Green in the city

Environmental services firm Baguio strives to entice more recycling tonnes out of Hong Kong’s residents and office workers.

Keeping things clean is the founding purpose of Hong Kong-based Baguio Green Group, which was founded in 1980 as a building and property cleaning service.

Over the course of its 35 years the company has expanded the scope of cleaning and hygiene-related services it offers to its customers, adding waste management and recycling services in 2008.

In 2014, the company stepped up its presence in Hong Kong’s recycling sector by winning the bid to collect recyclable paper, plastic and metal from the Hong Kong Special Administrative Region (SAR) public space bins, found on sidewalks and other public areas throughout the city and SAR.

Baguio also has invested in a sorting and baling facility to upgrade the collected materials and prepare them for downstream consuming markets.
 

Growing new branches

Founded as a family business by members of the Ng family in 1980, Baguio initially offered cleaning services to property owners and managers, a sector in which it remains a market leader in Hong Kong.

The company’s cleaning crews provide services to some of Hong Kong’s largest office buildings, retail centers and residential complexes. Driven in large part by customer satisfaction and requests, according to Baguio Assistant Marketing Manager Kitson Ng, Baguio began adding more services to its portfolio, starting with landscaping in 1994.

In 2000 Baguio entered the pest control sector—another natural addition to its hygiene-related portfolio—and in 2008 began offering recycling and waste management services to its customer base.

In the custodial (cleaning), landscaping and pest control businesses, Baguio is in the top three in market share in Hong Kong in all three sectors, says Ng. The company is taking steps to gain market share in the waste collection and recycling sectors, he adds.

Baguio’s growth from a family start-up in 1980 can be measured in several ways, including with its initial public offering (IPO) on the Hong Kong Stock Exchange in 2014.

In the report summarizing its 2014 financial results—its first as a public company—Baguio says its revenue was slightly more than HK$1 billion ($132 million), representing a 25% increase over the HK$821 million ($106 million) it garnered in 2013.

Baguio’s scale also can be measured by its 9,000 employees and fleet of more than 400 vehicles, says Ng.

Its growing presence in the recycling sector may contribute to Baguio staying on a path to more growth, but according to Kitson Ng and his colleague Project Manager Edmond Ng, conducting recycling operations in Hong Kong also imposes inherent challenges.
 

Daily discards

The vast majority of Hong Kong’s 7.3 million people live in multitenant buildings, many of them high-rise buildings with 15 or more floors.

Starting with collection, space to allocate toward recycling is at a premium in Hong Kong, where some neighborhoods put as many residents into a square mile as anywhere else on Earth.

Whether Baguio is serving its office clients or the Hong Kong SAR government is trying to increase recyclable materials collected from its citizens, creative solutions can be required.

One of the SAR government’s efforts to collect newspapers and beverage containers from its on-the-go legions of pedestrians involves placing three-compartment recycling bins (paper, plastic and metal) onto sidewalks and in public places throughout Hong Kong.

Starting in August 2014, Baguio entered into a two-year contract to collect the material in these approximately 3,000 bins that dot Hong Kong from its Central and Tsim Sha Tsui business districts to the semi-rural areas in its northern New Territories region.

Edmond Ng says the material is collected by tying and removing the bags located inside the metal bins and placing them into a straight delivery truck. This method is not optimal, he admits, as the weight that can be collected in one trip is nowhere near what could be gathered in a compactor truck.

The bags are delivered to a less-than-two-acre site leased by Baguio in Fanling, one of the semi-rural areas in the New Territories. At the site, Edmond Ng supervised the installation of a small processing center that includes two sorting lines, a baler and a shredding system that serves Baguio’s confidential shredding customers.

Baguio makes the most of the small parcel. On a rainy fall morning, several trucks arrive to unload materials at a scale near the front gate. On one side of the property, workers break open the bags and empty materials onto a conveyor belt, where sorters conduct both positive and negative picks. Positive sorters look for desirable aluminium and steel cans or clear PET (polyethylene terephthalate) bottles to place into bunkers, Negative picks involve removing unwanted plastic bags or bulky items.

Sorted items are prepared for baling or, in the case of some types of plastic, are stored in bulk bags for transport to plastics reprocessors.

On another edge of the property two shredders help turn documents securely collected from Baguio customers into small shreds of paper to meet European Security Standard P4 (6mm x 25mm) or P5 (2mm x15mm) specifications.

Also housed on the property is a recycling education center and a meeting room with large windows overlooking the operation, where Baguio can demonstrate to customers the scope of its recycling activities.

Any remaining space is devoted to storage of outbound materials, which cannot remain on the property for long because of the limited space.

The cramped space is a circumstance that binds together many of the challenges faced by Baguio and by Hong Kong overall when it comes to addressing the future of recycling.
 

A tight fit

Edmond Ng says Baguio can engage in a much higher level of recycling activity than it does currently, but only in a theoretical Hong Kong with available space.

An inability to find affordable space has pressured Baguio’s recycling operations in the midst of its current two-year contract and may unfortunately be pointing toward future barriers as well.

Ng says he is confident Baguio could find enough material in Hong Kong to feed a 500-tons-per day sorting plant, but trying to find buildings or land to do so has been profoundly discouraging.

Open land of any kind is scarce in Hong Kong, and land zoned industrial is rarer still. Less than 2% of Hong Kong’s GDP is derived from manufacturing, and the SAR has subsequently minimised land zoned for this purpose, especially in the face of a perceived housing shortage.

The company’s Fanling location is technically zoned for storage, meaning that even if it had sufficient space there, Baguio would face limits into how much machinery it can operate. The storage zoning category is much more widespread, says Ng, as the SAR places a higher value on the warehousing and logistics critical to cross-border trading with the People’s Republic of China than it does on manufacturing.

The company also leases land in Tai Po, also in the New Territories, to cultivate plants for its landscaping division. This land, likewise, cannot be rezoned for industrial purposes. (Even some wood grinding and organics recycling the company hoped to do at the Tai Po site has been challenged as incompatible with the agricultural zoning.)

Ng estimates Baguio would need 80,000 to 100,000 square feet (7,435 to 9,290 square metres) of property for a 500-tons-per-day plant. “Those types of structures are simply not available in Hong Kong,” he says.

Even if such a building came onto the market, its owner would seek a two-year or even year-to-year lease—standard practice in what has been a hot Hong Kong real estate market most of this century. “We can’t even get a five-year lease, let alone a 10-year one,” says Ng.

But in the relatively low-margin postconsumer recycling sector, installing capital equipment on a two-year lease is an untenable position in which to be.

Among the potential solutions, one would be to seek space in neighboring Guangdong Province in China. However, China’s Green Fence customs and environmental regulations make the hauling of mixed materials and PET bottles across the border problematic.

Ng says another possibility will be to secure land in Hong Kong’s EcoPark, a 200,000 square metre (2.15 million square feet) light industrial park in the western New Territories.

Hong Kong’s remaining landfills are nearing their capacity limits, and the SAR’s Environmental Protection Department has identified increasing recycling rates as a logical response.

Ng says it is in the best interest of policymakers to help a company such as Baguio gain access to affordable land on an extended lease so it can create the infrastructure necessary to follow through on increased, aggressive collection of recyclable plastics, paper and metal.

“Right now the government does not have especially strong disincentives to prevent discarding waste, or any incentives to recycle,” says Ng. “But the government is starting to take small steps; this is what we are hoping to see.”


 

The author is editor of Recycling Today Global Edition and can be contacted at btaylor@gie.net.

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