TOKYO -- The Japanese parent of 7-Eleven and trading company Mitsui & Co. are joining with France's Veolia on a joint venture intended to keep plastic bottles thrown away in Japan from polluting Southeast Asia.
The project allows the recycling of what are considered low-quality bottles, those that contain impurities, which has been previously difficult.
Japan currently exports some of its plastic waste to Southeast Asia and other regions, where it gathers as environmental pollution. The partners' recycling business is aimed at curtailing this practice by collecting the waste in Japan and recycling it.
The three intend to invest 7 billion yen to 8 billion yen ($67 million to $76 million) in creating a large-scale integrated system that collects the discarded containers and recycles them. They expect to eventually sell recycling services to other companies.
The Japanese unit of Veolia, a water-treatment conglomerate, will hold 51% of the venture, Mitsui will own a 39% stake and Seven & i will hold 10%. The venture plans to open a dedicated plant in western Japan in 2022 that is to have a production capacity of 25,000 tons per year, equivalent to 3% to 4% of all plastic bottles sold domestically.
The venture will make Seven & i the first retail operator to launch a plastic bottle recycling business. The waste will be collected from the trash cans of about 22,000 Seven & i group stores that are close to the plant. The group will then use the recycled bottles for Seven brand beverages. In Japan, each convenience store on average collects 100 discarded plastic bottles a day. In a year, 700 million of these used bottles are binned.
Mitsui will procure additional raw materials and help sell recycled plastic bottles to beverage makers. Veolia will operate the plant.
The water treatment company has the technology to recycle bottles that haven't been washed out and still have labels attached. Its ability to process these "low-quality" containers is expected to accelerate demand for recycled plastic.
Beginning next year, the amended Basel Convention, a treaty on the transboundary movement and disposal of hazardous and other waste, will require the consent of importing countries for uncleaned plastic trash. The regulation is expected to accelerate the reuse of plastic in Japan, where only 10% of plastic bottles are currently recycled.
Some estimates suggest that demand for recycled plastic bottles will surge to 480,000 tons in 2030, a sevenfold increase from 2018. But the lack of Japanese companies' recycling capacity has been considered a challenge.
As more international communities ramp up their own regulations to deal with plastic pollution, they are putting pressure on corporations around the world to adopt environmental, social and governance, or ESG, policies.
Having felt this pressure, Seven & i has been expanding its plastic bottle collection network. With its latest move, it is getting into the reprocessing of plastic bottles.
Other companies are moving in similar directions. Electronics retailer Yamada Holdings is investing more than 10 billion yen to establish an incineration power generation facility that will burn plastic and other waste. Uniqlo operator Fast Retailing is also stepping up in the ESG field.
As more institutional investors and consumers prioritize corporations' social responsibility, it is becoming difficult to expand without moving in the same direction.
