Riding Thailand’s Green Surge

From miracle textiles to $400 doll homes and the planet’s largest PET resin recycler, traders embrace a BCG economic system

When the European textile large Lenzing was looking for one of the best place to construct the world’s largest manufacturing plant for lyocell, an eco-friendly fibre typically described in trend circles as a “miracle cloth”, it zoomed in on Thailand.

Like quite a few different overseas traders, Lenzing partly selected the Kingdom for its very good location and connectivity on the coronary heart of Asia. However the Austrian multinational with operations on 4 continents had one other key cause for its choice – Thailand’s dedication to sustainable development by way of a mannequin generally known as the Bio-Round-Inexperienced Financial system, or BCG.

The garment trade globally has an enormous picture drawback as an environmental polluter due to its “quick trend” enterprise mannequin and widespread use of oil-based fibres. Lenzing, in contrast, is recognised because the main producer of lyocell, a wood-based fibre that’s 100% biodegradable and compostable, requires no dangerous chemical substances and recycles 99.5 % of solvent utilized in its manufacturing by way of an revolutionary round closed-loop course of.

By 2024, Lenzing has a worldwide aim to generate 75 % of its fibre revenues from lyocell and different environmentally pleasant materials. By 2030, it goals to have decreased its greenhouse gasoline emissions by 50 %.  On the 304 Industrial Park in Prachinburi, 140 kilometres east of Bangkok, Lenzing discovered a location that provided inexperienced biogenic power and a sustainable water provide adequate to function a manufacturing facility producing 100 million tonnes of lyocell yearly. 

It additionally discovered a authorities ready to supply, by way of the Thailand Board of Funding (BOI), beneficiant tax breaks and different incentives to corporations aligned with its BCG targets. 

Building started in 2019 and, regardless of the Covid disaster, the €400 million plant opened on time and inside finances in March 2022. “Thailand with its dedication to sustainability fitted with our clear long-term imaginative and prescient,” Lenzing Vice President and Senior Undertaking Director Ismail Abdullah stated in an interview. “Right here we will remodel our manufacturing and help our bold local weather targets. For Lenzing, this venture represents a vital step in direction of a carbon-free future.”

Austrian textile large Lenzing’s new €400 million manufacturing facility in Prachinburi, Thailand, is the world’s largest manufacturing plant for the eco-friendly so-called “miracle cloth” lyocell.

Lengthy identified to vacationers because the Land of Smiles, Thailand has additionally turn into a land of sustainability for environment-conscious companies. In 2021, overseas and native traders dedicated to 149.5 billion baht ($4.2 billion) price of BCG-related investments in Thailand – greater than double the determine for the earlier yr, in response to official figures. Within the first half of 2022, the development continued, with traders pledging an extra 80 billion baht.

Whereas completely different nations use completely different terminologies for his or her sustainability efforts, Thailand’s use of the time period Bio-Round-Inexperienced economic system particularly highlights the bio-economy, based mostly on the manufacturing of renewable organic assets, and the round mannequin that reuses and recycles present merchandise and supplies for so long as attainable. The inexperienced mannequin describes the massive image, retaining the economic system, society and setting in steadiness by way of sustainable growth.

For traders, which means alternatives in Thailand’s most vital industrial and repair sectors. The fertile, biodiverse Kingdom of 70 million is without doubt one of the world’s most vital agricultural nations and meals exporters, has a serious petrochemical trade and is a global medical hub. The Thailand Board of Funding’s BCG incentives embody meals processing, biofuel and bioplastics, biotechnology, renewable power and recycling. 

Such is the momentum that the federal government expects the BCG sector to account for nearly one-quarter of the nation’s GDP by 2027 in contrast with 21 % as we speak. 

By 2030, it expects to scale back greenhouse gasoline emissions by 20-25 %. “BCG is a journey Thailand is taking to turn into a high-income nation,” Dr Janekrishna Kanatharana, Govt Vice President of the nation’s Nationwide Science and Expertise Growth Company (NSTDA), stated in an interview.

World chemical firm Indorama Ventures Public Firm Restricted (IVL) has for years been a touring companion on that journey. IVL is the world’s largest producer and recycler of polyethylene terephthalate, or PET, a 100% recyclable plastic mostly used for meals packaging and beverage bottles. 

