Plastic plans fail as pandemic deliveries prevail
Packaging products see demand surge
published : 21 Apr 2020 at 07:00
newspaper section: Business
Single-use plastic is making a comeback, as Thais order takeout and delivery in soaring volumes because of the pandemic.
This was supposed to be the year Thailand started to phase out single-use plastic bags, in line with the government's plastic waste reduction roadmap. At the start of 2020, major retailers agreed to stop offering plastic bags, a policy that was supposed to be extended to small and medium-sized enterprises (SMEs).
Despite this, the rise of delivery and e-commerce has inspired a surge demand, not just for plastic bags, but other forms of plastic packaging as well.
Surasak Luangaramsri, vice-chairman and the spokesperson of the plastic industry club under the Federation of Thai Industries (FTI), said demand for food packaging products and the flexible packaging has grown rapidly in the past few months.
"The plastic industry in Thailand, especially for food and beverage, has benefited from the outbreak," he says.
There are many types of flexible packaging such as film extrusion that are used mostly for food and beverages such as bags, bottles and film.
The club said before the virus break out plastic makers have converted factory plants to produce packaging, hand sanitiser gel bottle and face shield products instead of single-use plastics to serve domestic demand growth.
"As the plastic makers converted their plants to new products after major retailers banned plastic bags, they could not respond to the growing demand fast enough and supply was delayed," says Mr Surasak.
The club's 160 members are plastic converters, raw material producers, and tooling and machinery manufacturers.
"Everyday Say No To Plastic Bags" that kicked off at the start of the year banned plastic bags for major retailers. Somchai Poomlard
Somsak Borristtanakul, chief executive of SET-listed TPBI, Thailand's top plastic maker, says the company has seen growing revenue from plastic bags and e-commerce packaging since March.
Sales volume has increased 40-50% with gains in domestic sales and exports.
In the food packaging category, TPBI saw a 10% increase in sales when shutdowns began, pushing many into panic-buying groceries.
He says TPBI expects this year's financial performance could be in the black, up from losses of 34 million baht in 2019.
Weerachat Kittirattanapaiboon, chief executive of Biodegradable Packaging for Environment, says the company's sales of biodegradable food packaging have risen 30%.
The company's Gracz packaging is made from sugar cane fibres that cost 30% more than the non-recyclable foam packaging, but promises environmental sustainability.
Mr Weerachat says the crisis has resulted in the company raising its revenue target by 30% for this year to 1 billion baht, up from 800 million baht last year.
Production output this year may rise 50% to 600 million units from 400 million units in 2019 due to rising levels of environmental consciousness among Thais.
Eka Global, a Thai plastic packaging company, says doubled production of its longevity plastic packaging has doubles to 20 million pieces per month from 8 million pieces per month.
Chaiwat Nantiruj, chairman and group chief executive, says the ready-to-eat, pet food and e-commerce markets boosted demand growth for plastic packaging products.
The production facility in China with a capacity of 20 million pieces per month has resumed operations after being shut down for the outbreak.
The company is optimistic revenue could rise 30% from 900 million baht last year thanks to growing demand for long shelf life food packaging.
A shopper carries plastic bags at a mall in Bangkok. Sales volume for plastic bags has increased 40-50% in March. PAPIPAT JANTHONG
Dulyawit Khuiaphai, chief operating officer of Ongtong Food Industry, the operator of Ongtong Khaosoi, says the company's packaging was in short supply two weeks ago after fully shifting to takeout and delivery after shopping malls were closed in late March.
"Before the coronavirus outbreak, only 20% of our sales came from takeaway and delivery," Mr Dulyawit says. "We never imagined running a business 100% via delivery and take away would result in a temporary shortage of packaging. Demand for packaging has risen to 600 pieces per day from 400 pieces before the pandemic."
The packaging shortage has eased after the company stocked about 20,000 pieces in inventory.
Boonyong Tansakul, chief executive of Zen Corporation Group, the operator of Zen, AKA and Tummour restaurants, said demand for packaging for delivery increased 2-3 times during the pandemic but the company did not experience any packaging shortages because it has individually designed packaging ordered a year in advance.
He said that the packaging shortage problem affects small street food vendors rather than large chains because the former have never planned for a flood of demand from deliveries.
According to Wongnai Media, since malls were closed, the number of food providers that provide delivery on Lineman via the Wongnai Merchant App reached 15,000 stores during March 22-31, about 3-5 times higher than the previous week.