“What we need to do now is to find ways to increase consumer jobs and incomes, so that we can bring long-term growth in consumption.”

With the steady progress of China's “dual carbon” strategy, the "Implementation Plan for Carbon Peaking in the Non-ferrous Metals Industry" puts forward the goal of 24% of the supply of recycled metals and 11.5 million tons of recycled aluminum output by 2025, and the green transformation of the aluminum industry has begun “Fast Lane”. One of the most important aspects of work is how cans are recycled and reused.

In response to the issue of promoting sustainable development in the metal packaging industry, a few days ago, the 21st Century Business Herald reporter interviewed Zhou Yunjie, chairman of ORG Technology Co., Ltd. (002701.SZ), one of the leading domestic metal packaging companies.

Relying on the production capacity, technology and service advantages formed in the fields of metal canning and filling, ORG has laid out more than 30 production bases in 16 provinces across the country to serve many domestic first-line FMCG brands, which also gives it a sharper sense of the consumer market.

In 2023, China's commodity consumption is undergoing a gradual recovery process, as the helmsman of many upstream production enterprises in the food and beverage consumer goods industry chain, Zhou Yunjie believes that it takes a process for consumers to restore confidence, and this process needs to be repaired by the economic cycle.

Picture: Zhou Yunjie, Chairman of ORG Technology Co., Ltd

How sustainable recycling practices are

21st Century: What are the challenges of can recycling?

Zhou Yunjie: I think the core of the challenge is “how to promote the formation of a virtuous circle within the industry through successful commercialization practices and form sustainable development competitiveness”: First, let the enterprises and institutions in the industrial chain that are willing to invest “make money”. Second, all parties in the industrial chain should empower each other, so that consumers and users can finally perceive the value of “green development” in the industry, and guide everyone to participate in green consumption around green brands. Third, the industry should jointly promote the construction of green standards and industrial norms, rely on new standards to build new consensus, and form a prominent voice and development force for green development.

21st century: What is the difference between ORG's practice in canning recycling and some elderly people in the community picking up cans from trash cans and selling waste products?

Zhou Yunjie: The recycling rate of cans in China is not low, and the thrifty and industrious nature of the Chinese allows many people to actively participate in this recycling process, the main problem is that the centralized processing capacity after recycling is too low.

On the one hand, whether these recycled cans can enter the deep processing industry of aluminum, and the second problem is that there are many differences in canned products (aluminum products), recycling needs to do a preliminary classification, if there are too many impurities, the utilization rate is not high.

Sustainability in our industry includes recycling and recycling. In addition to recycling our cans, we also need to convert the recycled products into valuable ones.

Recycling cans is not a simple thing, we have explored for many years, for example, the automatic recycling machine we made, in addition to completing part of the recycling function, another important function is to disseminate, the concept of recycling and the concept of green environmental protection, spread to consumers, so that everyone can pay attention to the recycling of products.

21st Century: Does ORG's Can Recycling Project Take into Account Economic Benefits?

Zhou Yunjie: The partner company we invested in had already achieved preliminary annual profitability at the end of 2022. The practice of Youban Company is a test field for us, and the area of business operation is still relatively concentrated, the scale is relatively small, and it has not yet achieved large-scale popularization and roll-out.

Although the business of Youban is not profitable, it allows us to see the direction and dawn of sustainable development. Youban also plans to start an online system next year, so that more people can participate in the entire industrial chain of recycling and regeneration through online.

Private label and sports industry layout

21st Century: Recently, “Xiwang Sports Nutrition Drink” is becoming popular in the sports market, what proportion of ORG's own brand products account for the whole business, and how is the business progressing?

Zhou Yunjie: Private label part, we start with2004began to do. At that time, we made these products in order to better promote our packaging products. Many of the new packaging products we have developed have to be used by ourselves. In recent years, there is more reason for the launch of its own brand products, which is also because the overall R&D capacity of ORG has gradually increased in recent years.

Second, by making these private label products, customers can intuitively feel our packaging services, which is also a good way to sell.

Third, we are also willing to make these private brands become competitive products in the market through our own efforts.

21st Century: From the perspective of financial data, is the private label product business more profitable than the metal packaging business?

