Sustainable development has become a top priority for all countries in the world and the business community is key to each nation’s plans to achieve sustainable growth. Coca-Cola Viet Nam has forged its own path and risen among successful sustainable businesses able to balance performance and environmental protection. To discuss the topic in detail, the Vietnam Environmental Administration Magazine (VEM) speaks to Le Tu Cam Ly – Legal and Public Affairs Communication Director – Indochina Coca-Cola Beverages Vietnam Ltd.
Can you tell us about the operation of Coca-Cola Viet Nam and the firm’s sustainable growth targets in Viet Nam?
Coca-Cola was first introduced to people in Atlanta, Georgia, US in 1886 and became attractive for its smell and colour. Since then, the product smell and colour have been preserved by the people who have whole-heartedly produced, distributed and promotedthe product in the world market. For that reason, Coca-Cola has gained a name for itself as the world’s top beverage brand.
Le Tu Cam Ly – Legal and Public Affairs Communication Director – Indochina Coca-Cola Beverages Vietnam Ltd
After nearly 100 years, Coca-Cola took its first steps in Viet Nam in February 1994 with initial investment of US$163 million following the US decision to remove trade sanctions imposed on Viet Nam. Coca-Cola quickly established three associate companies in all three regions of Viet Nam. The northern association company was the co-operation between Indochina Coca-Cola with the Vietnam Food and Agriculture Co (Vinafimex), which was founded in August 1995. The southern association was Coca-Cola Chuong Duong, and the central one was Coca-Cola Non Nuoc (founded in January 1998). In October 1998, the Vietnamese Government allowed associate companies to become 100 per cent foreign-owned businesses, helping Coca-Cola purchase the counterpart capital from Vietnamese partners to fully control the three associate firms. In 2001, the three associate companies completed the process of turning into foreign-owned businesses with $350 million worth of capital investment from Coca-Cola.
At the moment, Coca-Cola Viet Nam creates 4,000 direct jobs and helps generate 6-10 times that number in indirect jobs from its supply chain. Being positioned in the non-alcohol sector, Coca-Cola Viet Nam has introduced many products in various segments from soft drink (Coca-Cola, Sprite, Fanta) to mineral water (Dasani) and energy drinks (Samurai, Aquarius). Huge market demand for those products helps Coca-Cola Viet Nam earn trillions of dong in revenue each year though the selling prices are just thousands of dong. In 2015 and 2016, the revenue of Coca-Cola reached nearly VND7 trillion and its post-tax profit hit VND500 billion each year. The company in these two years paid more than VND120 billion worth of corporate tax each year.
The sustainable development targets of Coca-Cola Viet Nam so far have come from the practical needs of the local authorities and people, ranging from demand for clean energy, water and responses to climate change, to responsible production, job creation, social equality and raising benefits for women. Based on these principles, the company has created its “share value policy” that focuses on four key factors: water, women, improvement of living conditions, and management and recycle of plastic wastes. Striving to achieve those targets, Coca-Cola Viet Nam was honoured among the top four sustainable enterprises in 2017 by the Vietnam Chamber of Commerce and Industry (VCCI) and among the top five enterprises with the best working environment by Anphabe.
What are the firm’s initiatives in collecting and recycling cans and bottles sold in Viet Nam?
We acknowledge plastic waste is quite worrisome for the environment. At the beginning of 2018, Coca-Cola announced that the company by 2030 would collect all cans and bottles it sells for recycling under the “Design, Collect and Co-operate” strategy. This is part of the company’s comprehensive plan named “A world without waste”.
Le Tu Cam Ly represents Coca-Cola Viet Nam to receive the 2017 Sustainable Business Award from VCCI
There are some initiatives that Coca-Cola has been implementing in Viet Nam to realise its global sustainable growth plan such as:
Zero waste to nature: this aims to reach four goals in resolving plastic waste problems; planning the development of sustainable business models; developing the value chain based on the circular economy model; and proposing policies for the development of the Vietnamese circular economy. Coca-Cola Viet Nam is now working with VCCI and other partners to test new production methods for the plastic industry in 2018-2022. Then, the pilot results are expected to become the foundation for other industries such as steel, cement, glass, wood, agriculture and cattle farming, thus forming step-by-step the sustainable circular economy and constructing an official recycled material market in Viet Nam.
“Fostering creativity for recycling awareness” is a project that’s undertaken by Coca-Cola Viet Nam and UNESCO. The project will start its pilot phase at the Cu Lao Cham Marine Park and surrounding areas of the Hoi An Ancient Town – a city that was recognised as UNESCO World Heritage Site in 1999. The pilot phase focused onraising public awareness (until 2010) and helping people turn their awareness into real actions in collecting, recycling and re-using solid and plastic wastes. At the same time, the project also created a network of activities to collect and recycle wastes such as discussions and practices in collecting wastes and cleaning the sea. EKOCENTER – a Coca-Cola Viet Nam community-supporting unit – would help expand the scope of those activities to other provinces and districts after the test in Hoi An.
What has Coca-Cola Viet Nam done to become a top business that makes the best use of renewable energies and protects the environment?
Coca-Cola Viet Nam plans to minimise production impacts on the environment and promote the circular economy through some activities such as reducing the use of water, energy and packages and using recycled plastics. By 2020, the company targets to cut 25 per cent of the impacts made by its carbon footprint in its value chain; curb the amounted of used water from 1.8 litres to 1.68 litresper each litre of soft drink produced; reduce the amount of used energy from 0.44 millijoule (MJ) to 0.40MJ per litre of soft drink produced; and cut the amount of used packages such as bottle, cap, can, label and carton box.
Seizing the global trend in environmental protection, Coca-Cola Viet Nam has made a huge investment in research and development of new facilities and technologies, which are environmentally friendly, for its three factories in Ha Noi, Da Nang and HCM City. Coca-Cola has recently spent nearly $5 million to develop a smart warehouse and upgrade the waste water treatment system by equipping the system with membrane bioreactor technology for its Da Nang factory. In addition, Coca-Cola Viet Nam has approved a number of sustainable energy programmes such as promoting the use of natural gas and biomass energy for all factories to reduce the consumption of fossil energy, and applying a solar energy system to boil water.
As one of the sustainable multinational corporations in Viet Nam, what has the company done to assist local firms with their sustainable development course?
As we plan to share experiences and are willing to develop further together, Coca-Cola Viet Nam always helps small- and medium-sized enterprises (SMEs) to improve their corporate governance and competitiveness and develop a circular economy.
In 2017, Coca-Cola Viet Nam co-operated with the US-ASEAN Business Council (USABC) and VCCI’s Vietnam Business Council for Sustainable Development (VBCSD) to implement the project “Assistance for Vietnamese SMEs towards sustainable development”. The project aimed at helping Vietnamese SMEs enhance their work flow, improve competitiveness to join the global value chain, and become partners and suppliers in the global ecosystem of multinational corporations like Coca-Cola. Through the project, eight SMEs have become Coca-Cola’s suppliers.
Besides, Coca-Cola Viet Nam has made $100,000 worth of investment in training for local businesses to improve their capabilities and skills to meet the requirements of supply chain, creativity, trade and social responsibility in the Industry 4.0.
Coca-Cola Viet Nam has also worked with the Vietnam Women Entrepreneur Council (VWEC) and the Vietnam Women’s Union (VWU) to organise e-learning courses at EKOCENTER offices. Through the training, the companyhas shared its experiences with thousands of female trainees and supported them to start their own businesses to improve living conditions, create more jobs and develop local regions’ economies.
By Huong Mai
(This article was puplished on the Environment Magazine, Enghish III/2018)