Disposable Plastic Lunch Boxes And Their Safety

Recently, the IPO application of Zhejiang Zhongxin Environmental Protection Technology Group Co., Ltd. (referred to as "Zhongxin Co., Ltd.") was accepted by the Shanghai Stock Exchange and plans to be listed on the main board. In this IPO, the company plans to raise 1.538 billion yuan, with CITIC Securities as the sponsor.

According to the prospectus, Zhongxin Co., Ltd. is mainly engaged in the research and development, production, and sales of naturally degradable plant fiber molded products. The company's main products include dining utensils for dining gatherings, takeout packaging utensils, other auxiliary supplies, and high-quality industrial packaging products. The market share of the group's products ranks among the top globally, with product sales covering over 100 countries and regions worldwide, providing green and environmentally friendly tableware for hundreds of millions of consumers worldwide.

Chain restaurants such as Burger King, Costco, Subway, Hema Fresh, Guangzhou Restaurant, and Juewei Duck Neck are all on Zhongxin's end customer list.

Zhongxin Co., Ltd. launched its seemingly inconspicuous plastic knife, fork, and spoon products, mainly seizing the development opportunity of green and environmentally friendly catering utensils. It uses waste sugarcane bagasse, bamboo pulp, and other materials to produce disposable tableware such as plates, bowls, and fast food boxes, which are sold to domestic and international markets.

Compared with degradable plastics, pulp molding has lower costs and more thorough degradation, making it one of the alternatives to traditional plastic products. Pulp molding usually uses recycled waste paper/cardboard, raw bamboo residue, bagasse, and other fiber materials, and is molded using molds.

At present, listed companies such as Yutong Technology (002831. SZ), Dashengda (SH: 603687), and Jia Lian Technology (301193. SZ) have successively laid out pulp molding products.

1. Using sugarcane as tableware, the largest pulp molded tableware enterprise in China

Traditional plastic products are mainly made of polymer compounds such as polyethylene and polyvinyl chloride, and their natural degradation is very difficult, with a degradation time of up to 200 years. They can only rely on manual degradation, becoming a major challenge for human development.

In 2015, at the World Environment Day conference held in India, the United Nations reached a resolution to ban the use of disposable plastic products globally by 2025. Under this call, multiple countries or regions around the world, including the European Union, the Netherlands, India, Japan, and others, are legislating at the national level to gradually replace disposable plastic products.

Teng Bubin, the founder of Zhongxin Co., Ltd., entered the packaging field after graduating from vocational school. He has worked in companies such as Hangzhou Qingyu Electronics Co., Ltd., Jinhua Plateau Machinery Mold Co., Ltd., Qingdao Longxinda Industry and Trade Co., Ltd., and Green Four Seasons, accumulating rich experience in independent mold design, equipment manufacturing, and process flow.

Teng Bubin, who has been rooted in the industry for many years, had an early insight into the development opportunities of environmentally friendly and naturally degradable materials. In 2016, he established Zhongxin Co., Ltd., leading the market and began researching and developing pulp molding products.

Pulp molding is usually made by molding recycled waste paper/cardboard, raw bamboo residue, sugarcane residue, and other fiber materials.

After years of research, the company has mastered a series of core technologies for pulp molding production, including fluorine-free and high-temperature resistance technology, oxygen and moisture resistance improvement technology, and fiber modification technology for molded environmentally-friendly paper tableware. It can utilize natural plant fiber materials such as bagasse pulp and bamboo pulp from nature to achieve intelligent manufacturing of pulp packaging through mold molding. Currently, the company's products are widely used in catering, takeout, daily chemical, medical, and other industries Work package and other fields.

There are various alternative products for traditional non degradable plastics, including pulp molded products, biodegradable plastics (including biodegradable plastics and petroleum based degradable plastics, such as PLA (polylactic acid), PHA (polyhydroxyalkanoate), PCL (polycaprolactone), and coated paper products. Compared to other degradation materials, Zhongxin Group chooses natural plant fiber materials such as crop straw, which have the advantages of lower degradation difficulty, lower cost, higher efficiency, and more thorough degradation compared to chemically synthesized degradation materials such as PLA.

Under the ban on plastic products, the food and beverage delivery industry has been the first to bear the brunt. McDonald's, Starbucks, Xicha, and others have previously stated that they will no longer provide disposable plastic straws, which has heated up the market for green and environmentally friendly catering utensils, and traditional plastic tableware has begun to be phased out.

At that time, there were very few companies producing pulp molded products in the market, and Zhongxin Co., Ltd. rose to prominence, providing tableware for small chili peppers, Sam's Club, Burger King, Subway, Procter&Gamble, Hema Fresh, Guangzhou Restaurant, Juewei Duck Neck, and others. In this way, the company has seized the unprecedented development opportunity of green and environmentally friendly catering utensils, and is currently a leading global and largest manufacturer of biodegradable pulp molded catering utensils in China.

