG) economic model. The implementation of a circular economy model will not only reduce the manufacturing sector’s carbon footprint, but could also help reduce Thailand’s dependency on imported commodities.
Established in 1996, Thai Beverage Can Limited prides itself in being a leader in sustainability, which includes development goals in all three dimensions, social, economic, and environmental. The company’s circular economy strategy includes selecting suppliers that use a high percentage of recycled aluminium in their aluminium coil, helping reduce the amount of raw materials used. This Thai American joint venture with Ball Corporation includes seven production lines, employs over 500 individuals, and has an annual production capacity of over six billion cans. In addition, the company strives to be an innovative packaging partner by offering clients a wide range of products and print services. In 2020, TBC revised its 500ml can, 250ml slim, and 330ml sleek cans design to reduce their weight, and in turn, their environmental impact, while also expanding its portfolio to include a 510ml and 190ml.
Known for its innovative wellness and energy beverages, Carabao Group, Bangpakong, Chachoengsao Province, Thailand, currently manufactures 1.6 billion cans and 1.8 billion bottles per year. In December 2018, Asia Can Manufacturing opened an aluminium factory close to the plant to support Carabao Group’s growing need for aluminium cans reducing its reliance on imported products. The cans are made using the drawing and ironing process and include a reusable lid.
Siam Can’s, Chonburi, Thailand, has been manufacturing cans and providing lithographic services for over 40 years. The company prides itself in being a leading manufacturer of powder and speciality cans, including a range of metal containers for food products. The company’s newest production facility is 110,000 square feet and employs 350 people.
Sustainability initiatives continue to shift and shape the operations of several of Thailand’s can manufacturers. Established in 1988, Bangkok Can Manufacturing is committed to producing sustainable quality packaging, including participating in the World Environment Day, held in Rangsit municipality this past June. Some of the conservation activities that the company is involved in include collecting aluminium for royal prosthetics, waste separation, energy conversation, and vegetable gardening. It also signed the Memorandum of Understanding, where the company made a commitment to increase the amount of green space, promote health and environmental sanitation, and reduce community waste management.
Image: boyphare / Shutterstock.com
TCP Group, Bangkok, Thailand, held its first forum for sustainability development this year, providing the opportunity to discuss several sustainability approaches, including developing a circular economy and achieving carbon neutrality. The intent of the forum was to create strategic collaboration between partners to help overcome challenges and drive sustainability, shared Saravoot Yoovidhya, chief executive officer, during his speech.
TCP Group has developed a three-year plan to help drive the company’s sustainable business growth and make a positive impact on both society and the environment, which includes developing packaging that would be 100 per cent recyclable by 2024, replenishing more water than the company uses by 2030, and achieving carbon neutrality.
“Five years ago, we announced the synergy of our various businesses into TCP Group, and we have been working toward sustainable development goals ever since. Up to now, events such as Covid-19 and digital transformation have tremendously affected business, society, and the environment. We, therefore, are revisiting our purpose and strategies in every aspect to prepare for the volatile future and to create growth for the organisation while energising the sustainability of the world with a new purpose: ‘Energizing A Better World For All,’” said Yoovidhya.TCP Group continues to focus on both the Thai and global markets, including establishing the goal of increasing overseas production capacity and doubling the annual target revenue within three years.
The last few years have dramatically impacted Thailand’s economy as the country responds to several global challenges. Despite the unpredictability of the global markets, the can manufacturing sector has adapted by implementing innovative and sustainable solutions for beverage and food processors. S&P Global reported on 1 August 2022, that manufacturing in Thailand increased to a record high, from 50.7 in June to 52.4 in July. This is the seventh month that the country has reported growth, with this upward trend expected to continue.
“Thailand’s manufacturing sector recorded a strong performance during July,” said Lewis Cooper, economist, S&P Global Market Intelligence. “Business conditions improved to a near-record degree amid one of the quickest expansions in output in the history of the survey and a renewed uplift in order book volumes.”
This feature article is restricted to logged-in paid subscribers.
Login or subscribe now to view this exclusive content.
