President Museveni letter to PM Ruhakana Rugunda – “Re: Existence of a “Sugar Board” in Kampala” (19.08.2018)

Kakira Sugar Limited addressing farmers strike (02.07.2018)

Mzee complains today about waste, however he haven’t rehabilitated sugar industry or revamped pharmaceutical industry either!

“In this regard, we need to learn and apply lessons from emerging economies such as India, whose total healthcare industry revenue is expected to increase from US$ 110 billion in 2016 to US$ 372 billion in 2022 in response to deliberate investments in telemedicine, manufacturing of medicines and health technologies, medical tourism, health workforce training and risk pooling/health insurance, among others. In order to achieve this, we need to plan in a harmonized way. In Uganda, for instance, we, indeed, have a nascent pharmaceutical industry producing Aids/HIV, Malaria, Hepatitis-B, pharmaceuticals, etc. drugs. These are, however, still using imported pharmaceutical grade starch and imported pharmaceutical grade sugar. The pharmaceutical grade starch and sugar are crucial for making tablets and syrups for children’s medicines. Yet, the starch is from maize and cassava and the pharmaceutical grade sugar is from sugar. I am told the drugs would be 20% cheaper. Moreover, apart from helping in the pharmaceutical industry, more refined sugar is also needed in the soft drinks industry. Uganda is squandering US$34 million per year importing refined sugar for the soft drinks, about US$ 20 million for importing the pharmaceutical grade starches not including the other raw materials, US$ 77million for taking patients to India etc. Africa is incredibly rich but wasteful” (Yoweri Kaguta Museveni at THE OFFICIAL OPENING OF THE JOINT EAC HEADS OF STATE RETREAT ON INFRASTRUCTURE AND HEALTH FINANCING AND DEVELOPMENT, 22.02.2018).

Seems like the 1980s World Bank loans to restart Kakira Sugar Works hasn’t done enough, since the Ugandan state did right after the National Resistance Army takeover of the state. They went into an arrangement with the World Bank getting loans for the company, to restart. That deal was done 8^th March 1988. As the documents said back in 198:

“Uganda currently imports US$15-20 million worth of sugar annually, which ranks second only to petroleum imports. Import substitution through restoration of domestic production capacity is therefore a high priority and eminently justified given the considerable comparative advantage Uganda enjoys as a result of its landlocked situation. Conditions for sugar production at Kakira are highly favorable. Cane growing benefits from excellent soils, good rainfall distribution (requiring only limited sunplementary irrigation) and relatively low levels of inputs of fertilizers and pesticides. The project brings back to the Kakira complex the original owners who have a demonstrated ability to manage sugar operations at Kakira and elsewhere” (SUGAR REHABILITATION PROJECT, 08.03.1988).

Therefore, what the President said today, the Sugar Rehabilitation Project, which was done to stop the heavy imports of sugar and for consumption, has clearly not worked as projected. Since his own state is squandering their resources and not even following the loans to make the project work. That is my take on it. The president of 32 years has clearly mismanaged this and not finished his job. Since he hasn’t been able to rehabilitate the industry.

When it comes to pharmaceutical industry there massive challenges, not just the sugar starch for medicine coverage of the pills. Nevertheless, the whole arrangement, since the technology to operate these machines are imported, as well is the parts. Not only the sugar starch, but also the ingredients are imported too, than you have few companies who has automated manufactures, which makes hard to make medicine on a larger scale. It is also high operation cost, because of use of back-up generators because of blackouts and shortfall of electricity. Because of this, it is expensive to have cold storage of the medicine and have a storage for the final products.

So the Idea from Museveni that it is simple, it is the whole system around it, that makes it more profitable to import ready made medicine, than actually produce it. Even if the added value of production would be there, but with the circumstances put by United Nations Industrial Development Organization, seemingly it is from 2009. However, the state of affairs hasn’t changed that much.

We can really estimate, that the adjustment and the needed organization to pull forward both industries during the years of NRM hasn’t been totally fruitful. If so, why would he complain about the imports of sugar and medicine, when he hasn’t been able to make it function with his 32 years of reign? Someone who has 3 decades, should have the ability and time to find the information, finalize plans and execute as seen fit. That is if he cared about the industries in question and their possible engines for growth and riches of Africa. Nevertheless, he hasn’t cared and haven’t used the time wisely. He has used the time bitching and not acting. That is just the way things is and it isn’t becoming better either.

He could have made sure that the pharmaceutical industry had energy, had the sufficient organization behind it to make the medicine, not only import and assemble certain medicine, he could have made sure the sugar industry was profitable and had the equipment to make the refined sugar used in the pharmaceutical industry. However, both is a lost cause, because it takes money and time. Both, is something he doesn’t have, since the narrative isn’t making him wealthy.

Alas, he we are at the status quo, with a President running for life and complaining about waste. When he has wasted 32 years and not made effort to change it. It is all talk and no fire. Peace.

