Strategic Sourcing from India – The Growing Economic Powerhouse

Strategic Sourcing from India, the high growth economy that should be in your Global Strategic Sourcing plan

With a population of over 1.2 billion, India is the World’s largest democracy, the second most populated country on the planet. It now boosts the World’s 5th Largest Economy WEF

Over the past decade, India’s integration into the Global Economy has been accompanied by similar levels of economic growth. Leading India to emerge as a Global Economic player and a country capable of playing a significant role in any product Sourcing Strategy.

“We believe India is set to surpass Japan and Germany to become the world’s third-largest economy by 2027 and will have the third-largest stock market by the end of this decade,” says Ridham Desai, Morgan Stanley’s Chief Equity

Building on their unique set of competitive advantages provided by:

  1. Skilled workforce
  2. Lower cost of labour
  3. Cultural alignment and compatibility
  4. Favourable regulatory environment
  5. Improving infrastructure
  6. Near-shoring and Re-shoring initiatives to move away from China benefitting India

The Regulatory environment has fuelled the delivery of six mega trends

1.Supply chain diversification

Fuelled by the global turmoil and moves by many companies to find alternative or additional sourcing partners to supplement China. India has benefitted from many companies in USA and Japan relocating supply chain partners to build future shock resilience.

  1. Key Export Market for India

Industrial components

Textiles

Electronics and EV technology

Manufacturing competitiveness in India has benefitted hugely from skilled work force and lower labour costs allowing highly competitive pricing position v other markets. India steel manufacturing also fuels the competitiveness of the manufacturing sector. The textiles & Apparel markets in addition to the cost and quality of labour India has easy access to high quality raw materials.

EV manufacturing and innovation and India’s ambition to be a Global Hub for EV industry and Technology. India will launch 40 models of EV car models from a range of Car brands. Support for the industry has been further supported by the recently announced the opening of the worlds largest EV hub supporting the manufacture of both vehicles and advanced cells.

3.Government initiatives

The Indian Government continues to strive to create the rights conditions for Export business to flourish. Foreign and domestic investment in manufacturing has increased supporting further output growth.

4.Capex

As many factories reach high levels of utilisation, benefitting from the strong growth in the Indian economy. Investment levels are rising rapidly both from Government and Private enterprise.

5.M&A

Manufacturing companies are using M&A as a way of building scale and adding capabilities to their portfolios and export capability. Deals were $108b in India in 2021 of which 16% were in the Manufacturing sector.

6.PE/VC funding

In the last few year significant investment has flown in India industrial and export sectors. Fuelling growth in the start up Eco System and building transformative growth. The Manufacturing sector benefitted from over 16% of this investment.

Summary Indian Export growth

Indian continues to build its position as a global export powerhouse. Strong infrastructure in pace, continued investment and Government commitment to creating to export growth helps to make India an easy country to do business in.

It has the second largest railway network in the world and a vast coastline with established seaports.

Strategically located nearly 10,000 KM closer to Europe and the USA.

For companies wrestling with the need to evolve their Sourcing Strategies. Starting to look at Off Shoring options or as part of a wider China +1 strategy India should be top of your list of countries to investigate.

Key export areas of

Industrial Components.

Textiles

Electronics particularly EV Technology

Can provide exceptionally high value and innovative products whilst retaining a lower-cost base.

ET2C Is a global sourcing company with over twenty years’ experience working with our clients to deliver their Sourcing Strategies. Our offices in seven countries ensure you always have a team on the ground to be your bridge to your Offshore suppliers. Giving you independent feet on the ground and confidence with fast responses, removing time zone and language challenges.

If you would like to explore sourcing opportunities within India or to discuss your future supply chain challenges.

Please contact us at contact@et2cint.com

Strategic Sourcing from India – The Growing Economic Powerhouse Read More »

Trending topics in Global Sourcing

Global Sourcing and Procurement functions are taking on a new enhanced mission within business. The immediate impact of which is to dramatically broaden their focus and accountabilities.

This fast rate of adaption and development of new responsibilities and challenges creates a need for New Skillsets, Data and Inputs.

For many teams who sit outside Global organisations this requires the rapid building of a New Eco System of partners to support the rapid delivery of new responsibilities. Building both the structure and systems to manage data but also the insight and decision-making skills required for analysis and action planning.

What some of the pressing agenda points for Chief Procurement Officers and Global Sourcing teams?

How can they keep on top of these big challenges as they rapidly evolve?

  1. Supplier Risk Management: Organizations are becoming increasingly concerned about supplier risk, especially in the wake of supply chain disruptions caused by the COVID-19 pandemic. As a result, many companies are investing in supplier risk management tools and strategies to mitigate risk and ensure business continuity.
  2. Near-Shoring: The disruption caused by the COVID-19 pandemic has prompted many organizations to rethink their global supply chain strategies and consider localizing their supply chains. This trend to Near-Shoring is likely to continue as companies look to reduce supply chain risk and improve their shock resilience.
  3. Sustainability and Ethical Sourcing: Sustainability and ethical sourcing are becoming increasingly important to consumers, and as a result, organisations are placing a greater emphasis on sustainable and ethical sourcing practices. This includes
  • Sourcing from suppliers that are environmentally and socially responsible.
  • Measuring and managing the Carbon emissions in their wider Supply chains.
  • Mapping wider Corporate Risks from within the entire Supply Chain.
  1. Digital Transformation: Digital transformation is driving significant changes in the global sourcing landscape, with organizations adopting new technologies such as artificial intelligence, machine learning, and robotic process automation to streamline processes, reduce costs, and improve efficiency.
  2. Supplier Diversity: Many organizations are recognizing the importance of supplier diversity, both from a social responsibility standpoint and to mitigate supplier risk. As a result, there is a growing emphasis on sourcing from diverse suppliers and supporting small and minority-owned businesses.
  3. Trade Policy: Trade policy continues to be a hot topic in global sourcing, with organizations closely monitoring changes in tariffs, trade agreements, and other trade policies that could impact their supply chain operations
  4.  Reshoring: The COVID-19 pandemic has prompted some organizations to consider reshoring their manufacturing operations to reduce supply chain risk and improve agility. Whilst this trend has immediate and obvious appeal as companies look to build more resilient supply chains. It is proving extremely complex and challenging for many organisations.

