The Chinese mainland market for green technology is growing as mainland authorities devote more resources to environmental challenges. But Hong Kong eco-entrepreneurs face numerous challenges if they want to clean up in the mainland.
To compete with mainland eco-companies, Hong Kong SMEs need a combination of in-demand technology, a well-connected mainland partner and good timing.
Hong Kong company Tiostone Environmental Ltd is both a driver and a beneficiary of a growing call to recycle glass bottles in Hong Kong and Macau.
Its eco-pavers use crushed recycled glass and construction waste as ingredients. Employing technology developed by the Hong Kong Polytechnic University, the paving stones are topped with a five-millimetre layer incorporating titanium dioxide (TiO2), which combines with UV rays and oxygen to accelerate the decomposition of the air pollutant nitrogen oxide.
One of Tiostone’s first challenges on start-up in 2005 was acquiring the waste glass needed to replace river sand in its eco-pavers. It began by persuading waste collectors around Tsim Sha Tsui’s bars to part with the empty bottles, which had no value. Later it secured used bottles from companies such as Coca-Cola. In 2008, the Hong Kong Hotels Association and the Environmental Protection Department began a bottle recycling programme for hotels. And two years ago, the Hong Kong Dumper Truck Drivers Association, with funding from the government’s Environment and Conservation Fund, launched the Green Glass initiative to collect bottles from entertainment areas such as Wan Chai and Soho. Green Glass currently provides Tiostone with about 25 per cent of its supply. Tiostone also gets bottles from Lamma Island and Discovery Bay, while the Macau government is now collecting, crushing and delivering glass to the company.
“We recycle between 3,000 and 4,000 tonnes of glass bottles every year,” says Tiostone Director Dixon Chan. “For the construction of every square metre of pavement, we can recycle 20 kilogrammes of glass and about 55 kilogrammes of construction waste.”
Tiostone set up a factory in Dongguan in 2009 to produce pavers on the mainland. “It’s very difficult to compete in the general market,” observes Mr Chan. “The market is huge in China, but they don’t require environmentally friendly construction materials at the moment. We focus more on the high-end market, for example, expensive private-estate projects.”
And through Hong Kong media coverage of its eco-paver technology, Tiostone caught the eye of an investor in the eastern Guangdong city of Chiuchow, who was trying to help the city dispose of the waste from its many factories churning out ceramic bathtubs and toilets. Tiostone helped set up a plant to recycle ceramics and provides operational assistance. It also lends its brand name to the factory’s products, including large blocks used for river-bank stabilisation, in return for a royalty.
“In general, eco-products like ours cannot really survive on the mainland because they don’t give a premium for eco-products,” he says. “And there’s no system to collect the waste.”
“I see the opportunity, but we all have to understand that connections are very important in China. So I think finding a solid partner in China is critical. Regardless of how good the product is, your partner is more important for the success of the company.” He adds that the partner needs to have a relationship with the local government, which sets environmental requirements. As in any country, when it comes to selling eco-products, “government policy is critical.”
Another Hong Kong clean-tech company, biodiesel producer Dynamic Progress International Ltd, caught the eye of several potential joint-venture partners on the mainland, after it won a HK$25 million Hong Kong Government contract last year to supply 3.5 million litres of biodiesel, a cleaner-burning fuel using recycled waste cooking oil that can power everything from vehicles to stoves.
The partnership hopes to build a state-of-the-art biodiesel plant producing low emissions and no water pollution. Dynamic Progress Managing Director Wing On Yau says that, although the mainland has many biodiesel producers, few meet the stringent European EN 14214 standard. “Because we are in compliance with that standard, our JV partners know that we have the technology to do it.” Not only is the right partner essential, he says, but so is the right technology.
“In China there are a lot of political, territorial and market considerations,” says Mr Yau. “Really, everything is monopolised by the two or three major oil companies in China. You might have no problem manufacturing, but if you want to sell it, then it becomes a consideration. We’d need to have all these channels established before we move.”
“The market in China is not really regulated in terms of compliance,” he says. “So the pitfall is, the government could change the law or make a very different policy. It’s not only in the biodiesel industry, it’s probably more or less the same when you run any business in China. And being an energy company, you have an added risk because energy is a very controlled industry in China.”
For both these companies, opportunity in the mainland resulted from success in Hong Kong.
Secretary for the Environment Wong Kam Sing says recent Hong Kong Government initiatives requiring improved energy efficiency in buildings “generate very good business opportunities for architects, engineers and environmental consultants. That knowledge could be applied not only in Hong Kong but also in the region, given the similar climate.”
Also presenting “a golden opportunity for big and small companies to showcase the application of new technology,” he says, are such demonstration projects as the Construction Industry Council’s Zero Carbon Building in Kowloon Bay. With a goal to make Hong Kong a role model for low-carbon cities, it features more than 80 green technology, including such local products as 100 per cent biofuel, Tiostone’s eco-pavers and a waste-water recycling system developed by Dunwell Enviro-Tech (Holdings) Ltd. “We look forward to seeing more of this kind of demonstration project in Hong Kong.”
“At the same time,” says Mr Wong, “we have the annual Eco Expo Asia [27-30 October]. It’s a local, regional and international event to attract suppliers and inventors to come to Hong Kong, with a focus for people to demonstrate the relevant designs and technology.”
He adds that the Cleaner Production Partnership Programme, launched in 2008, encourages the application of clean tech in the Pearl River Delta. “We are using public money to facilitate Hong Kong-owned factories across the border to apply cleaner production technology and practices. The benefits include technology transfer and application of green technology, while helping to clean up the air quality in the whole region.”
Source: Hong Kong Trader