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Investors see untapped potential in Asia’s plastics problem

Updated: Mar 7, 2019

PBS News Hour

Growing awareness of the environmental damage plastics can cause, combined with China’s ban on the import of most global recyclable plastics, has spurred investors to seek profits in a sector they believe has immense potential: waste management in Southeast Asia.

The problem

About 60 percent of plastics that end up in the ocean come from five countries — China, Indonesia, the Philippines, Thailand, and Vietnam — according to a 2015 article published in the journal Science.

The nations have seen rapid economic growth in recent years but have not developed waste management systems to keep up with the increased consumption of plastics. As a result, a large number of disposable products end up in rivers or other waterways that then flow into the ocean.

The plastics hurt the environment, but also certain sectors of the economy. Pollution can be detrimental to local fisherman, and plastic-filled beaches can be a major hit on the tourism industry.

How did this happen?

Southeast Asia has quickly become a destination for waste from other nations since China stopped accepting all but the purest recycling from overseas at the beginning of this year.

The environmental group Greenpeace estimates nearly half of U.S. exports of plastic waste this year are going to Malaysia, Thailand and Vietnam.

The influx has come so rapidly that those three countries are also planning to ban imported plastic waste in the coming years. They say too much illegally imported waste is piling up. If that waste is not processed properly, it is at risk of leaking into the ocean.

Where investors see opportunity

New government funding and international investment are aiming to help address those problems and to stem the tide of ocean plastics.

Last year, Indonesia pledged $1 billion, including a $100 million loan from the World Bank, to reduce the amount of plastic it leaks into the ocean 70 percent by 2025. The country has launched awareness campaigns to cut down on the use of plastic bags and introduced new regulations requiring manufacturers to make products more recyclable.

Thailand has also established a 20-year strategy to keep plastic out of the ocean and encourage eco-friendly alternatives to plastics.

In the private sector, Circulate Capital, an investment management firm that has partnered with several large corporations, including PespiCo and Proctor & Gamble, plans to finance waste management companies and build infrastructure to reduce plastics waste.

Even if the companies initially investing do not turn a large profit, they still hope putting money into Southeast Asia will help their bottom line....

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