White goods go eco
by Yaeko Mitsumori

When the Japanese government started searching for that certain Wa, or harmony, between consumer appliances and the environment, they immediately saw white. Even with current government mandates to reuse and recycle common household and office trash, the island nation of Japan -- which annually produces thousands of tons of garbage -- is slowly running out of space to dump it.

White goods -- durable appliances like TVs, refrigerators, air conditioners, and washing machines -- contain metal, plastic, glass, and other valuable materials, and when they are no longer serviceable, they are usually discarded. The Association of Electric Home Appliance Manufacturers of Japan estimates that a mere 30 percent of used white goods are actually collected and recycled, with the rest ending up as landfill. But the government is eyeing an opportunity to end this long-accepted but wasteful practice, and make the idea of recycling more acceptable to the manufacturers involved. If all works out, sometime early in 2001, waste disposal Wa might be achieved.

It's the law

On May 12, a new recycling plant in Chiba Prefecture -- Hyper Cycle Systems -- kicked off operations. At the plant, some 30 workers are assigned to dismantle four types of products, and much of the work is done with bare hands or with only a few simple tools. Disassembled parts are then crushed into pellets and classified into reusable resource categories such as steel, aluminum, or glass. The plant aims to process around 300,000 used products annually, and this effort serves as an example of the future of white good manufacturing -- a future where the production plant and the recycling plant are virtually one in the same, and work in perfect harmony.

The plant was established by Mitsubishi Electric Corporation, in cooperation with Ichikawa Kankyo Engineering Co., a local recycling agency, in order to meet the requirements stipulated in the Law for Recycling of Specified Kinds of Consumer Electric Goods, which will take effect in April 2001. The corporate and consumer requirements defined in this law may just be the solution to one of Japan's biggest problems: where to dump the huge amounts of garbage produced by the densely populated but tiny island country of Japan. According to the law, all electric appliance manufacturers and importers must recycle their used products. In practice, this will mean that retailers are responsible for picking up used items at the customer's house and bringing them to a designated recycling center, and the manufacturers are responsible for transporting the items from the collection center and recycling them at their plants. Consumers, unfortunately, will ultimately bear the most of costs.

With the recycling law soon taking effect, all major Japanese consumer electric goods manufacturers are constructing new recycling plants by themselves or tying up with major recycling agents, while at the same time trying to develop more eco-friendly products. Starting in 2001, it is forecast that 21 million used electric appliances will be generated annually, and of them, 30 percent -- or 6 million units -- are expected to be recycled. Since Mitsubishi has 10 percent of the market for consumer appliances, the firm is expected to be responsible for collecting and recycling a significant portion of that total -- 600,000 units per year. In accordance with the law, Hyper Cycle Systems is scheduled to double its processing capacity by 2001.

Testing the waters

Matsushita Electric Industrial Co., which has the top share in three of the four types of white goods (TVs, refrigerators, stoves, washing machines) and is one of the largest consumer electric goods manufacturers in the nation, is gearing up its efforts to meet the law head-on. In March of 1998, Matsushita decided to experiment and opened a recycling plant within the Sunny Metal Co. factory in Osaka. At the plant, almost all recycling procedures are done by hand. On the TV set line, for instance, a factory worker removes the cathode ray tubes from the TVs, breaking them apart and separating them by content (ordinary glass, lead-containing glass, etc.). The glass is then crushed into cullet, and sent out to Nippon Electric Glass Co. for use in making new CRTs. "Earlier than any other company, we started recycling all four of the designated consumer electric appliances," said Takashi Yoshimura, general manager of Matsushita's Corporate Environmental Affairs Division. The recycling law stipulates the target recycling ration for TVs at 55 percent (of the TV's original contents). Since 67 percent of most TVs is glass, manufacturers can clear the law merely by recycling the CRT.

According to Yoshimura, the target recycling rates for refrigerators and washing machines are quite low (50 percent each) because they contain more plastic parts, which are hard to recycle. On the other hand, the rate for air conditioners is 60 percent -- the highest for the white goods because they mostly contain metal, which is easily recycled.

Although these targets are quite low compared to those of European nations, the Ministry of Industry & Trade (MITI) defines "recycle" quite strictly. When agents purchase components, glass, metal, or plastic from dismantled consumer appliances, they will be considered "recycled." But if a manufacturer like Matsushita pays money to an agent and asks them to process these materials, they will not be considered recycled under the new law. "Due to the strict definition of recycling, it is quite difficult to clear even the current 50-60 percent targets," Yoshimura said.

