East African Packaging Industry: Akshay Shah Explains How Silafrica Is Championing Circularity
Interview with Akshay Shah, Group Executive Director at Silafrica
What is your view on circular economy?
Circular economy is a different way in which resources of the planet are used to produce various types of products. It can apply in packaging, electronics, construction, or in any kind of built environment. For example, I have a mobile phone in my hand. This mobile phone was made by mining various types of resources from the planet to produce the glass, metal, electronics, and components inside it. Then, at some point, when this phone is at the end of its life, we basically throw it away. Maybe it goes into the garbage, or maybe it goes back for recycling, and when it is recycled it does not necessary mean that this phone will become a new phone. That approach of taking, make use and throw, is called a linear economy. We can then transition from a linear economy to a recycling economy where we throw, and then we recycle. We recycle the individual components such as the glass, the metal, the plastic and whatever is inside, and that is now used for other things. But a circular economy is where this phone becomes another phone. And if you can think about it in the context of packaging, what if every plastic bottle or yogurt cup or margarine tub, or any kind of plastic packaging were to become another plastic packaging? What if every bottle became another bottle after it had been used? After someone has finished eating the yogurt, they can throw it in a proper responsible way, and then that yogurt cup can become another yogurt cup. If we can move to a circular economy, then we are essentially creating the initial raw material, which is the post-consumer waste of plastic packaging. That waste is now brought back into a recovered raw material and then we are making that into a new thing. In the context of plastic packaging, we can completely de-link from fossil fuel and essentially create a return economy and a recycling economy, which then becomes a circular economy.
How does the circular economy apply to Silafrica?
Silafrica has been in the business of manufacturing plastic packaging for almost 60 years now and I have been involved in the running of Silafrica for almost 30 years in various countries in Africa. And because we have been in this business for so long, we know the consequences of plastic waste in the environment. We have always been very cognizant of that and made sure that we are making recyclable packaging. Where possible, we try to recover this material and make something else out of it. We have always been operating in a sustainable way, but I think what has happened over the last few years is that the world has essentially caught up with this idea that we must move from this old industrial notion of a linear economy to a future looking and more environmentally sustainable option of a circular economy. Silafrica’s action towards that is to, first of all, align with the global movement, because this circular economy is not just happening in Kenya, Tanzania or Ethiopia, where we operate, it is happening across the world, and the whole world needs to move to a circular economy model. Part of it was to really find the right global organization to become a part of so that we can learn from the best practices. We can make some commitments that can then catalyze the actions and the innovation that we take, not only within our business but also within the plastic packaging sector in East Africa where we operate. It was really about becoming part of both, a global movement as well as championing a more local and regional movement towards a circular economy.
How did you implement it and how far have you gotten to?
We reached out to the Ellen MacArthur Foundation because they are one of two major global forces, together with Alliance to End Plastic Waste, that are actively working on helping the plastic sector move to a circular economy model. Both of them are amazing organizations and we have the bandwidth to become part of one, which is why we applied to the Ellen MacArthur Foundation. We were accepted as one of the global signatories. And the reason for going through that process was that we can learn a lot from what other organizations that are part of this global force are doing to make the right changes, the right innovation in moving towards becoming 100% recyclable in the plastic packaging that they manufacture. We can learn from other companies about how they are doing it. We do not have to reinvent the wheel. Besides, what we are doing can be shared with other companies around the world who are part of the Ellen MacArthur Foundation. There is a lot of synergy, best practices, innovation, sharing, etc. The second thing is that we are making a commitment publicly that by the end of 2025, we are not going to make any kind of packaging that is not 100% recyclable. This is very important, not only for us internally, but even for our customers, as we are committed to helping them make sure that the packaging that we produce for them will be 100% recyclable. And that applies to everything that we make in terms of packaging. It was very important to take a stand on this and make it public. Another interesting point is that any industry operates as part of a supply chain, all the way from the raw material and now all the way back to the recycling and circular movement of this material. For us to be successful, we need to be part of a circular value chain, as opposed to a linear value chain. This also means that we have to attract the right type of partners, be it material suppliers, equipment suppliers, types of banks and insurance companies we partner with, etc. We want our entire value chain, not just our customers, to be committed to this idea of circular economy. That whole vision and commitment is one of the reasons why we went ahead and became a part of the Ellen MacArthur Foundation community.
What is the reporting process like?
The Ellen MacArthur Foundation provides a template for reporting and that template is the same across all the various global signatories. We commit to reporting our progress against our targets every year. And we are now in the second year of this reporting cycle. That report essentially breaks down a lot of details around how much we are producing, how much of that is 100% recyclable, what are the specific actions that we are doing around eliminating the non-recyclable components or innovating to replace it with 100% recyclable components, what we are doing in terms of increasing the use of recycled material back into the packaging, etc. Those are very specific reporting requirements. We submit this information to the Ellen MacArthur Foundation, they consolidate this data across all of their signatories, and then use that to give the world a picture of how the plastic packaging industry is moving towards a circular economy globally, as well as regionally.
What is the relationship with the client and how does these collaborations work?
