A new shade of green is gradually sweeping across China's export manufacturing industry, one that took a while to take root.
Companies are riding the environment-friendly wave.
Pressure from the national government and tightening regulations in overseas markets are compelling a growing number of suppliers to modify their business strategies and incorporate ecologically safe processes. The transition is neither extreme nor desperate, but the impact could be widespread as many midsize and small companies are also taking "green" initiatives. Due to the sheer number of these suppliers, they account for a large portion of the pollution and wasteful practices in the country.
Irrespective of size, companies are introducing long-term strategies anchored on recycling, waste reduction and sustainable energy adoption.
Recycling is the most common practice among factories, one that is carried out internally or through third parties. This, however, goes beyond reusing offcuts and scrap materials. Highly polluting industries such as leather tanning have always been required to invest in wastewater cleaning systems, but very few actually do. Now, many are investing large sums in such facilities not only to comply with local ordinances but also as a marketing tool. This comes as an increasing number of buyers are including social responsibility as a criterion in supplier selection.
Fujian Guanxing Leather Co. Ltd in Shishi, a city under the municipality of Quanzhou in Fujian province, has invested $3 million in a 6,000-ton capacity wastewater processing station. Once operational, the facility is expected to save the company $1.4 million annually.
In fact, waste recycling is becoming the norm in the city, one of the major garment and textile hubs in the province. More than 20 manufacturers have now installed treatment systems such as those from Carrousel. The majority of Fujian factories that dye fabrics in-house have similar facilities for their sewerage as well. Moreover, several local governments have set up complementary wastewater recycling services to help ensure a continuous supply of fresh water.
When it comes to material refuse, many large enterprises contract professional disposal services. Small and midsize businesses often transact with recyclers and junkyard operators.
Guangdong Weiermei Underwear Co. Ltd, for instance, sells fabric cutoffs to waste collectors. Watch exporter Shenzhen Full Success Gift Mfg Ltd and lock specialist Make Locks Manufacturer Ltd vend metal scraps to recyclers.
Some companies involve customers in their green efforts. On request, Shenzhen FJY Electronic Co. Ltd uses recycled materials during production. Doing so has the additional benefit of lowering unit costs.
Adopting degradable materials, however, does not always bring a similar effect. In the beauty and cosmetics industry, bottles made from such substances are about 20 percent more expensive than conventional plastic.
While recycling and reusing are gaining more adherents, only a handful of operations are tapping sustainable energy sources such as wind or solar power. Cynthia Garments Making (Dalian) Co. Ltd has taken steps to do so by using solar water heating at its workers' dormitories.
Management disciplines strengthen sustainable practices
In an effort to cement their commitment to environment-friendly manufacturing, many suppliers are acquiring ISO 14001:2004 certification and implementing ERP, 5S, 8S and 3R systems. Doing so lessens raw material wastage, management costs and delivery time. It smoothens production processes as well. "We calculate the exact unit consumption of fabrics and accessories," Cynthia business manager Tony Tong said. "We purchase strictly in proportion with the orders to reduce wastage."
Other production and purchasing decisions are also influenced by green principles.
Fujian Golden Vision LCD Science & Technology Co. Ltd has designated one of its engineers to be responsible specifically for developing ways to reduce power, water and raw material consumption during production.
Some factories outsource processes that are potentially hazardous to the environment. Lock companies in Zhejiang and Shandong provinces subcontract electroplating and paint coating to local specialists who are not only more capable but also use professional equipment that produces less pollution.
In some industries, higher productivity is correlated directly to waste reduction. Makers are emphasizing worker training to upgrade efficiency, trim down defects and reduce wastage.
But green manufacturing still has its obstacles.
Often suppliers are not motivated enough to adopt sustainable practices in production. Unless required by buyers, any effort to introduce ecologically safe processes is only deemed as an unwarranted cost. For such businesses, compliance with RoHS, WEEE and other regulations is sufficient in showing their environmental commitment.
Greenpeace keeping a scorecard
In October 2009, a report by Greenpeace highlighted the elevated pollution levels in the Pearl River in southern China. As the main source of drinking water for about 4.7 million residents, the estuary is where thousands of factories dump their waste as well. A high-level cocktail of beryllium, copper, manganese, BPA, alkylphenols and other hazardous chemicals were discovered in analyzed samples from eight cities around the river.
The report also enumerated the noncompliance of at least 18 major private locally owned and multinational companies in the Fortune Global 500 or the China 100 list with pollution disclosure rules implemented by the Ministry of Environmental Protection in May 2008. Samsung, Nestle, LG, Motorola and Sinopec were among the companies cited for exceeding emissions standards and failing to publish their pollution data within 30 days after being blacklisted as the rule required.
Greenpeace has been active in helping monitor and expose environmentally destructive practices in China. Its media reports have helped pressure manufacturers to adopt more eco-friendly systems and for local governments and enforcement agencies to implement laws and tighten standards.
The group, however, admitted its own limitations as it failed to include hundreds of thousands of small operations that are also heavy polluters.