According to data from the China Pulp and Paper Research Institute, in 2021, there were 7 catering pulp molding enterprises with a production capacity of over 10000 tons and sales revenue of over 180 million yuan. Among them, Zhejiang Zhongxin Environmental Protection Technology Group Co., Ltd. ranked among the top with an annual production capacity of 58400 tons, accounting for about 18% of the total domestic catering pulp molding production, and its production and sales revenue far exceeded the second place. Secondly, Zhejiang Jinsheng accounts for about 9%, and Shaoneng Co., Ltd. accounts for about 6%. In the global market, according to Grand View Research data, the company's market share in the global pulp molded catering utensils field reached 12% in 2021. The production capacity of Zhongxin Co., Ltd. is expected to reach 156000 tons in 2022, accounting for approximately 26% of the total production capacity of catering pulp molding in China.

As of now, the group has three pulp molded tableware manufacturing factories, one biodegradable bag factory, and one intelligent manufacturing equipment factory in China.

2. Advantages of pulp molded packaging

The raw materials for pulp molding are plant fibers such as sugarcane bagasse, which have the ability to be renewable in a short period of time. At the same time, the use of raw materials is far lower than traditional gift boxes such as handmade boxes. By comparison, it was found that the use of pulp molding raw materials for gift boxes of the same size is only half of that of traditional gift boxes.

Under normal circumstances, pulp molded products discarded in the open air within three months can be completely degraded and composted under natural conditions. Protect the environment and eliminate white pollution!

Traditional handmade boxes, iron boxes, and plastic boxes violate environmental requirements from the perspective of raw materials. Most of them contain harmful substances such as PVC and acrylonitrile, which can cause irreversible damage to the ecological environment after treatment. Over 300 million tons of plastic are produced globally every year, of which approximately 2 to 8 million tons enter the ocean. These marine waste also seriously affects the ecological environment of the seabed, But often a plastic bottle takes an average of 700 years to degrade, and 80% of plastic bottles cannot be recycled. This shows how environmentally friendly and biodegradable pulp molded products have a positive impact on the environment!

3. Can many players stay at the top of the field after running?

Although the pulp molding industry in China started in the 1980s, its development has not been considered mature before. In recent years, with the further expansion of e-commerce, express delivery, takeaway and the continuous implementation of plastic restriction policies, driven by China's "carbon neutrality" and a series of environmental protection policies, people's demand for pulp molded tableware will gradually increase. In the industry's view, pulp molding in China may usher in a golden era of rapid development in the next few years, and the market capacity is expected to reach 100 billion yuan.

At the end of 2021, the total production capacity of pulp molded products in China was about 1.5 million to 1.6 million tons. By application field, the industrial packaging production capacity was about 600000 tons, catering utensils were about 500000 tons, and food packaging and other packaging were about 400000 to 500000 tons.

In recent years, with the increasing call for "replacing plastic with paper", multiple packaging product companies are accelerating their layout of pulp molding business and seizing the market.

Yutong Technology announced in April 2020 that it plans to invest 400 million yuan in Haikou National High tech Industrial Development Zone to build Yutong Technology · Hainan Environmental Protection Industry Demonstration Base, research and development, production, and sales of plant fiber molded products and high-end paper packaging. Its planned production capacity for environmentally friendly paper and plastic products is nearly 2 billion yuan.

Jialian Technology is also deeply involved in the field of plastic tableware, and its biodegradable material products mainly use PLA materials. Currently, it is also laying out natural degradation plant fiber molding products. In May 2022, it acquired 75% of the equity of pulp molding entrepreneur Debao for 165 million yuan; In December 2022, it was announced that it plans to invest approximately 1 billion yuan in the construction of the "Annual Production of 100000 tons of Bagasse Biodegradable Environmental Protection Material Product Project" in Laibin, Guangxi.

In 2021, Jinsheng Environmental Protection has a production capacity of 33400 tons of plant fiber molded tableware and a production capacity of 28400 tons.

In November 2020, Shaoneng Group replied with feedback that it is expected that by the end of 2021, the annual production capacity of ecological plant fiber paper tableware will reach 1468500 tons. In 2021, the actual production of ecological plant fiber paper tableware will be 19000 tons.

Da Sheng Da also announced in November 2021 that it plans to invest approximately 559 million yuan to build the "Intelligent R&D and Production Base Project for Pulp Moulded Environmentally Friendly Tableware" in Haikou, Hainan. After completion, it will have an annual production capacity of 30000 tons of pulp molded environmentally-friendly tableware.

The total amount of funds raised through the company's IPO is 1.538 billion yuan, of which 682 million yuan is planned to be used for the annual production of 100000 tons of sugarcane bagasse degradable environmental tableware project (Chongzuo Zhongxin Phase I) and 405 million yuan is planned to be used for the annual production of 100000 tons of sugarcane bagasse degradable environmental tableware project (Laibin Zhongxin Phase I). After reaching the production capacity, 60000 tons and 30000 tons of plant fiber molded environmental tableware will be added respectively; 300 million yuan to supplement working capital; The remaining 152 million yuan will be used for the R&D center construction project.

This IPO aims to expand the production of catering products, consolidate the position of Jialian Technology in environmentally friendly catering products, and lead the development of sugarcane bagasse environmentally friendly catering industry as an industry benchmark.

 
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