Looking into the inflation of 1987 as the Sugar prices are rising in today’s Uganda!

“We have had a wonderful collaboration with IMF since 1987. We have managed to control inflation. By controlling inflation, we have succeeded in preserving the people’s earnings” – Yoweri Kaguta Museveni (State House, 2017).

Well, there been many who has set similarities with the inflation and price shocks of the year 1987. The Republic of Uganda has been through their mess before. The government of Uganda and the National Resistance Movement/Army (NRM/A) had just taken power in 1986. This was a year after the coup d‘etat, which brought the NRA into power. President Yoweri Kaguta Museveni in collaboration with International Monetary Fund (IMF), which had agreements and Structural Adjustment Program (SAP), which promoted deregulation and less state control of the economy. This was also put forward to settle inflation and the deficit that the state had.

So, because some has put similarities between 1987 and 2017, as the prices has gone from about 3,000 Uganda Shillings (UGX) in 2016 and 7,000 Uganda Shillings (UGX) in 2017. There is clearly that there was problems in 1987, but whole another level. The Sugar Industry wasn’t established, the economy of Uganda needed export of coffee and this was the sole benefit of foreign currency into the economy.

“Inflation in Uganda is running as high as 200 percent, and low prices to farmers serve as a disincentive to agricultural production in a country of rich soil and mild equatorial climate” (…) “At the center of the debate is the issue of devaluation. In its first year in office, the Government revalued the currency from 5,000 to 1,400 shillings to the dollar, saying that the move would make imports cheaper. But exports have become increasingly expensive. Devaluation Debated. Some hard-line nationalists in Government insist that the cost of devaluation would be devastating. The cost of such imports as sugar, cooking oil and soap would increase significantly, they say, making the average Ugandan even worse off than he is now” (Rule, 1987).

“In 1987 the Uganda shilling was demonetizated during the currency reform and a currency conversion tax at a rate of 30% was imposed to further reduce excessive liquidity in the economy. There was an immediate drop in average inflation from 360.7% in May to about 200% cent in June. However, with the possible fears of complex and drastic currency reform, the premium shot up, representing essentially a portfolio shift to foreign currency, and possible capital flight, and suppressed inflation. The intended aim of the conversion tax, apart from reducing excessive liquidity, was to lend money raised through this tax to the government. This was to finance the budget deficit over a short period, rather than financing it through printing more money. Nonetheless, inflation shot up again within three months mainly due to renewed monetary financing of increased government expenditure, domestic credit expansion by commercial banks to meet coffee financing requirements and financing of the newly launched rural farmers scheme” (Barungi, P: 10-11, 1997)

“Prices for sugar and vegetable oil (both imported goods) increased rapidly in the early part of the year, falling between May and August — replicating the pattern of the premium between the parallel and the official exchange rate. The subsequent fall in sugar prices and stability of cooking oil prices were due to greater official imports. Inflationary pressures on food prices have been aggravated by supply shortages on account of severe transportation problems” (World Bank; P: 36, 1988).

“In October 1986, Mulema was replaced by Dr. Crispus Kiyonga, who has a medical background Kiyonga has a difficult task. The government’s finances are shaky at best. In an attempt to enable Ugandan citizens to purchase imported consumer goods, the government fixes their prices below world prices. This, of course, puts considerable pressure on the government’s finances: for example, in July 1986 the government imported $4.8 million worth of sugar to sell at subsidized prices” (Warnock & Conway, 1999).

Perspective from Kakensa: “Today sugar costs 7000/- per kilo. When Museveni came to power in 1986 each kilo was at 4/-(four shillings). Immediately he came to power he said Ugandan shilling had lost value, in 1987 all money was changed, not only changed but two zeros were cut off to give it value on addition to the 30% levied on each shilling. This means on every 100 shillings, you got 70cents. Those who had 100,000/- got 700/-” (Kakensa Media, 12.05.2017).

We can see there was certain aspects, but the sugar industry now is different. The Sugar factories are now real and the business are now in full affect. While, in 1987 the state needed coffee exports to get funding and foreign currency. The sugar was imported and was put on fixed prices. The inflation back then was because of the crashing economy after the bush-war and the effects of it. The Sugar prices now are rising for different reasons. These reasons are the yields of sugar-cane, the hoarding of sugar and the export of surplus sugar. Also, the production of ethanol and bio-fuel. That was not the situation and context in the past.

Still, history is repeating itself, since the NRM, let the prices run as crazy in the past. The price has gone up a 100% in a years time. Which, means the prices who doubled from 3000 to 7000 Uganda Shillings. This is not a stable and the ones who get hurt is the consumer and Ugandan citizens. Peace.

Reference:

Barungi, Barbara Mbire – ‘EXCHANGE RATE POLICY AND INFLATION: THE CASE OF UGANDA’ (March 1997).

