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• Coca-Cola invests in PET recycling in Kenya
• Kenya: Soaring Cost of Plastic Squeezing Bottlers' Profits
• Kenya: Plastic Bags: Convenience Costing the Earth
• Riley Packaging may Buy Kenya's Pan African Paper Mills

Coca-Cola invests in PET recycling in Kenya

 

Coca Cola, along with two companies involved in the beverage industry, have formed a new company called PET Recycling of Kenya to manage the PET plastics recycling project.

The venture, PET Recycling Company of Kenya, will work with Greenplast International, a recycler near Nairobi, Kenya, to crush the collected plastics and export the material to China.

The company aims to collect 4,200mt of materials at the Greenplast facility by 2015. The project is expected to recycle nearly 70% of the plastics containers sold by 2015.

 

Kenya: Soaring Cost of Plastic Squeezing Bottlers' Profits

 

As many Kenyan firms race against the escalating commodity prices and currency fluctuations, lack of hedging options for certain raw material commodities in the futures markets has left the profit margins of heavy plastic consumers exposed....

Locally, beverage and water bottling companies are battling rising packaging costs as they continue to push sales in a market that is faced with rising inflation.

Soft drinks manufacturer Coca-Cola says packaging costs have risen 25 per cent in the last one year.

 

The biggest soft drinks manufacturer in the region by market share said passing on prices is not easy given the rising number of new entrants in the market.

"We have had to actually absorb the rising plastic bottles cost, which is now 25 per cent higher that in the last year" said Mr Jorsen Patten - Kenya country manager, Coca-Cola.

 

Local manufacturers of plastic bottles have said the prices of Polyethylene terephthalate (PET) a raw material for plastic bottles has increased 74 per cent from $1150 per tonne to $2000 per tonne in the last 12 months.

PET is preferred for packaging food and drinks because it is relatively safe.

 

Safepak Ltd, a major player in the plastic manufacturing sector says its costs have increased 75 per cent in the last one year, "this has raised the cost of plastic component in our raw materials from 60 per cent to 75 per cent in a year," said Catherine Wangari, sales and administration manager Safepak Ltd.

 

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Kenya: Plastic Bags: Convenience Costing the Earth

by Susan Anyangu-Amu (nairobi)Thursday, January 21, 2010 Inter Press Service

 

When Nairobi was founded in 1899, it took its name from what the Maasai called the place: Ewassi Nyirobi, 'cool waters.' A century later, the river has something stuck in its throat: millions of plastic bags and other waste, threaten to choke it.

 

According to Robert Orina, chief enforcement officer at Kenya's National Environment Management Authority (NEMA), only about 25 percent of the 1,500 tonnes of solid waste generated in Nairobi each day is collected. In slum areas, where 60 percent of Nairobi residents live, there is no formal garbage collection.

'The result is there is garbage strewn all over the place and most of this is stuffed into plastic bags which remain in the environment for many years,' Orina says. 'The situation in Nairobi is not unique but rather is replicated across the country.'

 

He says residents and manufacturers of plastic bags are both to blame for the environmental challenge the country is facing. According to him, residents take little care in disposing of their rubbish, while manufacturers of plastic bags have resisted a ban imposed by the government on the use of flimsy plastic bags thinner than 30 microns.

 

According to research done by NEMA and the Kenya Institute for Public Policy Research and Analysis (KIPPRA) in 2005, 100 million plastic bags are handed out annually in Kenya by supermarkets alone, the vast majority destined to end up in the environment, clogging sewers and drains, polluting soil, posing a danger to marine life and causing death to livestock when inadvertently consumed.

 

Orina says, 'Millions of plastic bags are dished out annually in supermarkets. Most are so flimsy that they can only be used once and thus they end up being thrown out into the environment where they take hundreds of years to decompose posing a danger.'

Pieces of these plastic bags mix with soil and prevent rainwater from soaking into the ground, contributing to the formation of standing pools of water, the breeding ground for all manner of waterborne diseases.

 

Orina warns that the practice of burning plastic to dispose of it is not not a viable solution. He argues plastics contain substances which when burned release toxic chemicals, including dioxins, which have been linked with cancer.

While there are companies recycling plastic in Kenya, Geoffrey Okora, of Ramji Haribhai Devani Limited says narrow profit margins mean there are only a handful of other enterprises like the one he manages.