Zhou Yunjie: Yes, but at present, the company does not mean that it must go all out to develop its own brand. As a company that provides integrated packaging services, the development of its own brand is a part of the packaging service, rather than encroaching on our main business, which is the core.

At present, these private brands have achieved good commercial transformation, and have formed a positive cycle and interaction with the FMCG industry ecology. For example, our own prefabricated food brand, the ORG bowl packaging used is behind ORG's coated iron technology with independent intellectual property rights. After this product was applied to the field of prefabricated dishes, it quickly attracted the attention of many well-known FMCG brands, and was soon applied to the packaging business of some high-end products, such as bird's nest and Buddha jumping over the wall.

Therefore, the current production volume of its own brand is not high, but the economic benefits and value brought to the company are actually not less than a large factory.

21st century: ORG also has many layouts in the sports sector. What is the layout consideration for ORG in the sports sector?

Zhou Yunjie: For us, the sports sector serves the main business of ORG. A large number of our clients’ products are used to grow their brand value through cultural and sports platforms.

Everyone is familiar with Coca-Cola, Red Bull, War Horse, and some renowned beer brands, everyone can pay attention to the deep link between brands and sports. As a strategic partner serving these brands, we are of course willing to serve our customers by cultivating the sports industry chain, so as to increase the cohesive relationship between us and our customers.

Through the deployment of the sports industry, it has not only brought economic benefits to the company, but also brought industrial benefits to customers, so it cannot be said that the sports sector is simply regarded as a subsidiary to see whether it makes money or not. Of course, the future development goal of our sports sector is to make money.

At present, the sports industry has undergone profound changes, especially the original concept of commercial sports and the current concept of sports industry are very different. In the past, the sports industry was to improve the business value chain through independent operation, but now the sports industry is broader, and the industrial chain is integrated into many aspects of social consumption activities.

Taking the marathon as an example, in the past, it was mainly for professional athletes, but now the public participates in the marathon, which is a consumption process covering multiple links, and the consumer's capital investment has created a huge consumer market, such as health supplements, functional drinks, etc., and this market has become larger.

Expanding employment and increasing incomes are the key to the recovery of consumption

21st century: In 2023, China’s consumer market is being repaired, as a manufacturing enterprise in the upstream of the consumer goods industry chain, what is the situation in the first three quarters of this year, and as a private entrepreneur, how do you view the current recovery of consumer confidence?

Zhou Yunjie: From the perspective of financial data alone, ORG has completed its sales target in the first three quarters, with a total revenue of 10.7 billion yuan, and its operating situation this year is relatively stable. However, from the operation, my intuitive feeling is also in line with some characteristics of the current economic cycle, due to the lack of consumer confidence brought about by the epidemic, and this confidence needs to be gradually restored.

In the past few years, some enterprises have been under great pressure on production and operation, which has brought some confusion about “how to go in the future” to the FMCG industry chain. The problem reflected is that it will take a while for some practitioners in the industry to re-enter the industry and consumers to restore confidence. This process is repaired by the economic cycle, and the repair process is not completed until everyone has stable employment and income.

I can feel that the repair is getting better gradually, but it will take time for the repair to be completed. For example, the rapid growth of some (service industry) data this year is a retaliatory rebound, which represents the characteristics of the stage. What we need to do now is to find ways to increase consumer jobs and incomes, so that it can lead to long-term growth in consumption.

21st century: After the adjustment of market growth rate, will there be greater pressure on performance growth for enterprises, and what are your expectations and suggestions?

Zhou Yunjie: There is pressure all the time, when there is high growth, there is also pressure on enterprises, and when there is low growth, it cannot be said that enterprises cannot survive. No matter what state it is, enterprises must be brave to face this reality, and then do what you should do, solve the problems that should be solved, there is no enterprise that cannot survive, only enterprises that are unwilling to do.

From a business perspective, I hope that the entire consumer industry chain can be repaired faster, and then practitioners can have more job opportunities and income growth. As an enterprise, we should also bravely acknowledge and accept the cyclical changes in the market, face and challenge these changes, and new development opportunities often arise within these changes.

Author: 21st Century Business Herald reporter Zhou Hui