Rule, Sheila – ‘UGANDA, AT PEACE, IS FACING ECONOMIC BATTLES’ (28.01.2017) link:http://www.nytimes.com/1987/01/28/world/uganda-at-peace-is-facing-economic-battles.html

State House Uganda – ‘President commends Uganda – IMF collaboration since 1987’ (27.01.2017) link: http://statehouse.go.ug/media/news/2017/01/27/president-commends-uganda-%E2%80%93-imf-collaboration-1987

Warnock, Frank & Conway, Patrick – ‘Post-Conflict Recovery in Uganda’ (1999)

World Bank – ‘Report No. 7439-UG: Uganda – Towards Stabilization and Economic Recovery’ (29.09.1988)

A look into the rising Sugar prices in Uganda!

I commissioned a state-of-the-art ethanol distillery at Kakira Sugar Factory in Jinja today (Museveni, 23rd January 2017)

There are various of reasons for the rising prices of Sugar and processed sugar in Uganda. This isn’t the first time or last cycle of inflation on the prices of this common commodity. Sugar is common in Uganda for concept of having in it in the chai or the milk tea. To sweeten the milk and the black tea the Ugandans drink. Therefore, the Ugandans are needing and using lots of it on daily basis. It isn’t a luxurious goods, but a daily usage, for ordinary use. It has become staple and is staple together with matooke, cassava, rice and maize flour. This is all seemed as basic for the Ugandan people. Sugar is something very important. Therefore, the rising prices says something is out balance.

The balance have now been lost a year after the election. The prices of goods and food was also rising in 2011, therefore, the Republic had the Walk 2 Work demonstrations. These was demonstrations against the rising food prices, which also meant the sugar at that time went up. The same is happening now. With also on alternative exception, that the producers are not only creating sugar for consumption anymore, but ethanol and bio-fuel. Therefore, the produce and profits are going to export bio-fuel and other products, instead of the sugar that the consumers in Uganda uses. This also is an explanation for the rising prices, as well the added exports to Kenya, where the producers gain more selling it there. Than in Uganda, take a look!

In April 2017 USMA commented:

“Uganda Sugar Manufacturers Association (USMA) says the increase in sugar prices has been prompted by the increase in cost of production and the deprecating shillings against major currencies. The Association’s Chairperson, Jim Kabeho says sugar millers were forced to announce what he called a paltry 4 percent increase on each 50-kilogram bag on ex-factory price. The increase according to Kabeho saw a 50-kilogram bag of sugar trading at one hundred and eighty five thousand shillings up from one hundred and seventy thousand shillings” (…) “Meanwhile a source at the Ministry of Trade Industry and Cooperatives who asked for anonymity says the Ministry suspects that the big players like Kakira could have decided not sell its sugar to the market so as to increase production at the ethanol its ethanol plant. The sources says sugar mills with ethanol plants are finally making money on sugar through on co-generation of power, alcohol and ethanol” (URN, 2017).

In April in Masindi:

“Masindi district leaders have risen up against the Masindi district Resident Commissioner, Godfrey Nyakahuma over stopping sugar cane buyers from buying cane from Masindi district. Last week, Nyakahuma launched an operation of impounding trucks of all sugar cane buyers who buy sugar cane from Kinyara sugar limited out growers and over five trucks loaded with cane were impounded by police” (…) “Byaruhanga added that that is a sign indicating that Kinyara sugar Factory has no capacity to crush the available sugar cane adding that since Uganda has a liberalized economy let everyone come and buy the abundant cane available instead of leaving the farmers suffer with the monopoly of Kinyara sugar factory. Amanyire Joshua the former mayor Masindi municipality said that if Kinyara is saying that sugar cane buyers are poachers, Kinyara sugar factory is a smuggler because it is also doing the same. Mary Mujumura the deputy speaker Masindi district blamed Byaruhanga Moses the presidential advisor on political affairs for failing to advise the president on political issues saying that he is not supposed to enter into business matters” (Gucwaki, 2017).

In May 2017:

“From last year’s average of Shs 3,000 per kilo of sugar, the price shot to Shs 4,000 early this year and is now hovering over Shs 5,500. A kilo of Kinyara sugar is the cheapest at Shs 5000, while Kakira sugar is selling at 6,000 a kilo. On the shelves, Kakira sugar and Lugazi sugar are scarce compared to Kinyara sugar, which is in plenty. Many dealers have now started hoarding sugar in order to benefit from anticipated price hike in the short term” (URN, 2017).

In May 2017 – Stanbic Statement:

“The only category to buck that trend was wholesale & retail, where staff costs rose and employment fell. Average purchasing costs also rose in April, reflecting increased prices for animal feed, food stuffs, raw materials and sugar. Higher cost burdens were passed on to clients, leading to a further increase in output charges” (Stanbic Bank, 2017).

