29 Jun 2021
Yash Lohia,the chief sustainability officer of Indorama Ventures, is a poster-boy example of a new generation of socially-conscious entrepreneurs taking a hot seat at a successful family business and driving that legacy forward with a greater focus on sustainability.
How did you come to be involved with the family business?
During my childhood I was always listening to my parents talk about Indorama and what they were setting up in Thailand. So I always knew that I was going to join the family business. It was ingrained in me from the very beginning.After I graduated from college in 2009, I did a few internships to get some external knowledge on how other companies are run. In 2011 I joined an agri-chemical business where I learned basic business knowledge at the factory and shadowed different senior executives within the company to understand different management styles.
At the end of 2012 there was an opportunity for me to join our packaging business because we were building a new plant in the Philippines. I became the first employee of Indorama in the Philippines and that was my first real job at Indorama Ventures (IVL). After that, I moved back to Bangkok and continued being a part of the packaging business until 2018,when the CEO of the fibers business asked me to join him. I did and around a year later I decided to set up a recycling vertical within Indorama.
I created my own team and we established a roadmap on how to grow our recycling business. As IVL is one of the world’s largest PET (polyethylene terephthalate) producers, we have a responsibility to recycle. From that point my passion for sustainability only grew and in the middle of 2020 I was appointed chief sustainability officer of the company. The role encompasses not only our recycling initiatives but also the decarbonizing of our footprint.
Tell us about IVL’s sustainability goals and some of your recent efforts in that regard.
The Paris Accord states that we should limit the global temperature increase to below 1.5 degrees Celsius between the years 1990 and 2100. Achieving that target requires all the industries to get to carbon neutral by 2050. It’s a huge challenge, but a great challenge.
And we have set a few targets already: we want to increase our renewable energy consumption to 25% by 2030. Today we're at about 8-9%. We want to reduce our greenhouse gas emissions by 10% by 2025. We want to reduce our energy intensity by 5% by 2025. And we want to reduce our water intensity by 10% by 2025.
We also have recycling targets. Today we recycle around270,000 tons of PET plastic bottles. Our target is to reach 750,000 tons by 2025. We've also committed 1.5 billion US dollars to achieving those targets.
As for emissions, there are three scopes to know: scope one is the emissions emitted from the factory itself. Scope two is the emissions that are emitted from buying energy from outside the factory. And scope three is supply chain emissions, the emissions of my suppliers. As an example, for scope one we created a task force to identify all of the projects to reduce our CO2 emissions from each of our 125 plants around the world and currently we've been able to identify around 45 such projects.
What challenges face IVL in terms of sustainability and recycling? And what approaches are you taking?
We are a growth company. So we will continue to acquire chemical businesses, which means our greenhouse gas emissions will continue to grow. So finding the right solutions to reduce our greenhouse gas emissions is a challenge. I'm currently working through understanding the different avenues you can take to reduce CO2 emissions.
Renewable energy is one avenue we're working on. Green projects to improve chillers and boilers in order to make our processes more efficient are another avenue. What I'm also looking into now are new technologies. Carbon capture, for example, is a very new technology and there's very new debate around that, but that's something that I believe could really transform the decarbonisation of industrial plants. These three avenues: renewable energy, green projects and new technologies I believe will play a big role in the IVL sustainability roadmap going forward.
What is your biggest challenge as chief sustainability officer?
Sustainability has become a huge part of the chemical industry and probably most industries. And what I mean by that is all eyes are on me. Being sustainability head, in the company, people are expecting me and my team to create that action plan to make us more sustainable. So there's a lot of attention on the sustainability group and we must keep ahead of our competition when it comes to PET and sustainability. What also happens is that a lot of our customers rely on us to give them more sustainable products. It's both a challenge and an opportunity to prove myself. I like the challenge. It's a challenge that's trending across all industries at the moment and I believe sustainability will be talked about for the next few decades to come for sure.
We've already been leading the way in the PET industry when it comes to sustainability. And I want to continue leading and be the first such company to go carbon neutral.
Achievements so far?
During the pandemic, we haven’t stopped with our acquisitions in the recycling space. Between December 2019 and August 2020 we acquired two recycling plants, a recycling company and signed a joint venture agreement to build a recycling plant in the Philippines.
Another achievement would be on the communication side. The industry already knows what PET is and how it's good for the environment. But a lot of consumers think all plastics are the same when in fact, all plastics are different. PET, which is a plastic that IVL produces, only accounts for 8% of the whole plastics industry. We've been able to package our communication strategy in such a way that now consumers are starting to understand what PET is and how it's actually more beneficial to the environment compared to alternative materials.
We've also joined trade associations over the years and we have quite a strong voice in the community when it comes to PET production, PET waste, recycling and sustainability. We're part of the Ellen MacArthur Foundation’sPetcore initiative, which is a trade association in Europe, the Natcore programme run by the Recycling Partnership in the US, and we're also a part of the Global Plastic Action Partnership under the World Economic Forum. I guess in a way we have become a bit of an influencer in the field.
People often see plastic as the enemy of the environment. Can you explain why we should look at plastic from a more positive perspective?