First of all, the collaboration is really between Silafrica, our customers, technology companies, and our suppliers, because these are the elements that really need to work together to be able to make some of these innovation changes. Of course, our customers, who are the packaging user, are a very important part of this transition. They need to agree with the initiative. It is a two-way collaboration. Customers who are much more progressive in thinking about the environment and circular economy are the ones who will reach out to us. But we are not waiting for that to happen. We are also going out to our customers and saying, if you are not already thinking about circularity, let us start that conversation. Today, every company in the world needs to have a circular economy strategy, whether you are manufacturing mobile phones, retailing or whether you are in plastic packaging, construction, etc., every company who is making anything and selling anything has to have a circular economy strategy. It is part of our role.
Obviously, a global organization that is trying to set global targets has to then be localized. Because at the local level, the realities might be different. For example, the collection, sorting and recycling of waste in Kenya, Ethiopia or Tanzania is completely different than the way it happens in Germany or the UK. We have to be cognizant of the local reality. That is where these two organizations have a role to play. The Kenya Plastics Pact is an outcome of the Ellen MacArthur Foundation. What they realized is that every country has their own local adaptations. And having a plastics pact in each country can help to bring some of these global best practices and localize them. The Kenya Plastic Pact’s purpose is to bring some of these global innovation practices, idea sharing and some of the standards and definitions to the local Kenyan context, and then help bring awareness of not just circular economy, but how that works in the plastics packaging space, and then try to get companies to work together across the value chain to become more circular. A lot of it is really around creating this community and shaping some of the strategic changes that this value chain in plastics packaging needs to move towards. It is a very influential approach through awareness creation and collaboration.
On the other hand, there is the Kenya Extended Producer Responsibility Organization, which is much more about legislative compliance. KEPRO helps companies to become legally compliant with circular economy legislation. And it is important to be part of both organizations.
Can you give us an example of a success story?
Silafrica is a significant producer of packaging for the beverage sector in East Africa. We supply to pretty much all the beverage companies in the multinational category and to quite a few in terms of the local brands as well. And these are the companies that are very cognizant to the need to become 100% recyclable in their packaging. Examples of success are where we have been able to increase the use of recycled content in their tertiary packaging, such as the returnable packaging they are using. We have also made the packaging more recyclable by removing the printing and replacing it with embosing. The brand is still there, but it is basically a 3D shape within the packaging. By removing the ink or the label, the material is a lot easier to recycle. We are also looking at how we can help some of our companies transition from using wooden pallets – which are again bad for the environment because you are cutting down trees – to using plastic pallets, ideally made out of plastic packaging waste. So, that we are giving this plastic material a new life that will continue to be used for years and years.
What are some of your challenges? Is that something that is well developed in Africa?
The biggest challenge is that while everyone knows that it is a good idea to move to circular economy, there has to be an economic incentive to do so or an economic penalty if you do not do so. Because at the end of the day, the FMCG industry uses packaging to get their beverage, food, paint, oil or whatever, to the end consumer. And if the end consumer is not going to pay more or not choose the brands that are more circular in their choice of packaging, then the entire value chain will continue to operate the same way. It is really a responsibility that starts with the brand or the packaging user to educate their end consumers about their packaging being more circular. Then the consumer has to vote with their wallet. They need to purchase the products from the brands that are more circular. Thirdly, the legislator or regulator need to make it mandatory for companies in the packaging value chain to participate in a collective way to contribute towards improving the country’s capacity to collect, sort and recycle the plastic waste, so that it can come back into the packaging value chain. Once those three things are happening, and the packaging user, the end consumer and the regulator come together, we are going to make an enabling environment that will catalyze the shift to a circular economy. Silafrica, as a packaging manufacturer and innovator, is ready to get into action. We have already been doing it for certain sectors such as beverages for the likes of Coca-Cola and Pepsi. We have done this in the agricultural sector with a company called Twiga Foods. And we are now doing that in avocado exports where we have made 100% recyclable plastic crates that completely fold flat, and are being used to replace corrugated cardboard cartons that cannot be reused, whereas our crate can be reused and go for export at a very competitive cost. Our aim is to keep championing this transition. But we do need the other side to play ball with us, because changing the world to a circular economy is all about teamwork. There is no one company that can do it on its own.
What are the next projects coming up?
One of the products that we have been manufacturing is a form of secondary packaging called stretch wrap. Stretch wrap helps to secure pallet loads. If you are moving boxes on a pallet which is moving across your supply chain, it is important to secure that pallet load so the boxes do not fall off or get dirty. And that is done through stretch wrap. It is a very thin material and yet it is very strong. So you are using very little material to keep this secondary packaging secure. But once that trip has been made, from our customer to their retail, then their stretch wrap is removed. The good part is that it does not end up in the environment because this is not a consumer packaging. It is a B2B journey. From the retail that stretch wrap can come back to the packaging user, and from the packaging user that can come back to Silafrica. And we would like to have more of that happening. Our challenge was to be able to recycle it and make a new stretch wrap out of it. Over the last one and a half years, we have been working on that and I am happy to say that we have managed to crack that. We can now make new stretch wrap from old stretch wrap. And that is something we are really proud of.
Silafrica will be exhibiting at Propak East Africa 2023. To find out more concerning the event, please contact the below:
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