President Museveni praises Kakira Millers:

“I would like to thank the Madhvani Group, despite the disappointment by Idi Amin. The family pioneered the production of sugar in Uganda. By 1972 they were producing 70,000 tons but today they have almost tripled the production to 180,000 tons,” he said. The President was today commissioning a state of the art ethanol distillery at Kakira Sugar Limited in Jinja district. The US$36 million facility, which is the largest in the East African Region, will be producing 20 million litres of ethanol annually” (…) “President Museveni pledged to address the issues to regulate the sugar industry but urged the Madhvanis to partner with farmers with large chunks of land for production of sugar-cane, as the cane is not a high value crop. He said people with small land holdings should be left to do intensive farming like the growing of fruits that give high returns. Turning to the issue of prices payable to sugar-cane out-growers, President Museveni advised the buyers and out-growers to sit together and agree on the prices taking into consideration the market prices globally” (Uganda Media Centre, 2017).

Government statement on the 11^th May:

“Speaking to 256BN on condition of anonymity a government official monitoring the situation said the manufacturers have not increased the factory price, but he conceded that the situation is worrying. “At the factory prices are stable. Why is it that the prices at the retail gate are high. This means that there are some distributors who are using the hiding strategy in order to rob Ugandans. As Government we shall continue monitoring the situation until we come up with the solution” the official said. Affordability of sugar is considered a key barometer of an ordinary person’s well-being and its pricing can take on political dimensions when people cannot have sugar with their tea” (256BusinessNews, 2017).

Putting the price in pespective:

Kakensa Media reported this today: “Today sugar costs 7000/- per kilo. When Museveni came to power in 1986 each kilo was at 4/-(four shillings). Immediately he came to power he said Ugandan shilling had lost value, in 1987 all money was changed, not only changed but two zeros were cut off to give it value on addition to the 30% levied on each shilling. This means on every 100 shillings, you got 70cents. Those who had 100,000/- got 700/-” (Kakensa Media, 12.05.2017).

This is all proof of a systemic malpractice, where both export, together with lacking yields because of drought and also the production of ethanol and bio-fuel. All of this collected together are reasons for the rising prices of sugar. The sugar price goes up because the use of cane for other things than millers producers sugar for consumption, but for other export products. This is all making sure even as the Republic of Uganda has in the past produces to much, it now doesn’t. Since it elaborately uses the sugarcane for other products.

That has made the Madhvani Group rich and their exports of sugarcane products are clearly selling. Now even their basic milled sugar are sold more expensive on the Ugandan market. There are also proven problems by other millers, who either has to much cane like Kinyara Sugar Factor in Masindi. Which is ironical problem, as the Kakira and Lugazi sugar is empty on the shelves, while the sugarcane hoarding Kinyara are still in the shops. But Kakira which is produced by Madhvani Group, we can now understand, since they have bigger operation and is blessed by the President for their industrial production of ethanol and bio-fuel.

Therefore, the are more reasons than just shopkeepers not getting enough stocks. That the rising prices are not only that there is lacking production. It is the system of export and production. Where the cane isn’t only becoming milled sugar for consumption, but for all the expensive industrial exports like bio-fuel and ethanol. This is all good business, but also bad for consumers and citizens who are accustom with decent prices for their sugar. That is not the fact anymore, as the business and millers has found new profitable ways. So that the surplus sugarcane and also the other gains massive profits. This is all good business for the owners of the sugar-millers and sugar industry. The one who feels the pitch is the consumer and the citizens. Who see scarcity of sugar inside the shops and also the inflation of prices on the sugar. Peace.

Reference:

256BusinessNews – ‘Government to issue statement on sugar’ (11.05.2017) link:http://256businessnews.com/government-to-issue-statement-on-sugar/

Gucwaki, Yosam – ‘MASINDI RDC IN TROUBLE OVER STOPPING SUGAR CANE BUYERS’ (28.04.2017) link: http://mknewslink.com/2017/04/28/masindi-rdc-trouble-stopping-sugar-cane-buyers/

Stanbic Bank Uganda – ‘Ugandan economic growth continues at start of second quarter’ (04.05.2017) link: https://www.markiteconomics.com/Survey/PressRelease.mvc/143ca2b8e3d84c79b96aed4885b7337e

URN – ‘Sugar manufacturer’s association explains price hikes’ (14.04.2017) link: https://dispatch.ug/2017/04/14/sugar-manufacturers-association-explains-price-hikes/

URN – ‘Uganda: Sugar Crisis On for Another 2 Years – Manufacturers’ (09.05.2017) link: http://allafrica.com/stories/201705100129.html

Uganda Media Centre – ‘President Praises Madhvani Group’ (05.05.2017) link: https://mediacentre.go.ug/news/president-praises-madhvani-group

A look into the Coke’s BioPET-PlantBottle™ 1.0 – Is it really Green or is it Greenwashing?