These 7 topic areas are increasingly important for companies and brands of all sizes to understand and review as part of their Global Sourcing Strategy. For many already stretched teams the need for skilled Partners to support their delivery of answer to these questions is crucial. 

https://et2c.com/corporate-profile/

Trending topics in Global Sourcing Read More »

Implementing a Strategic Sourcing Plan

Why you need a strong Global Sourcing Strategy for your business ?

Implementing a Strategic Sourcing Plan

5 reasons your business will benefit from a well-developed and executed Global Sourcing Strategy.

As the Canton fair opens for the 133rd time, bringing together business from across the globe. There is no better time to review and reflect on the need for a strong Global Sourcing strategy.As Sourcing and Procurement teams manage enhanced missions and a more elevated seat at the corporate table. Refining and delivering the Sourcing Strategy is even more important for corporate success.

  1. Cost savings: A well-executed strategic sourcing plan can help your company reduce sourcing and procurement costs by identifying opportunities to consolidate suppliers, optimize processes and build in new offshore supply partners.
  2. Improved supplier relationships: By working closely with suppliers to develop long-term partnerships, your company can benefit from improved quality, reduced lead times, and increased supplier responsiveness.
  3. Increased efficiency: Strategic sourcing can help your company streamline procurement processes, improve supply chain visibility, and reduce the time and effort required to manage supplier relationships. Speeding up Innovation, Npd and Packaging changes.
  4. Risk management: More strategic supplier partnerships can help mitigate the risks associated with supply chain disruptions, natural disasters, and other unforeseen events. Working together to jointly build a partnership for growth.
  5. Better alignment with business goals: A strategic sourcing plan can help your company align procurement decisions with broader business objectives, such as sustainability, innovation, and growth. Supporting the delivery of wider corporate ESG commitments.

Overall, a well-designed and executed strategic sourcing plan can help your company reduce costs, improve supplier relationships, increase efficiency, mitigate risk, and align procurement decisions with broader business goals.

Why you need a strong Global Sourcing Strategy for your business ? Read More »

Challenges for Sourcing Strategies-Global Sourcing 2.0

Global Sourcing 2.0 will define the response of Procurement and Sourcing Teams to another year of volatility. Inflationary pressure continues to build and the business need for Environmental and Supply Chain Risk management gains momentum, creating huge challenges for Sourcing and Procurement Teams.

Procurement and Sourcing Team leaders who had hoped that economic conditions in 2023 would make their jobs easier than last year are already disappointed. As the new year began, the volatility and inflation of the previous year showed no signs of abating

Many of the dimensions of change impacting business in 2023 are likely to still be with us in some form at the outturn of the year. Procurement and Sourcing functions are responding to these wide-ranging challenges in an equally wide range of structural changes and ways of working adaptations. Sourcing teams are facing the New Challenge of Global Sourcing 2.0

Macroeconomic conditions straining procurement

Understandably, the aggregate effect of these challenges has overwhelmed many procurement functions. Procurement can play a critical role in solving today’s most pressing business problems, but it cannot do so on its own. Winning now requires an entirely new level of resilience improvement and value creation built through a coordinated enterprise-wide effort. Global Sourcing in 2023 requires Procurement teams to sit at the heart of business in an expanded mission.

-Protecting against Corporate margin erosion

-Deliver on Environmental and Social Risk in Supply Chain

-Build Resilience against the next Black Swan event

Accordingly, success in protecting margins, containing cost escalation, and dynamically capturing opportunities requires an expanded mission for the procurement function. CEOs should consider positioning their procurement leaders at the center of the company’s response to the current context, tasked with a clear mandate to protect margins. CPOs can then mobilize executives for cross-functional impact and escalate investments in the talent and systems required to achieve and sustain outperformance.

Visibility-Measurement-Action-Reduction

Procurement leaders can combat volatility, inflation, and shortages and build resilience by taking ten core actions. The first critical element required is to gain transparency over the pressures and change drivers in their supply chain. Only be creating true visibility can they start to identify the key decisions required to deliver high level objectives. This will require

support from all functions across the business and external partners to support Procurement in developing a more agile approach.

Wide ranging Risk Assessment of Supplier Network

· Suppliers. What vulnerabilities—including financial, fulfilment, reputational, and environmental—do suppliers face?

· Supply. How are events affecting the end-to-end value chain? Which categories may be hard to secure in the foreseeable future?

· Cost. How are suppliers’ costs of goods sold (COGS) trending? Can we quantify the inflation or deflation they face? What do the results mean for our company’s P&L?

