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A Win-Win Situation for Manufacturers

March 31, 1999

More and more factories throughout Japan are pledging that they will not allow a single ounce of non-recyclable waste outside factory grounds. Nearly all these so-called zero-waste factories began their pledges as strategic attempts by businesses to improve their image, taking for granted that their attempts would increase costs. Now, however, serious efforts at environmental conservation have become an essential element for gaining consumer trust. Moreover, the cost of zero-waste operations is becoming competitive with that of such traditional waste disposal methods as landfilling. Waste-free factories provide a glimpse at the recycling economy of the twenty-first century.

Quick Efforts Give Great Boost to Business
The industry that has advanced the concept of zero emissions more than any other is the beer industry, whose factories produce large quantities of beer dregs. In the atmosphere of stiff market competition in the industry, consideration for the environment caught on as a publicity tool to win over consumers. As a result, Japan's four major brewers converted all 37 of their domestic plants to zero-waste operations by the end of 1998.

Asahi Beer was quicker than the others to seize upon the zero-emissions concept. Starting in the early 1990s Asahi's main brewery, located in Ibaraki (north of Tokyo), began efforts to thoroughly separate all its waste. The brewery pioneered such recycling methods as using the dregs as cattle feed, making carpets out of the plastic bands used for packing, creating bathtub bases out of plastic bags, using bottle tops as construction material, and turning cardboard into recycled paper. All nine of its breweries became waste-free by 1996, ahead of schedule.

Partly as a result, Asahi's main product, Super Dry, became the nation's top-selling brand in 1996, and by 1998 Asahi had the leading share in the total beer market. Total sales in 1998 passed the trillion-yen (8.3 billion U.S. dollars at 120 yen to the dollar) mark for the first time in company history. With ordinary earnings of 50.4 million yen (420 million dollars), an 11% rise against the previous year, Asahi dominated the beer market. While the popularity of its newly developed products played the main role in this success, it cannot be denied that the company's quick efforts at eco-friendly business practices also served to gain the sympathy of consumers.

These environmental measures have come to be profitable as well. The cost of landfilling has skyrocketed, going from 18,000 yen per cubic meter in fiscal 1991 to 38,000 yen in fiscal 1997, a 2.1-fold increase. This means that considering Asahi's landfilling costs seven years ago, the company has reduced costs by several hundred million yen.

Protecting the Environment and Profit Margins
The move to zero-waste operations has been made not only by the beer industry but also by Japanese sake breweries and copier manufacturers. In addition, the electronics, automobile, chemical, and paper-making industries are aiming to achieve zero emissions in the early 2000s. Over 450 million tons of industrial waste are generated each year (as of fiscal 1996), about one-third of which is produced by manufacturers. If the concept of the zero-waste factory catches on, a substantial reduction in the amount of industrial waste is expected.

In addition, manufacturers have begun to look ahead to the era of the recycling economy. Manufacturers of one-time use cameras are creating comprehensive collection and reuse systems, and enterprises are accepting waste from other industries: For instance, some steel mills are using waste plastic as fuel for their blast furnaces. With eco-friendly operations linked to consumer trust, competitiveness, and increased profits, it seems that in the future environmental performance will mean business performance.

Trends in JapanEdited by Japan Echo Inc. based on domestic Japanese news sources. Articles presented here are offered for reference purposes and do not necessarily represent the policy or views of the Japanese Government.