We live in a time where big multinational companies who do what they can do their business. Buy for one, sell for two. That is capitalism and the dream of getting wealth and generating it. We live in a day and age where multinational companies have vast powers and can use it whatever way they like. They can if wanting to make as much of wealth to circus of companies and hide the earnings in a tax-haven in the Caribbean or in Lichtenstein. But this article or blog will be about that. It’s about another possibility that they can do.

Milking a special type of cow:

Something that isn’t right. Companies can if they feel tell stories and express themselves as they please. Until a certain extent they can if they want to make them look extra good, but if so they shouldn’t play in-between reality and fiction. Especially not portraying stories about their products – they can make their milk being squeezed out a most beautiful cow ever. Even if wasn’t most purebred highland cattle from the western islands of Scotland. Instead it’s made with some lame ass country cow. If a Milk producing company said their entire product was made from Highland Cattle, we as consumer expect the product to be that, right? So if the pieces of production and process is made with fractions of other milking cow it want be pure Highland. It will be milk, but not as promised. Some people would be devastated. Some people would call it fraud. And partly it is, even if pieces of it made with the milk. This piece here will be about similar way of acting one way, and acting another. While telling the public something else. This here is a kind of way to make something greener then it really is. It isn’t really green, but said so. In a way that mislead the public. Some people calls that way of acting for Greenwashing. It’s a nice way to express them in similar incidence. First certain words will be translated like PEF, PET, PTA and LRB. So that people will know what they are. After that I will show what a certain company called the Coca-Cola Company makes which a famous Bottle the famous PlantBottle™.

Words to know:

• polyethylene furanoate (PEF)
• polyethylene terephthalate (PET)
• purified terephthalic acid (PTA).
• liquid refreshment beverages (LRB)

Bio-Plastic information:

The first information is that it’s renewable made from Sugercane-polyethylene which has the ability to replace 30% of the petroleum that would have been used for making certain type of plastic. The other good piece of using bio-plastic will be lower-carbon footprint (Sugercane.org).

Hitachi company explains what PTA is: “Purified terephthalic acid (PTA) is made by causing a reaction between the secondary petroleum product paraxylene (PX) and acetic acid”. When Hitachi describes PET its like this: “Polyethylene terephthalate(PET) is a general-purpose plastic made through polycondensation of PTA with ethylene glycol (EG). This material has many outstanding properties: resistance to both heat and cold, transparency, electrical qualities, chemical proof and abrasion proof” (Hitachi).

How Coca-Cola endeavors to make the PlantBottle™:

Here is how it has gone from 2011, when Gevo made an agreement with the Coca-Cola Company to make the second generation plant-bottle with Isobutanol.  Further commenting on the important factor between Coca-Cola and GEVO: “The global market for PET is approximately 50 million metric tons and has a value of $100 billion, with approximately 30 percent used for plastic bottles. In this next generation of PlantBottle™ packaging, Coca-Cola plans to produce plastic beverage bottles made entirely from renewable raw materials” (Gevo, 2011).

In the same year (2011) Coca-Cola Company made already a deal with Virent: “signing multi-year, multi-million dollar Joint Development and Supply Agreements to scale-up Virent’s plant-based Paraxylene (PX), trademarked BioFormPX, as a route to commercially viable, 100% renewable, 100% recyclable PlantBottle PET resin. In the past, Coca Cola’s PlantBottles have included only 30% plant-based plastic. Virent’s chemical allows the remaining 70% of the bottle to be plant-based” (…) “Virent is one of three companies working with Coca-Cola on PlantBottle technology. The others are Colorado-based Gevo and Avantium, which is based in the Netherlands” (Lane, 2014).

In South Africa in Wadeville outside of Johannesburg, South Africa there is coming a new bottle-plant. This is Africa’s first: “Coca-Cola approved technology for carbonated soft drink bottles thus enabling the closure of the loop in the biggest sector in the beverage market. The 3000m² Phoenix PET plant, equipped with Starlinger technology, will supply an additional 14 000 tonnes of PET resin per year to the PET packaging industry. It will eventually divert an additional 22 000 tonnes of post-consumer PET bottles from landfills each year, reducing resource consumption, creating jobs and assisting industry in meeting its target of a 50% recycling rate for 2015” (Parkes, 2015).

Later JBF Industries and Coca-Cola went into a partnership in 2012 to produce bio-glycol that will be used in the new plant-bottle. This will end up with a deal and an agreement that will do this: “Construction on the new facility is expected to begin at the end of this year and will last 24 months. At full capacity, it is estimated the facility will produce 500,000 metric tons of material per year. By using plant-based materials instead of nonrenewable materials, the facility will remove the equivalent of 690,000 metric tons of carbon dioxide, or the equivalent of consuming more than 1.5 million barrels of oil each year” (Mohan, 2012).

