Bali’s plastic ban: another win for bioplastics
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
Seeking idyllic white sand beaches, Bali’s five million annual visitors have found the reality to be far from picturesque. Choked with plastic waste, Bali’s beaches can be outright repulsive.
The situation is so dire that Indonesian officials declared a “garbage emergency” in response to a six-kilometre stretch of coast along the island being swamped by waste.
But the environmental disaster isn’t hopeless. After five years of relentless campaigning, teenage sisters Melati and Isabel Wijsen, have found success.
The pair’s Bye Bye Plastic Bags initiative, which saw them speak at United Nations conferences, with international government leaders, and on TED Talks, as well as being recognised by CNN, Al Jazeera, and on Forbes’ Top 10 Most Inspiring Women list, has finally succeeded in banning plastic from the Indonesian island.
From 1 January 2019, Bali’s Governor, Wayan Koster, has banned single-use plastics, including styrofoam, plastic bags and plastic straws — a dream the Wijsen sisters have been working towards since they were just 11 and 12 years old.
This is certainly a win for Bali and its tourism industry, along with the island’s ecosystem.
It's not just Bali that’s addressing the plastic problem. As part of the UN's Clean Seas program, the Indonesian government has pledged to invest $1 billion in reducing marine waste by 70% by 2025. This is significant as Indonesia’s plastic waste accounts for 10% of global marine plastic pollution, making it the second largest plastic polluter in the world after China.
Moves like these have seen the rise of cleantech stocks. Yet it’s not just the environmental benefits that’s attracting investors. While local and global stock markets have suffered in recent months, the Australian CleanTech Index outperformed the ASX200 for the second quarter of FY19. And longer term, the Australian CleanTech Index came out nearly 30% ahead of the ASX200 over three years, and more than 50% ahead after five years.
One company that ticks the boxes for socially responsible investors is sustainable and eco-friendly bioplastics developer, SECOS Group (ASX:SES).
The group is at the forefront in bringing bioplastic compostable films and resins into the mainstream to replace the widespread use of traditional petroleum based plastics.
The Melbourne-based company is a leading global producer of eco-friendly bioplastic materials from its proprietary bio-based resin technology. It’s developing a world-first breathable compostable film product line that provides future opportunity to meet a presently unmet need.
SECOS began operations at a greenfield Malaysian bioplastic resin manufacturing plant in July last year and is ramping up production of the higher-margin biodegradable, compostable and hybrid resins that can be used to make sustainable hygiene and other packaging materials.
It has a new 30,000sq ft. facility, located close to Malaysia’s largest port, which will provide the company with additional capacity and sales to meet the growing global demand for bioplastics and further expand in the key markets of Malaysia, China and the US, where it already has strong foundations.
SECOS also manufactures traditional plastic films for use in nappies and other hygiene products through its Stellar Films division. However, the focus going forward is squarely on the higher-margin bioplastics division, particularly compostable resins.
With that in mind, the company this week provided an update on its decision to cease its Australian film manufacturing operations, as announced in November.
SECOS is reducing its exposure to underperforming traditional plastic assets, and has been looking to sell its Australian subsidiary, Stellar Films Group Pty Ltd (SFA), and its assets.
The move is in line with management’s decision to shift focus to higher-margin bioplastic assets. This decision was supported by an independent strategic review last year by Promentor.
However, with no buyer identified at this stage, the Board of SECOS have decided it is in the best interests of shareholders to wind up the SFA business and have appointed Jason G. Stone and Petr Vrsecky of PKF Melbourne as liquidators. SECOS expects that one-off cash charges in respect of the winding up of SFA will not exceed $0.9 million in FY19.
The company’s Malaysian film manufacturing subsidiary will offer Australian film customers ongoing support as required to ensure continuity of supply. The company expects some loss of Australian film customers; however, the overall net result for SECOS will be positive due to the significant reduction in fixed costs and cash outflows associated with its Australian film manufacturing operations.
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.