· Environmental. How are Key Suppliers measuring their Environmental impact and taking active measurable and visible steps to reduce as part of wider range of commitments

· Social, How is the Supply network mapped Globally against potential Social risks and are key suppliers.

Building New Skill Sets to Deliver an Expanded Mission for Procurement

As Procurement leaders wrestle with the new challenges of Global Sourcing 2.0 the need for a new range of additional skills becomes a critical need for delivery.

As Sourcing and Procurement teams play a more central role in business delivering their expanded contribution. The need to rapidly build skills will become a critical enabler to deliver their New Mission.

· Delivering a visible assessment of high level risk, across the entire supply chain

· Identifying Environmental impacts, particularly Emissions generated within Supply base

· Minimising impact on Key suppliers at potential risk of audit fatigue

· Building working Partnerships

Global Sourcing 2.0 represents a shift in priority and ways of working. From the old Procurement model of expecting Suppliers to make and supply to a forecast and at the cheapest possible price.

To one where there is a more collaborative approach to Sourcing Strategy based on visible shared data, shared Environmental and Social

commitments and strong partnership for growth. A shared vision of the future that can inform the future requirements.

We have long argued that an approach based on strong partnerships is a more successful Sourcing model than the focus on Cost and make to Forecast.

Summary

As more companies move to re structure the breadth of the Sourcing team mission within companies core competencies and skill sets need to be created, adopted and utilised.

Sourcing teams will need to rapidly build or bring in the skills required to bring full risk and impact visibility to their supply chain.

ET2C are a leading global sourcing company, with over twenty years’ experience supporting our clients to develop and deliver their sourcing strategies. We have seen a big rise in our clients demands for

-Emissions measurement and management

-Risk identification

-Quality and Compliance. Social & ethical Auditing

As many companies move rapidly towards a future defined by Global Sourcing 2.0. Drop us a line to see how we could support you in your challenges

Email us at Contact@et2cint.com.

Challenges for Sourcing Strategies-Global Sourcing 2.0 Read More »

Canton Fair: A Tipping Point for Global Sourcing?

The 133rd Canton Fair will open in April as China Factory output accelerates, supporting an upturn in China Sourcing but does demand remain subdued?  

Dogged for months by shortages of raw materials, labour instability, a difficult Covid policy, quickening inflation and weakened consumer demand, the world’s industrial engine is still struggling to fire on all cylinders. For many weeks, anticipation has been running hot that China’s reopening would bring a tangible economic lift across Asia and perhaps the rest of the world. That day seems to have finally arrived, with purchasing managers’ indices — especially from China, but also beyond — showing the first glimpses that the World’s second-largest economy will start to lift orders in other corners of the globe.   

The Canton Fair comes at a time when China is reopening to the West post Covid and notably a combination of raw material price softening and low container rates, put the spotlight back on ‘cost’ for buyers where this is now their sole focus in the short to medium term.  The biennial trade fair is one of the high points of global trade events and is expected to welcome over 25,000 exhibitors and buyers from all over the world.   

Is Demand Picking Up?  

Although there is an expectation that this Canton Fair will be large (Buyers and importers will no doubt be chomping at the bit to get out and see some product rather than at a distance!),  what are the factors that will dictate the appetite to get out on that plane?   

1.Consumer Confidence , as a general trend, has certainly softened across many markets due to inflationary pressures which have hit discretionary spend.  Every market has its own domestic     economics that need to be assessed. There is however data coming out that points to a less bleak outlook than initially expected (UK is not likely to be in a recession in 2023 as initially thought) and    this could lead to a pick-up in confidence going deeper into the year.  

Shipping

rates have dropped to Pre Pandemic levels. A year ago container ships were queuing for births in ports to unload their cargoes, shippers were bumping containers and contract rates  were not worth the paper they were written on. Container rates were at an all-time high and shipping companies took full advantage of the market impact (note the amount of blank shippings to prop up the market).  A year on ships are being moth balled and sailings cancelled as demand has plummeted and spots rates dropped to Pre pandemic levels. The recent conference in the USA  Davos by the Sea brought into clear focus the strained relationships and tensions between shippers and shipping line owners. 

Inflationary cost

pressures on Brands, Retailers, Wholesalers and Importers. Pressure on cost has returned in many companies to counter inflationary pressures forcing prices up in front of the  consumer.  As we lived through the turmoil of the pandemic, the overriding issues for supply chain teams was to get product on shelf. As demand softens and inflationary cost pressures build in  companies the focus for sourcing teams has shifted back to a focus on cost.  Will China be a main beneficiary of this?

The Reopening of China

Has been rapid, and appears to be have weathered any Covid storm (we did not see any interruptions to factories even post CNY).  It is seen as a potential catalyst to energise economies across Asia and the wider world back into growth.  China factory output  has expanded at the fastest pace in more than a decade.  The sudden access to this market could  not come any sooner.

Inventory Levels 

Are still high across some sectors. This is impacting buying decisions as companies look to manage higher stock levels due to large buys in 2021/22 and weaker demand.  It is key that this stock is sold through to set companies up for the remainder of the year.

Summary

The Canton Fair appears to be aligned to the reopening of China, and the expectation has to be that many people are anticipating travelling out to Guangzhou and further afield within China to see suppliers for the first time in 3 years.

The need to drive cost benefit to the bottom line is supported by vastly reduced shipping costs compared with the past 18 months and China is still well placed to off cost advantages.   The Year of the Rabbit may just be as prosperous and lucky as intended!