The Dreams of Coca-Cola Company and their PlantBottle™ 2.0:

A spokesman for Coke Scott Vitters commented in 2014 this: “Coca-Cola introduced the world to PlantBottle in 2009. The technology uses natural sugars found in plants to make ingredients identical to the fossil based ones traditionally used in polyester fiber and resins. PlantBottle packaging looks, functions and importantly recycles just like traditional polyester (or PET) plastic, but with a lower dependence on fossil fuels and a lighter environmental footprint on the planet” (…) “Today our first generation PlantBottle technology replaces one of the two ingredients that make PET plastic. Our long-term target is to realize a 100% renewable, fully recyclable plastic bottle. To realize this goal, Coca-Cola is investing millions in local technology companies – companies like Virent in Madison, Wisconsin; Gevo in Englewood, Colorado and Avantium in Amsterdam, the Netherlands” (Vitters, 2014).

“Continuing in rigid high-barrier packaging, polyethylene furanoate (PEF) bottle development remains on track. Avantium has entered into an agreement with ALPLA for development of PEF bottles, with the first bottles targeted to reach market by 2016. Avantium has also partnered with Coca-Cola and Danone in the development of PEF bottles”. (…) ”PEF is a next-generation, bio-based, recyclable polyester developed by Avantium on the basis of furanics technology. According to Avantium, PEF has 50-60 percent lower carbon footprint compared to petroleum-based PET” (Rosato, 2014).

Right now the Coca-Cola Company together with other industry packaging companies as Virent, Gevo and Avantium has made this possible: “The PlantBottle 2.0 represents an upgrade to the existing bio-based PlantBottle the beverage company already uses for some of its drinks. This substitute for polyethylene terephthalate (PET) bottles has a 30% bio-based content, principally derived from Brazilian sugar cane supplied by Braskem”. In the future the same companies hope for “The 100% bioplastic bottle is the result of collaboration between Coca-Cola, Geno and Virent to perfect bio-purified terephthalic acid (PTA). Commercial rollout of PlantBottle 2.0 will take place over the next five years, culminating in a full replacement in 2020” (SustPack).

Ringier Plastics commented this: “From traditional PET to recyclable (also known as R-PET) to bio-based PET, technology and environmental properties have come a long way. PET generally consists of 70% terephthalic acid and 30% monoethylene glycol (MEG). But now it is quite possible to produce bio-based MEG from renewable raw materials instead of fossils. Coca-Cola is a pioneer is adopting bio-PET packaging with its PlantBottle™, producing the first ever fully-recyclable PET plastic beverage bottle using 30% of non-fossil material and resulting in less carbon footprint. Coca-Cola aims to convert all its plastic packaging to PlantBottle by 2020 and entered into a partnership with H.J. Heinz Co. to produce ketchup bottles using PlantBottle material” (Ringier Plastics, 2015).

The Marketing Companies making PlantBottle™ what it is:

“Fahrenheit 212 worked with Coca-Cola’s global packaging team to translate a complex and contentious advance in polymer production into a clear and compelling consumer proposition.  The PlantBottle brand name evolved from the concept development and strategic positioning work undertaken by Fahrenheit 212 and the PlantBottle icon, which has been now been featured on over 10 billion packages since its launch in 2010, was conceived and created by our in-house design team” (…) “In its first year, PlantBottle was launched in nine global markets, including Brazil, Canada, Chile, Denmark, Japan, Mexico, Norway, Sweden and the United States across brands such as Coca-Cola, Sprite, Dasani and vitaminwater”  (Fahrenheit 212). The other marketing plan of Coca-Cola company was merged with another agency they did this: “Ogilvy & Mather’s campaign uses Coca-Cola’s iconic red and white color scheme and optical illusions to create intriguing images for the new bottle. The print ads all emphasize a way that plants make us happy, followed by the message that Coca-Cola’s PlantBottle is “Up to 30% made from plants” and “100% recyclable.”“ (Oster, 2014). One of Ogilvy & Mather’s ads just below.

It all sound beautiful doesn’t it. Mixing PEF and PET like its nothing? Plastic turned fantastic from petroleum based sort of bottle into plant heaven, right? Is there a reason why it just sounds so magnificent! If so, why does it for the last five years show up a dirty dozens of similar quotes from Scott Vitters in all kind of outlets from the Guardian to the New Zealand Scumbag post? That makes a brother like me curious. Especially when they been cooking this for so long.

Well, there isn’t everybody who has a piece of pay from Coca-Cola Company. This reports I come with now haven’t a clear connection or are in business with the Company. They are separated from it and are on their own. So you should see what their saying and be fascinated.