Basically, plastic is an on-the-go material. Cans are mostly used at home and glass bottles mostly used in hotels and restaurants. That’s a good thing because you can travel and hydrate yourself safely and continue to be hygienic in that sense. The difficult part is that the waste management infrastructure for on-the-go materials is not as good as it is in hotels or restaurants or even in our homes. And that is the reason that PET bottles are not collected as much as glass bottles or aluminium cans. That's one part of it. That does not mean to say that aluminium cans and glass bottles don't get littered into areas such as the ocean, they do. But they also sink so you don't see them. PET bottles float, so people see them.
The second part of it is that not all plastics are the same. Different plastics have different applications and the only plastic used for beverage bottles is PET—aside from being more affordable, PET is favoured because it's see-through and consumers like to see the liquid inside the bottle, and because PET is also more recyclable than the other plastics.
PET has a lower carbon footprint compared to glass bottles and aluminium cans, which is why PET continues to take more market share in the non-alcoholic beverage sector. To summarise, 10 years ago PET had a 45% market share in the non-alcoholic beverage sector. Now it has a 55% market share. Aluminium cans have about 35% market share and glass bottles around 10%.
As for carbon footprint: to melt a PET bottle you need a heat of 270 degrees Celsius. For aluminium cans you need 800 degrees Celsius. And to melt a glass bottle you need to reach 1,300 degrees Celsius. That's the easiest way to understand it. Melting down a glass bottle requires so much more energy and emits much more CO2 and greenhouse gases during the process. And glass bottles only get used five or six times before they get melted down. So when you consider the entire life cycle analysis, PET still has that lower carbon footprint, even though it only gets used once before being recycled.
Does Thailand have a sufficient and effective recycling system compared to other countries?
In Thailand, the collection rate for PET bottles is about 87%, which is quite high. And the reason it's very high is because of the abundance of low-cost manual labour in Thailand. The garbage collectors are actually separating the PET plastic bottles away from the other wastes and then they sell the bottles for about 4 baht a kilo. That way, the garbage collector gets a second source of income and the collection rate remains high.
When you talk about other countries, the US for example has a 25% collection rate. And the reason for that is because a lot of the garbage trucks don't have waste collectors, instead they have a robotic arm that comes out, picks up the whole trash can or bin and just dumps it in. Most of the waste goes to landfill over there.
China and India’s collection rates are around 85-90% for the same reasons as Thailand. Japan currently has the highest rate at around 93%. The government there realized back in the 1990s that there was going to be a lot of plastic waste, so for a while they have been incentivising households to recycle their waste at home.
What should we do to improve plastic waste and waste management in general?
Usually, I say that we should be separating our different recyclable waste at home. Separate your papers, metals, plastics and PET bottles in different bins, and then put all the organic waste in separate bins. We have to throw organic waste away because we can't do anything other than maybe burn it for fuel. Most of it goes to landfill.
You don't want to mix your recyclable waste with your organic waste, because organic waste doesn't have much value and has to be disposed of in a different way. But the recyclable waste has a value. A PET bottle can go back into being a new PET bottle in the same way paper and cardboard are made into new writing and packaging materials. Metals can be melted down to make new metal pieces. So they all have a second life. And if we separate it during the stages of disposal at home, we help to make the entire recycling stream more efficient. And that doesn't just go for PET bottles, it goes for all recyclable waste.
How have things changed in the family business since you started out?
I've been with the company for 10 years now. Honestly speaking, when I first joined part-time I really wasn't excited about the products we made at all. I was kind of doing the 9-5routine. However, when I began to work full time I realised I had to up my game, read up about my work, prepare for factory visits and so on. As I understood more about the business I became increasingly passionate about IVL.
Having studied mechanical engineering at college I was always interested in manufacturing operations and processes, in factories and how they work. In our fibre plants you can basically see the entire process from raw chemical to finished fibre. In packaging business, seeing the PET pellets get extruded into an injection mold and then into a preformed shape that looks like a test tube, and then seeing the test tube get blown up into a model bottle then filled and capped. It is a fun and satisfying process to watch.
Recycling and sustainability are where I really get super excited though. When I got into recycling, there were no experts in it or any such field at IVL. I became the first to explore and know something about recycling. It gave me the confidence to propose and present the recycling business to our top management people–over 200 executives in all.
What lessons have you learned along the way?
I have learned that there are no stupid questions. I've learned that there's no shame in asking simple questions. It's always an eye-opener for the people in the meeting as well. That's the first thing I learned: to just ask your questions. Sometimes it opens up thoughts in other people's minds. However basic the question, it creates brainstorming, collaboration, teamwork and more communication. You should speak your mind because ultimately everyone benefits from your question.
How have you kept personally motivated during the pandemic? Any new hobbies or pastimes?
I picked up tennis pretty much as the pandemic happened. Then there were a few months where I couldn't play because all the tennis courts were closed. So I started running again, pounding the pavements. There were fewer cars on the streets and it felt quite clean when the PMI came down.
And, don’t laugh… I also got into Lego again. I used to love building with Lego as a kid and while working from home I decided to have another go. So far I’ve built a treehouse and the Taj Mahal. We also bought a 1000 piece puzzle, which we've still not completed yet. It's a Van Gogh and it's really difficult.
If you had a magic wand, what one wish would you wish for?
At the moment, would wish that coronavirus disappeared. On a personal level, I love travelling and really miss it. It's when I get my alone time. When I travel I like people-watching, going through airports, being alone on the plane, watching movies, reading, doing my work, reaching that new city, different nationalities and cultures. I like to randomly talk to people when I'm on the move, get into interesting conversations. I miss all of that. I miss chatting a lot.