For more information on the Canton Fair, China and other sourcing markets please drop us a line at contact@et2cint.com.

Canton Fair: A Tipping Point for Global Sourcing? Read More »

Malaysia Sourcing: Asia Manufacturing

Malaysia sourcing is a great alternative for any sourcing strategy, but what are the opportunities?

Overview

Malaysia Sourcing is a unique opportunity. Located between two and seven degrees north of the Equator between the Andaman and South China Sea, Malaysia is formed by 13 states. A population of over 33m people live on the islands that are 60% covered by Rain Forest. Its landmass is similar in size to Germany, Norway or Finland.

Economic development:

Malaysia has the third largest economy in South East Asia .Since gaining independence in 1957, Malaysia has successfully diversified its economy from one that was initially agriculture and commodity-based, to one that now plays host to robust manufacturing and service sectors, which have propelled the country to become a leading exporter of electrical appliances, parts, and components.

Openness to trade and investment has been instrumental in employment creation and Malaysian Income Growth, with about 40% of jobs in Malaysia linked to export activities. Malaysia’s economy has been on an upward trajectory, averaging growth of 5.4% since 2010, and is expected to achieve its transition from an upper middle-income economy to a high-income economy by 2024

Key Export Categories for Malaysia

  1. Electrical equipment
  2. Plastics and Plastic products
  3. Medical apparatus
  4. Forestry products
  5. Pepper

Malaysian advantages as a Market for Strategic Sourcing

Malaysia has several factors that make it a country that should not be overlooked in any sourcing strategy. It offers a dynamic and vibrant business environment with a well-developed infrastructure, a productive workforce and supportive pro-business Government policies.

“The focus will have to be on making it easier — ease of doing business,” he said. “That is one of the key opportunities for Malaysia.” Malaysian Trade Minister Tengku Zafrul Aziz

Malaysia has a well-developed infrastructure after investing in Roads, Rail, Ports and Airports to ensure good connectivity. The population has a high level of fluency in English (a legacy of British colonial rule).

The strategically strong position of Malaysia on the Straits of Malacca is on the major trade routes between Europe and China.

Summary

Malaysia has many assets that make it a sourcing country that should be a part of any companies Sourcing Strategy. Whether you are looking to build you first offshore sourcing plans or diversify into a Multi country strategy.

The ease of doing business, high levels of transport connectivity, Pro business government policies and skilled workforce make Malaysia a strong sourcing option.

Malaysia’s economy has been on an upward trajectory, averaging growth of 5.4% since 2010, and is expected to achieve its transition from an upper middle-income economy to a high-income economy by 2024. 

ET2C Is a global sourcing company with over twenty years’ experience working with our clients to deliver their sourcing strategies. Our offices in seven countries ensure you always have a team on the ground to be your bridge to your Off Shore suppliers.

If you would like to explore sourcing opportunities within Malaysia for your sourcing strategy or to discuss your future challenges.

Please contact us at contact@et2cint.com

Malaysia Sourcing: Asia Manufacturing Read More »

Ethical Sourcing: A Conscious and Responsible Buying Approach

Ethical Sourcing ET2C Int. sourcing procurement

Ethical sourcing is increasingly important to a range of stakeholders. Whether the consumer, the retailer, the importer, the manufacturer or even the investors, ethical sourcing aligns with ESG principles and is part of a product’s ‘story’.

Ethical sourcing is a sustainable and responsible approach to supply chain management and sourcing. It is defined by the Chartered Institute of Purchasing & Supply (CIPS),  as “the process of ensuring the products being sourced are obtained in a responsible and sustainable way, that the workers involved in making them are safe and treated fairly and that environmental and social impacts are taken into consideration during the sourcing process.”.

Factory workers China sourcing

 

Why is Ethics Important in Sourcing and Procurement?

Over the past two decades, the consumer has become more aware of the impact a particular product has on the environment or the factory workers being used to produce it. This has driven additional visibility up supply chains to the point where some retailers even provide complete transparency of all their suppliers for their customers to check as they see fit. This is all part of ethical sourcing, and the ability to provide this level of information is just one example of the sourcing process respecting all ethical and environmental standards expected of retailers and brands.

At the same time, companies have taken on greater responsibility when it comes to ethics and how they source products. This requires a much greater understanding of which manufacturer a company decides to partner with, what their beliefs are and what their environmental footprint is like. Some companies are even certifying as a B-Corp – their purpose is to build a more inclusive and sustainable economy – which includes elements of ethical sourcing.

Ultimately, ethical sourcing will help remove abusive practices. There is no reason why slavery or child labour should be tolerated in this modern world. The more this can be enforced by the companies doing the sourcing, the less the commercial benefit for those profiteering from these abhorrent practices.

Therefore, it is paramount that buyers selecting and managing suppliers look out for signs of such activities in their supply chains.

policy contract sourcing procurement

The Ethical Trading Initiative (“ETI”) is internationally recognized as a ‘Base Code when it comes to labour practices. The ETI Base Code is structured on existing conventions of the International Labour Organisation, and has nine clauses that define ethical practices:

  1. Employment is freely chosen
  2. Freedom of association and the right of collective bargaining are respected
  3. Working conditions are safe and hygienic
  4. Child labour shall not be used
  5. Local living wages are paid at national legal standards
  6. Working hours are not excessive, complying with national law
  7. No discrimination is practiced
  8. Work performed must be based on a recognised employment relationship established through national law and practice
  9. No harsh or inhumane treatment is allowed

The Benefits of Ethical Sourcing

Commonly, companies often commit to ethical and sustainable practices for obvious reasons such as risk mitigation or improving brand image to grow sales. However, there are even more benefits for companies that opt for ethical sourcing and do it properly.