There many ways of telling how it really is: “Coke invented the Plant Bottle.  The Plant Bottle is made from sugarcane, a food source.  The Plant Bottle is a PET plastic bottle.  The Plant bottle is 100% PET, 70% made from oil and 30% from sugarcane.  The Plant Bottle is not biodegradable and lasts as long as the petroleum-based PET however a large segment of the population believes that the Plant Bottle is, in fact, biodegradable” (…) “Coke has invested heavily in rPET bottle-to-bottle recycling.  Coke is a large buyer of rPET pellets in China and reputedly is putting rPET in small” (…) “The largest producer of rPET pellets in China is tripling its capacity in 2011” (…) “Krones, one of the world’s largest developers and supplies of machinery to the bottling industry is introducing a series of super efficient PET washing and flaking recycling equipment.  rPET flakes and pellets can be manufactured at prices less than virgin PET” (N.Michaels).

Another example of renewable resources usage are PET bottles – called Plant Bottle. Those bottles are composed of PET, produced from terephthalic acid (70 % of mass) and ethylene glycol (30 % of mass). Terephthalic acid comes from oil, whereas glycol is produced from ethanol (deriving from fermentation of vegetable feedstock). Such bottles can be easily recycled, and they can be collected with other (classical) PET bottles. This partially bio-based PET saves global fossil resources and also reduces CO2 emissions. Plant Bottle is 20 % biobased (20 % of the carbon present in the material comes from renewable resources) and 30 % bio-massed (30 % of the mass of the material comes from renewable resources) and a simple scheme on figure 12 shows how the Plant Bottle is made (Plastice).

Gendell said in 2012 this about the PlantBottle: “The first complexity is that only a portion is plant-based, so the PET is also composed of some things that ought to stay within a technological closed loop” (…) “The other complexity is that there must be a mechanism by which the plant-based material may return to nature and participate in the biological cycle. Even if the first complexity were resolved by making PET entirely from plant-based materials (which is not truly possible today, considering all the catalysts and polymer chemistry whatsits that are not made from plants), the PET would still be an inherently non-biodegradable material” (Gendell, 2012).

In Denmark a Henrik Saugmandsgaard Øe is a Danish Consumer Ombudsman says this: “criticized Coke’s use of several marketing ploys, including the use of the word “plant,” excessive green colors and a circular-arrow logo inspired by the familiar symbol for recyclability. The ombudsman also noted a lack of documentation to support Coke’s claim that PlantBottle is “environmentally friendly” or has a “reduced carbon footprint.”” (…) “the bottle contains only a maximum of 15 percent plant material — a percentage he said hardly justifies the designation “PlantBottle.”” (…) “The Consumer Ombudsman requested the trader to indicate the minimum percentage of plant material in the bottle or to explain more clearly why the plant material proportion of the bottle was specified as ‘up to 15 percent” (Zara, 2013).

The issue with getting a 100% Bio-PET bottle is a big issue for Coca-Cola Company. Ordinary PET or 30% Bio-PET bottle has Petroleum-based component considering the bio-based in PEF. The Plastic Packaging Expert Gordon Bockner: “PEF molecule is a contaminant in the existing PET stream. A very small amount of PEF will (a) reduce the performance characteristic of the resulting PET/PEF blend and (b) neither will the blend be crystal clear and glossy, which are two of the key (marketing) attributes OPET. It is, therefore, not realistic to suggest that the two resins might be successfully blended to make a commodity LRB packaging resin” (Pierce, 2014).

Liz Baird the Environmental Consultant has said this about the PlantBottle:”When a company uses their marketing to appeal to the eco-conscious consumer, but they are spending more money marketing than they spend on being green, it’s called greenwashing” (…) “For example, there are some companies who tout their products as green, but if you look at the list of ingredients, palm oil is one of them. Harvesting palm oil is extremely dangerous to the orangutans” (EcoDaily, 2015).

After thought:

This here story here is about the 30% Bio Sugarcane based PET Resin and the rest of the bottle 70%. Not the newly released bottle that is supposable 100% BioBased Plant bottle. It hasn’t been addressed yet because I don’t see how it’s made possible and there aren’t reports or scientific how the whole PET resin is made. Therefore I won’t address it today. This here is just a full case on how Coca-Cola Company has described the infamous Plantbottle™. So since this original Plantbottle™ 1.0 is 30%. And call all natural you get the feel of a greenwash perception scheme. That isn’t fair for the consumer or society. It even got a Danish Ombudsman on the tail, but the same scenario and drop hasn’t made a fuzz where else it has been released, this is something about the leniency towards the Coca-Cola Company in these countries that has this specific bottle. That you have many companies on all sides of the globe focusing on how to make a Sugarcane bottle instead of a petroleum-based one, the first step was using 30% of the Bio PET resin. If they will fix it and make it, also make sure that it can contain the material that it’s talking about. It can’t be either or. Has to been made for a certain type of PET-Resin to make it hard enough to be a bottle for production-line and to contain the sugar-caffeine-carbonated-liquid called Coke from Coca-Cola Company.