 

'We buy plastics for recycling, however, the existing organisations are not able to absorb the huge amount of plastics in the environment. Furthermore the profit margin gained from recycling plastic is minimal compared and most organisations would rather not venture in this area. And when they do, they prefer to limit themselves to hard plastics as opposed to the flimsy plastics,' Okora says.

 

But attempts to rid Kenya's environment of plastic bags have been met with resistance from manufacturers and consumers alike.

Nearly five years ago, NEMA recommended a ban on plastic bags; the government slapped a 120 percent tax on manufacturers producing thin, single-use plastic bags.

 

However, this move met resistance from Kenya Association of Manufacturers who pleaded for a transitional grace period. They warned that imposing such a tax would mean an increase on prices for basic commodities such as milk, bread and sugar, Orina says.

Evans Githenji, the spokesperson for Kenya’s plastics industry, confirms that manufacturers felt the 120 percent tax was too high and appealed to the government to review it downwards to 50 percent.

 

'What we further recommended was that instead of collecting it as a tax levy which ends up at Treasury and is used in other sectors such as health and education, we recommended it be categorized as a specific levy and the proceeds should go towards handling of plastics at the recycling level.'


Orina says he's not sure what happened to the policy, since the flimsy bags are still on the market, and the 50 percent levy does not appear to have ever been collected.

 

One solution gaining ground in Kenya is to make bags out of oxo-biodegradable plastic. This involves producing plastic with an additional chemical that enables it to quickly break down when dumped in a natural environment.

'Oxo-biodegradable plastic decomposes more quickly than straw and twigs and much more quickly than ordinary or recycled plastic. It is intended for plastic which gets out into the open environment and cannot realistically be collected. It will automatically self-destruct, but ordinary or recycled plastic will blow or float around for decades,' says Michael Stephen, director of UK-based Symphony Environmental Technologies.

But Symphony’s claim that its plastic is broken down as naturally as grass clippings or twigs has been challenged in other places where it has been introduced.

 

Orina and Githenji express doubt over the completeness of decomposition, arguing small particles of the degraded matter may find its way into the food chain. The solution for Kenya, they both agree, is to take a diverse approach.

NEMA is promoting replacing plastic with durable, re-usable bags to reduce the sheer volume of plastic in circulation, says Orina.

'What has been lacking is government will to carry out a proper campaign on dealing with the plastics environmental menace. What is needed is for the government to set up clear mechanisms on the collection of the 50 percent levy. This money should then be put in a consolidated fund which should go towards recycling of plastics and the general improvement of the environment,' Githenji says.

 

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Riley Packaging may Buy Kenya's Pan African Paper Mills

 

RILEY Packaging, the region’s largest manufacturer of packaging materials, is bidding to take over the Pan African Paper Mills (Panpaper), East Africa’s largest producer of pulp and paper after the company was put under receivership last week.

Panpaper, a pulp mill established in 1974 in Webuye town, western Kenya, is a joint venture between the Kenya government (34%), the International Finance Corporation, the World Bank’s private investment arm, and Orient Paper Mills, part of the Birhla Group of India.

The firm folded last month, rendering some 1,500 permanent staff and another 30,000 casual workers redundant.

Sources disclosed this week that the Riley management has started the possible buyout discussions. “Yes, we are interested in bailing out Panpaper and we are in the initial stages of negotiations.

“We have the capacity to see Panpaper up and running once again,” said a top source. Reports indicate that Panpaper owed its suppliers about sh175b in debts and was put under receivership by debenture holders last week.

For Panpaper to resume business, sources explained, sh55b would be required in fresh capital injections. Officials at Begbies Traynor, the receiver company handling the process, declined to comment on the matter.

If successful, the interest from Riley Packaging, a partnership between Mukwano Industries and Mara Group sparks off a reversal of business movement that has seen most Kenyan companies move into Uganda and either set up shop here or merge or acquire local firms.

Little has happened in the opposite direction where Ugandan firms have moved into Kenya and attained a major presence there. Mukwano is a leading maker of industrial products including cooking oil, soap and other detergents. Mara Group is behind the Kensington Apartments and Raps Uganda.

Both Mara Group and Mukwano Industries are involved in massive real estates development. It is not clear how many other companies are bidding to take over Panpaper.

 

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