1. Employee Engagement

Many studies have shown that companies with solid Corporate Social Responsibility programs not only boost a strong public image but also engage more people from inside the organisation by enhancing higher employee morale and creating a culture of loyalty.

As a consequence, a reputation for sustainability and ethics often makes an organisation a more attractive proposition as a prospective employer than those who have less of a purpose.

2. Customer Satisfaction and Market Shares Increase

Now more than ever, customers expect companies to be more ethical and sustainable in their business practices and actively value brands that are doing so. A few companies have in fact increased their market share by committing to ethical sourcing practices (please note that it is important to genuinely commit to such practices rather than simply go through it as an exercise in ‘green-washing’).

Several ethically sourced products made from organic, renewable, or recycled materials have an extremely loyal customer base (AllBirds for example). Aligning your products and services with customers who value sustainable business practices can increase your company’s market share.

apparel fashion factory ethical sourcing

In fact, according to the data from the OpenText survey (September 2021), nine in ten global consumers want to buy products sourced in a responsible and sustainable way and 83% would pay more for goods that are ethically produced. Interestingly, consumer demand for ethically sourced products has increased during the global pandemic. The survey shows that nearly 20 per cent of the respondents said that this has only mattered to them within the last year, which indicates that the Covid pandemic, and some of the product shortages we have faced, has made consumers re-evaluate their stance on ethical sourcing.

3. Margin Growth

Although products that are sustainable and ethically sourced generally have a higher cost, there is evidence that ethical sourcing processes both can reduce costs over the long term and also support higher sales prices in store. In 2015, The World Economic Forum estimated that sustainable and ethical sourcing processes reduce supply chain costs from 9%-16%. In addition, they can increase revenue by up to 20% for responsible products, and increase brand value by 15%-30%.

Some examples are the use of energy-saving light sources, the improvement of insulation, the elimination of wasteful steps and processes within production, to name a few. Or, in addition, the use of environmentally friendly materials.

4. Brand Boost and Accountability Enhancement

One of the benefits of ethical sourcing is improving the reputation of the brands your business produces.
The reason behind the brand boost is that by adopting ethical processes, transparency and accountability become major components of your supply chain. As stated above, this can be compelling from a consumer perspective, but it is important that it is a genuine position to drive real benefits. A measure of this is how well employees engage in the companies’ beliefs.

5. Make a Difference

It sometimes just feels good to do good! At whatever level, positively impacting a manufacturer, a worker or an employee feels like the right thing to do. Make that difference!

Summary

At ET2C, we are already working with our clients on ethical sourcing and best practices when it comes to managing their supplier base. With a team on the ground, we make sure we provide the visibility required to our clients. For more information, please contact us at contact@et2cint.com.

Ethical Sourcing: A Conscious and Responsible Buying Approach Read More »

COP26: a Focus on Decarbonization & Supply Chains

COP26 a Focus on Decarbonization Supply Chains ET2C Int.

COP26 presented an opportunity for World Leaders, the business community and other stakeholders to come together and agree tangible outputs to attempt to reverse climate change.

Overview

COP26 brought a melee of Politicians, CEOs, UN Ambassadors, Environmentalists and protesters together in the Scottish city of Glasgow to discuss how we can possibly reverse the damage already done to our planet. With an immediate purpose of moving towards carbon neutrality (“net zero”) by the middle of the century, countries were tasked to present ambitious targets for reducing emissions. And this all with the aim of keeping the 1.5 degrees rise in global temperatures within reach. This would only be possible with a broad commitment to accelerate the phase-out of coal burning, dramatically reduce deforestation, speed up the transition into electric vehicles and encourage investment in renewables.

At the outset, amidst a palpable wave of optimism, the pledges and commitments came thick and fast as the event opened with World leaders attending and setting out their aspirations. Even with some noticeable absentees, there did appear to be a road map to making a real difference. But as the curtain came down on the event, there was the inevitable watering-down in the language of some of the agreements leaving some activists pointing to a lack of enforcement or mandatory provisions being included. So after all the talking, what were the wins and losses of COP26?

 

COP26 ET2C Int.
Fig 1. Scorecard, Bloomberg, 13th November

 

There were some clear ‘wins’ albeit not as clear cut as some people would have liked. The rhetoric during the event was heavily laden with the need for ‘now’ and ‘protecting future generations. It will have to be seen if there is now sufficient momentum and financial clout to make a tangible difference to the climate precipice that we all find ourselves on.

COP26 & Supply Chains

Globalisation has led to greater connectivity across the world, which has, in turn, lead to greater movement of people and goods across oceans and through the air. For supply chains, containerization enabled goods to move across oceans with greater ease and subsequently in greater volumes. All this has resulted in a significant carbon footprint. The fact is that 62% of carbon output is related to supply chains. And with 80% of goods being transported across maritime routes on container ships, there is a clear need for the shipping industry to move to carbon neutrality as part of this broader target of a net-zero by the middle of the century.

carbon pollution

As companies involved in sourcing, producing and the movement of products across borders, what does this all mean for our own businesses? There is no one solution and the answer is layered with complexity. Perhaps the simplest solution is to stop doing anything that has a carbon impact, which is not particularly practical and would not have a positive economic input. The challenge is that there is a reliance on the ‘collective.’ A company that is shipping from Asia relies on the carbon output of the factory and, even more relevant, the shipper and various modes of transport to get the goods to and from the Ports. These are not aspects that one can directly control.