Wonder how it will be 100% compared to the 1.0 type of bottle. That will be another story. Would be another story to see how the produce and production of Plantbottle 2.0 who supposed to be 100% made of sugarcane. And I might go into detail about that if I get the hold of that information. I can’t write it out of the thin air. Got to taste the carbonated sugar-water and then get the feel of the flavors and ways. Peace.

Reference:

EcoDaily – ‘It’s Not Easy Being Green – Labeling Can Be A Guise’ (01.07.2015) Link: http://ecodaily.org/its-not-easy-being-green-labeling-can-be-a-guise/

Parkes, Lisa – ‘Africa’s first Bottle-2-Bottle Plastic Recycling Plant Opens its Doors in Wadeville’ (13.05.2015) Link: http://www.petco.co.za/ag3nt/system/about_petco_dynamic_blog.php

Oster, Erik – ‘Ogilvy & Mather NY Introduces PlantBottle for Coca-Cola’ (09.06.2015) Link: http://www.adweek.com/agencyspy/ogilvy-mather-ny-launches-plants-make-us-happy-for-coca-cola/67789

Mohan, Anne Marie – ‘Coca-Cola enters partnership to expand PlantBottle production’ (27.09.2012) Link: http://www.greenerpackage.com/bioplastics/coca-cola_enters_partnership_expand_plantbottle_production

Fahrenheit 212 – ‘Coca-Cola PlantBottle – Defining the Consumer Proposition for Bio-PET’ Link: http://www.fahrenheit-212.com/coca-cola-plantbottle/

Rosato, Don – ‘Green plastic barrier packaging material and process advances’ (28.07.2014) Link: http://exclusive.multibriefs.com/content/green-plastic-barrier-packaging-material-and-process-advances/food-beverage

Pierce, Lisa McTigue – ‘PEF will not oust PET for beverage bottles anytime soon’ (25.07.2014) Link: http://www.packagingdigest.com/resins/pef-will-not-oust-pet-for-beverage-bottles-anytime-soon140724

N.Michaels: ‘Why and When will Bottle-to-Bottle rPET Technology Dominate?’ (03.12.2010) Link: http://theplanetbottle.net/news/2010/12/why-and-when-will-bottle-to-bottle-rpet-technology-dominate/#sthash.QksuvCPg.dpuf

Lane, Isabel – ‘Coke invests further in scaling Virent’s paraxylene production for PlantBottle’ (09.09.2014) link: http://www.biofuelsdigest.com/bdigest/2014/09/09/coke-invests-further-in-scaling-virents-paraxylene-production-for-plantbottle/

Gendell, Adam – ‘The catch behind Coca-Cola’s switch to plant-based bottles’ (10.10.2012) Link: http://www.greenbiz.com/news/2012/10/10/catch-behind-coca-colas-switch-plant-based-bottles

Ringier Plastics – ‘Bio-based PET shows the way forward’ (07.05.2015) Link: http://www.industrysourcing.com/article/bio-based-pet-shows-way-forward

Vitters, Scott – ‘Statement of Scott Vitters General Manager, PlantBottle Innovation Platform The Coca-Cola Company United States Senate Committee on Agriculture Nutrition and Forestry United States Senate June 17, 2014’

PTA – ‘Production process for purified terephthalic acid (PTA)’ Link: http://www.hitachi.com/businesses/infrastructure/product_site/ip/process/pta.html

PET – ‘Production process for polyethylene terephthalate (PET)’ Link: http://www.hitachi.com/businesses/infrastructure/product_site/ip/process/pet.html

Sugarcane.org – ‘Bioplastics’ Link: http://sugarcane.org/sugarcane-products/bioplastics

SustPack – ‘Coca-Cola Gives Expo Debut To 100% Bio-Based PlantBottle’ Link: http://www.sustainability-in-packaging.com/news/coca-cola-gives-expo-debut-to-100-bio-based-plantb

Gevo – ‘Bio-based Isobutanol to Enable Coca-Cola to Develop Second Generation PlantBottle™ Packaging’ link: http://www.gevo.com/?casestudy=bio-based-isobutanol-to-enable-coca-cola-to-develop-second-generation-plantbottle-packaging

Zara, Christopher – ‘Coca-Cola Company (KO) Busted For ‘Greenwashing’: PlantBottle Marketing Exaggerated Environmental Benefits, Says Consumer Report’ (03.09.2013) Link: http://www.ibtimes.com/coca-cola-company-ko-busted-greenwashing-plantbottle-marketing-exaggerated-environmental-benefits

Patent – ‘Method of making a bottle made of fdca and diol monomers and apparatus for implementing such method’ (31.08.2012): http://www.google.com/patents/WO2014032731A1?cl=en

Plastice – ‘Bioplastics – Opportunity for the Future’ (2013) Link: http://www.central2013.eu/fileadmin/user_upload/Downloads/outputlib/Plastice_Bioplastics_Opportunity_for_the_Future_web.pdf