Based in Thailand in 1994 and nonetheless headquartered there, IVL grew its Thai enterprise with the assistance of BOI incentives in any respect levels of its home growth. Right this moment, IVL’s operations span 35 nations, make use of greater than 26,000 individuals and in 2021 the corporate reported revenues of $14.6 billion.

Maybe IVL’s most eye-catching numbers, nevertheless, present the dimensions of its recycling operations. IVL is the world’s largest producer of recycled PET resins for beverage packaging. The IVL website contains a always ticking meter that provides real-time updates on the billions of plastic bottles the corporate has recycled since 2011 (80 billion as of August 2022). In 2019, IVL dedicated to the Ellen MacArthur Basis to take a position US $1.5 billion to extend that recycling capability to 750,000 tons of post-consumer bottles by 2025. That is equal to 50 billion bottles per yr by 2025.  

“IVL is constructing the infrastructure the world wants to shut the loop and ship a round economic system for PET packaging,” IVL’s Chief Govt Officer, DK Agarwal, says. “The benefit of enterprise in Thailand has been instrumental in our development and has allowed us to take a number one revolutionary stance concerning sustainability and recycling globally.”

Giant corporates are removed from the one beneficiaries of the BCG. Amongst small and medium sized enterprises, Bangkok-based PlanToys has actually carved out a $15 million export market to the U.S., Europe and Japan by making revolutionary high-end wood toys from undesirable rubber timber.

Thailand is the world’s largest rubber producer, however the timber that swathe the nation’s southern provinces can solely produce latex for 25 years. After that, they turn into ineffective to plantation homeowners, who historically burn them after which have to wash up the land for replanting. “We by no means lower down timber,” PlanToys Managing Director Kosin Virapornsawan stated in an interview. “We upcycle them.”

PlanToys, which has 650 workers, was based 41 years in the past by Vitool Viraponsavan and a bunch of idealistic younger architects who had arrange a kindergarten. “We needed to create higher youngsters for a greater world by way of sustainable play.” Kosin stated.

With 98 % of its product exported, PlanToys has discovered an appreciative world buyer base amongst generations of more and more sustainability-conscious dad and mom. And in an trade through which greater than 90 % of all toys are manufactured from plastic, PlanToys’ creatively designed wood merchandise command premium costs.

Among the many greatest sellers, the Victorian Dollhouse retails for $400 within the U.S. and U.Okay.  and the Dancing Alligator fetches $30. “We’re a distinct segment participant – we promote to individuals who perceive and share the identical mindset,” Kosin explains.

In a round world, that additionally means retaining environmentally aware prospects completely satisfied by not simply promoting toys, but in addition establishing toy libraries so the identical toys can be utilized over and over.

All of which has made PlanToys a BCG success story. “Thailand is main the world within the design of wood toys,” says the NSTDA’s Dr Janekrishna.

In addition to being primary in rubber, Thailand additionally ranks among the many world’s main sugar producers – a bioresource that’s taking part in a serious function within the BCG economic system. A lot of that funding is going down in Thailand’s excessive tech Japanese Financial Hall, the place the federal government is opening a pilot biorefinery and different initiatives to encourage BCG innovation.

In a single instance, the main French power firm Complete and Dutch biochemical producer Corbion in 2017 fashioned a three way partnership, Complete Corbion PLA, to open a $250 million plant that converts native cane sugar into polylactic acid, or PLA, a renewable and biodegradable different to polystyrene and different oil-based polymers. In 2021, the companions introduced the enterprise has upped annual manufacturing from 75 to 100 million tonnes to fulfill demand.

Again at Lenzing’s new Lyocell plant in Prachinburi, Ismail Abdullah is already making ready for future growth to fulfill what he describes as “great demand” for sustainable fibres from prospects who provide trend shops similar to IKEA, Uniqlo, Levi’s, H&M and Zara.

Lyocell fibres, which Lenzing markets below the model title TENCEL™, are usually not solely prized for his or her environmental credentials, but in addition their wearability. Breathable, moisture-absorbing and soft-to-the-touch, lyocell is usually in contrast favourably with cotton and is broadly utilized in lively and informal put on. Therefore the “miracle cloth” label utilized, amongst others, by UK retail retailer Selfridges.

Ismail Abdullah says Lenzing might have met the rising demand by increasing manufacturing at its different websites in Europe or the US.  “However when you’ve gotten a profitable venture right here in Thailand and when you’ve gotten such good help from the federal government and BOI in addition to good availability of infrastructure and expert labour, it’s a no brainer that we keep and additional make investments right here.”