The Collective

This though is the point. There needs to be a collective. As COP26 set out to achieve, Governments need to be investing in the technology for clean energy alongside incentives for private investment in renewables that make commercial sense for the future. There needs to be a genuine ‘Green Economy’ that works for all nations.

So, what can we do together to make this happen? Even though these may be small initiatives, the more companies that adopt them, the greater the impact and the more the landscape shifts in the right direction.

1. Product

Where possible, identify products that have a lower carbon footprint in terms of their use and the materials that they are made with.

2. Manufacturing

Think about your suppliers’ own carbon footprint and understand what that carbon output may be so that you can contribute to carbon offset schemes (tree planting etc.).

3. Green Shipping

Look to consolidate containers where you can maximize the space available. Also, engage with your carriers around their plans for ‘clean cargo technology.’ Hydrogen will power container ships of the future, which will have zero carbon output.

ship container cargo logistics sourcing

4. Go Electric

Where possible use electric vehicles within your supply chain, whether that is a provider or your own fleet.

5. Cut Travel

Covid has already halted widespread corporate travel, but as we emerge from this Pandemic it will be important to only travel when necessary. Look at alternative ways of managing overseas suppliers, whether via technology or local partners on the ground.

Summary

The UN general secretary has issued a red alert for Humanity. The need for action is now, and we all have a part to play. As the President of COP26 said in his closing remarks:

“We can now say with credibility that we have kept 1.5 degrees alive. But, its pulse is weak and it will only survive if we keep our promises and translate commitments into rapid action…
From here, we must now move forward together and deliver on the expectations set out in the Glasgow Climate Pact, and close the vast gap which remains. Because as Prime Minister Mia Mottley told us at the start of this conference, for Barbados and other small island states, ‘two degrees is a death sentence.’
It is up to all of us to sustain our lodestar of keeping 1.5 degrees within reach and to continue our efforts to get finance flowing and boost adaptation. After the collective dedication which has delivered the Glasgow Climate Pact, our work here cannot be wasted.” COP26 President, Alok Sharma.

At ET2C, we are looking at how we can reduce our own carbon footprint and are working with customers on a range of solutions. For more information, please contact us at contact@et2cint.com.

COP26: a Focus on Decarbonization & Supply Chains Read More »

Natural Materials: A Sustainable Choice for Home Decor

Natural Materials You can Use for Your Home

Natural materials are a popular choice for furniture and other interior decoration within the home due to their range of physical and aesthetic properties.

Natural materials fit in with the sustainability movement. We are at a place in time where the environment and the planet’s future existence sits in the crosshairs of numerous stakeholders from the ‘consumer’ to charities, companies, financiers, and even future kings. And in a month’s time, the great and good of global leaders and politicians will meet in Glasgow for CO26 (a conference dedicated to Climate Change). Nobody, therefore, needs to be reminded how vulnerable our planet has become.

Fortunately, more and more professionals and homeowners are opting for ‘greener’ lifestyles to lessen their carbon footprint, which includes the use of more natural materials in the products that they have been using at their homes. There are many reasons to use natural products in your home from reducing environmental impacts to decreasing potential health hazards – natural materials present an array of positive benefits.

The Benefits of ‘Natural’

There has been a wide array of research done on the benefits of natural materials and our interaction with them in the home. Here are some of the key benefits:

• Longer Lasting

Natural materials not only have the ability to last a long time but in some cases will look even better with age. Just think of that old oak table that has stood the test of time!

• Creating Calm and Energy

Almost half of the homeowners (49%) believe having natural materials in their homes makes them feel discernibly happier than when surrounded by artificial materials, according to research from the Wood Window Alliance. Especially whilst the world is suffering from this pandemic, the self-quarantine and stay-at-home orders have exposed the complex relationships we have with our homes, underscoring how important it is to have a healthy space in which to live and work.

• Design & Style

Natural materials can be adapted to a range of different styles. If you prefer rustic chic, wood and natural stone are the way to go; alternatively, to achieve a minimalist look, consider bamboo and canvas.

Natural Materials for the Home

The natural materials trend focuses on the use of tactile materials like rattan, bamboo, seagrass, and cork. These materials all have an honest authenticity that we as human beings find naturally seductive. It is probably something to do with our primal need to feel connected to nature.
We often hear the phrase “Bring the Outdoor Inside”. The expansion of the urban environment, lack of outdoor space, technological advances and global pandemic have led to us spending more and more time indoors. As a result, we are becoming increasingly disconnected from nature. However, according to the latest research from the Wood Window Alliance, 82% of people feel happier when surrounded by greenery.

Rattan

Rattan manages an enduringly modern look. This is especially true among the wide selection of home decor and furniture pieces made today like mid-century modern seating and ’70s-inspired looped rattan bed frames. It is a material that suits almost every interior aesthetic, design, and style– from traditional to modern and coastal to contemporary. Rattan’s properties allow it to be bent every which way for more solid, sculptural furnishings while woven raffias and jutes bring an earthy texture to everyday home objects like area rugs and pendant lamps.

rattan furniture sourcing natural materials procurement design indoor ET2C Int.

