Asian Trends Inspire Manufacturers To Go Green

Manufacturers of steel and industrial equipment in Asia are among those surveyed who feel that (1) reducing their carbon footprint, (2) a recovery in U.S./European markets, and (3) a growing interest in safety and standards are the top three areas of growth over the next two years.

Air, land and water pollution, as well as the depletion of non-renewable resources, have been moving up the agenda for governments, businesses and the public. Manufacturers in Asia are aligned with this trend, making resource conservation one of their top priorities.

While financial costs and lack of education have played a part, the main dilemma the largest manufacturers face in taking on more sustainable production practices has been whether to wait for better environmental data before acting, or to act now using less trusted data, with the risk that their efforts will ultimately be found to be inappropriate or unnecessary.

It would seem that emerging market manufacturers in Asia are less inhibited. More are adopting renewable energy sources or using gas-capture and starch extraction procedures for instance. In an industry poll among 95 manufacturing companies by Global Intelligence Alliance (GIA; Helsinki, Finland) late last year, North American and European respondents said they see reducing carbon footprint, recovery in U.S./European markets and growing interest in safety and standards as the top three areas of growth over the these two years. (Respondents included manufacturers of steel, testing and measurement equipment, and agriculture and construction products).

On the other hand, emerging market manufacturers from Asia and Latin America say that conservation of resources is their top priority. Meanwhile, emerging and developing economies are projected to continue on a strong recovery path, with China and India leading the way at 9.6 percent and 8.4 percent GDP growth so far for 2011. As a result, businesses in Asia Pacific and Latin America are less concerned with growth in the developed world and believe that conserving existing resources is the biggest opportunity area for them this year, in line with the overall global trend towards higher resource efficiency.

This is also in line with a shift in consumer trends over in Asia Pacific. According to another survey by GIA among 67 Asian consumer and retail industry professionals last November, these industry players say that over 50 percent of Chinese consumers are willing to “pay a little more” for organic/green food, beverages and personal care products, and approximately 10 percent are willing to “pay much more”.

The same survey in India and South East Asia found that industry players say a higher percentage of the people willing to “pay much more” for fast moving consumer goods (25 perecnt in India and 18 percent in South East Asia). On the other hand, the survey also revealed that consumers are less willing to pay more for organic/green consumer durables such as household products or furniture and fittings.

Such trends and the drive by major brands to embrace corporate social responsibility mean that Asian manufacturers will need to adhere to higher environmental standards. Carbon credit trading will also hopefully help to encourage the building of more renewable energy facilities in developing countries.

All in all, demand for technologies aimed at bringing about resource efficiency is expected to be on the rise in the Asia Pacific region in 2011-12. Key strategies involve using new materials, conserving existing resources and reducing the generation of waste and pollution in order to reduce overall input costs and increase competitiveness.

Pete Read is a senior vice president based in Singapore for Global Intelligence Alliance, Itämerenkatu 5 A, 00180 Helsinki, Finland, +358 (0)10 613 2000, www.globalintelligence.com.