Seagrass

Seagrass is exactly as the name implies, a grass that grows in the sea or in areas that have saltwater. Seagrass is a popular material in the North of Vietnam, particularly Thai Binh and Thanh Hoa provinces. A lot of the seagrass used for manufacturing home decor products is farmed to be cut and processed specifically for seagrass weaving. This seagrass is cut, dried, spun, dyed, and then woven into many different items, including baskets, lampshades, furniture, and area rugs.

sea grass furniture materials sourcing procurement design ET2C Int.

The application of this raw material includes:

Water Hyacinth

Water hyacinth is a fast-growing aquatic plant, widely found in the tropical regions (i.e. Vietnam, Philippines, South part of China) that has been recognised as one of the top 10 worst weeds in the world. Nowadays, people make use of what is so called “natural waste” or “nuisance” and turn them into marketable goods which could benefit the environment as well as yield the income for the local people. Once dried, water hyacinth still has spongy stems with a warm honey yellow colour, which gives a delicate, soft texture and adds earthy tones to woven products such as baskets, trays, planters, etc.

water hyacinth fiber

Wood

Wood is the mainstay natural material that is used in your home; it can be furniture, kitchenware, home décor, etc. Also, there is such a diverse range of different woods that can be used, i.e. pine, paulownia, acacia, oak to name a few. Each of these will give your interior design a different feel or a different flavour. Oak is perhaps the most popular choice for interior design due to its natural beauty and hard-wearing nature. But, there are also over 600 different species of oak, so no one oak table will look exactly the same as another. Cedarwood and walnut wood are also typically used for flooring and furniture, with the former boasting a distinct grain that makes it particularly attractive.

wood table furniture design living room natural style
Wood is a renewable material that can be regrown naturally through replanting. The processing of wood also has far fewer environmental implications than concrete or steel. Not only that but because of its natural structure, wood is more energy-efficient and will help to hold heat into a home and even regulate humidity to a small degree.

 

Summary

At ET2C, we have been working across South East Asia for the past decade where a lot of these natural materials can be found, and have experience incorporating them into products for the home. Whether it is FSC accreditation, finding the right material supplier or the best product for your customer, please contact us at contact@et2cint.com.

 

Natural Materials: A Sustainable Choice for Home Decor Read More »

Plastic Packaging: Is it REALLY recyclable?

Plastic Packaging Is it REALLY recyclable ET2C int.

Plastic packaging is convenient and efficient but its tremendous impact on the environment obliges us to adopt new sustainable solutions.

Plastic packaging can be extremely wasteful due to how we use and dispose of it. And this impacts the Earth’s ecosystems on which we depend. Due to poor product design and lack of political infrastructure, the majority of plastic waste is sent to landfills or ends up as rubbish scattered across our lands and seas.
In addition, it has been estimated that at least 8 million tons of plastic are dumped in the ocean every year. Plastic pollution threatens wildlife, alters ecosystems and poses risks to human health.

Sustainable Solutions

Ultimately, it is the end-use of plastic and how we dispose of it that is having such an impact on our environment. This is unlikely to change immediately and it is therefore necessary to find solutions that could reduce the production and the use of plastic packaging in order to decrease the chance of such damage. Some key areas of focus should be:

• Invest in innovative ways to package goods that reduce plastic use and packaging waste

Previously, we already discussed some innovative ideas to replace packaging especially in the food packaging industry. Some of them are certainly bioplastics, dissolving and edible plastics, not to mention ‘no packaging’ solutions.

• Increase recyclable content

While making the packaging 100 percent recyclable is important, reusing material that has already been produced reduces the environmental costs of production and disposal. Therefore, not only it is important to cut down the amount of plastic used in packaging but also switching to higher recycled content and making sure that all the packaging components are recyclable.

• Standardize recycling labels on products

Over the past couple of years, we have seen a wider variety of plastics are also being used to package the everyday items we purchase. This complexity has in many ways altered consumers’ understanding of what they think is recyclable. More and more, non-recyclables are finding their way into single-stream containers. Therefore, contamination rates – or the percentage of trash mixed with recyclables – has steadily climbed over the years. Subsequently, about a quarter of everything consumers place in recycling bins ultimately is not able to be recycled by the programs that collect them.

The Resin Identification Code (RIC)

A product made of plastic is often stamped with a resin code, which is a number between one and seven inside a small triangle made of arrows. However, the presence of a resin code doesn’t necessarily mean that the product can be recycled. It is the number inside the triangle that counts, because each number corresponds to a different type of plastic.
The symbols—then collectively called the Resin Identification Code (RIC)—were developed in 1988 by the organization now known as the Plastics Industry Association.

Plastic types

Plastic Packaging Types

Understanding the plastic types can help consumers like you make more informed decisions related to your health and the environment.

If you look at the number inside the triangle on your plastic packaging, it will range from one to seven. This will tell you both the type of plastic used and which type is recyclable or even reusable.

1. PET or PETE – Polyethylene Terephthalate

This is the most common plastic for single-use bottled beverages. This material also has wide applications in the textile, medical, electrical/electronic and automotive industries. Certainly, it is inexpensive, lightweight and easy to recycle.

Plastic Packaging PET PETE

Recyclable: YES, PET is 100% recyclable. In fact, it is one of the most recycled thermoplastics. It can be picked up through most curbside recycling programs as long as it has been emptied and rinsed of any food.

Reusable: Technically yes, but not suggested. PET is meant for single-use applications; repeated use increases the risk of leaching and bacterial growth.

2. HDPE – High-Density Polyethylene

It is a versatile material with many uses, especially when it comes to packaging. This type of plastic is extremely common and one of the safest to use. Most milk jugs, detergent containers, and oil bottles are made from HDPE. It carries low risk of leaching and is readily recyclable into many types of goods.

Plastic 2 HDPE Sustainability Recycle

Recyclable: YES.

Reusable: technically yes, but generally the bottles made of HDPE are intended for only one-time use.

3. PVC – Polyvinyl Chloride

PVC is one of the most widely produced synthetic plastic polymer (about 40 million tons of PVC are produced each year). It is a flexible plastic and generally cheap so it is used for a huge array of household products and packaging.

The rigid form of PVC is used in construction for pipe and in profile applications such as doors and windows. It is also used in making bottles, non-food packaging, food-covering sheets and cards. It can be made softer and more flexible by the addition of plasticizers. In this form, it is also used in plumbing, electrical cable insulation, imitation leather, flooring, signage, inflatable products and many applications where it replaces rubber.

3 Plastic Plastic PVC Sustainability Recycle

Recyclable: Most consumer recyclers will not take PVC products. A major problem in the recycling of PVC is the high chlorine content in raw PVC and high levels of hazardous additives added to the polymer to achieve the desired material quality. As a result, PVC requires separation from other plastics before recycling.

Reusable: not suggested. They contain toxins which leach throughout its entire life cycle.

4. LDPE – Low-Density Polyethylene

This is a hard- flexible thermoplastic with many applications. In fact, most plastic wrapping is made of this material. It is also used to make grocery bags and the bags that hold newspapers, sliced bread loaves and fresh produce, among other things. While this may not be the most popular type of plastic for household supplies and food containers, LDPE is present in the home in the form of plastic bags that we use for frozen foods and such like.

4 Plastic LDPE Sustainability Recycle

Recyclable: LDPE can be recycled, however, the way this is done, and the complexities faced depends on the nature of the plastic. For example, flexible products are more difficult to recycle, especially as they tend to be contaminated by the item they are packaging. The more rigid form of LDPE is easier to recycle and it can often be collected and recycled by curbside recycling programs. You do need to check with your Local Authority to make sure that it can be recycled within your area.

Reusable: YES.

5. PP – Polypropylene

This type of plastic has a high melting point, so it is often chosen for containers that will hold hot liquid. In fact, PP is used to make the food containers for products like yogurt, sour cream and margarine. It is also made into straws, rope, carpet and bottle caps. A number of Governments have completely banned this type of material when in ‘straw’ format.

5 PP Plastic Sustainability Recycle

Recyclable: It is gradually becoming more accepted by recyclers. Because it breaks apart so easily, it is also found ingested by marine animals and littering beaches.

Reusable: Not suggested. Chemicals present in polystyrene have been linked with human health and reproductive system dysfunction. Polystyrene may leach styrene, a possible human carcinogen, into food products (especially when heated in a microwave).

6. PS – Polystyrene or Styrofoam

This material is a naturally transparent thermoplastic that is available as both a typical solid plastic as well in the form of a rigid foam material. PS plastic is commonly used in a variety of consumer product applications and is also particularly useful for commercial packaging. The solid plastic form of polystyrene is commonly used in medical device applications or in day-to-day items. The foam form of polystyrene is used most often as a packing material.
Since polystyrene is lightweight and easy to form into plastic materials, it also breaks effortlessly, making it more harmful to the environment. Beaches all over the world are littered with pieces of polystyrene, endangering the health of marine animals.

6 PS Plastic Sustainability Recycle

Recyclable: It is generally considered to be difficult to recycle.

Reusable: YES.

7. Miscellaneous Plastics

A wide variety of plastic resins that do not fit into the previous categories are lumped into this one. These plastics include nylon, PLA (polylactic acid), and polycarbonate and are found in certain food containers, signs and displays, computers and electronic devices, DVDs, sunglasses, and bulletproof materials.

7 Plastic Sustainability Recycle

Recyclable: These plastics are almost never recycled, but they could be transformed into plastic lumber and certain custom-made products.

Reusable: YES.

Plastic Packaging Recyclability

The conditions to successfully recycle plastics are multiple and in some cases more complex than others. Not only have you to consider the particular type of material but also its current conditions, for example regarding cleanliness, contamination and toxicity. Moreover, in each country, every town and city has different recycling programs, so you will often have to check your location’s rules to find out exactly what you can recycle. Not to mention that these could change over the time.

Sustainable Packaging – Our commitment

Plastic is not a bad material, but we have a shared responsibility to ensure that we are using it in manufacturing responsibly and giving consumers the opportunity to dispose of it in the least harmful way to the environment. We are working with our clients on many initiatives around sustainable packaging and products from across our sourcing markets. This includes bamboo packaging, the use of PCR in plastic packaging and re-engineering boxes to be made from pulp materials. Understanding your market, consumer and price-points are key aspects of identifying opportunities for you to look at sustainable packaging options.

We have local teams on the ground already working with suppliers in this field. Surely, we will be more than happy to discuss your needs with you. For all your sustainable packaging requirements, please contact us at contact@et2cint.com

 

Plastic Packaging: Is it REALLY recyclable? Read More »

Scroll to Top