Renew, reuse, recycle ... revise

For some Japanese manufacturers, implementing the newly revised Energy Conservation Law may be difficult. Enacted in April this year, the revised law requires manufacturers of eight types of electric consumer products and PCs to reduce the products' energy consumption within a certain timeframe. MITI officials chose the top runner in each category of consumer electric appliances and PCs, by level of energy consumption, from manufacturers' product brochures in the fall of 1998. Then the target year for each category was picked -- varying between 2003 and 2007 -- and the government urged manufacturers to make plans for meeting the goals. Matsushita, for one, has responded quickly; according to Yoshimura, Matsushita has already met the target for TV sets and PCs, and is going to meet the VTR target before year end.

For computer manufacturers, the law's recycling requirements are nothing new; they've been recycling used computers -- mainly mainframe and workstation machines -- for the past few decades. Recently, they started recycling desktop computers as well. In 1969, the top PC maker in Japan, NEC Corp., started collecting and recycling used computers. In October 1998, NEC started collecting and recycling used corporate PCs, charging JPY4,100 per unit. One unit typically consists of a PC, a printer, and a display, weighing approximately 50kgs. NEC Logistics, an NEC subsidiary specializing in distribution, picks up used computers which are then recycled at a plant in Kowa belonging to yet another NEC subsidiary. NEC maintains 18 collection centers and three recycling plants nationwide.

The company is doing well, collecting 89 million tons of used products a year, and achieving 90 percent of its mandated recycling rate. However, 70 percent of the computers collected are mainframe and workstations, and PC and other types account for a mere 30 percent. The number of used PCs that are collected is still small, but Masakazu Takayanagi, manager of the First Personal Computer Business Division of NEC, said the figure may jump after 2002 because PC sales increased drastically after Windows 95 was released in Japan in 1995, and PCs tend to be disposed of after seven years.

PCs could make the VIP list

At the moment, PCs are not included in the list of products covered by the recycling law, but could be added as soon as 2002. If so, the recycling requirements will cover all PCs -- corporate and personal. Ryoji Uchida, a MITI official overseeing the new law, said the ministry would consider expanding the list in the future.

Takayanagi added that NEC is ready to meet the requirements of the law because the firm is already recycling PCs for corporate use; the only concern for them is an expected drop in the recycling fee due to competition among recycling agents once the law takes effect. Osamu Mizuno, manager of NEC's Environment Control Division, explained that to cover all of the recycling costs, NEC would have to charge at least JPY8,000 per unit, compared to the JPY4,000 currently charged. Even now, competition is depressing collection fees. But even though prices are falling, they are still too expensive for the average home customer, who can use recycling pick-up services offered by municipal governments for as little as JPY700 per unit.

A shooting star

Fuji Xerox -- a leading copier and printer manufacturer -- is another high-profile company promoting the reuse of parts. At Fuji Xerox's Ebina Plant in Kanagawa Prefecture, there are two production lines: one for assembling products and another for dismantling used copiers. Each year, the Ebina Plant manufactures about 200,000 new copying machines and receives about 30,000 used ones. From these, parts are stripped, inspected, tested, and eventually incorporated into newly built machines. At present, 19 percent of new machines comprise 35-40 percent reused parts. Masaaki Bando, manager of corporate communications of Fuji Xerox, explained that the company was able to achieve this high ratio of recycling because the firm had a well-established distribution system. At present, 98 percent of their used machines are collected by Fuji Xerox Distribution, a wholly owned subsidiary of Fuji Xerox. The firm's goal is to improve the reuse ratio so that 25 percent of all of new machines produced in 2000 will contain over 50 percent reused parts. NEC's Mizuo said that of the total recycling costs, distribution account for 60 percent. How efficiently used products are collected is the key for successful recycling programs. Thanks to the origins of its business -- using a full-service and leasing model for its copier clients -- Fuji Xerox already has an advantage.

Raking in the yen

Right now, however, reuse efforts by major manufacturers have yet to pay off. Fuji Xerox paid about JPY400 million to construct its dismantling lines, which have proven to be very expensive to run. To meet regulations under the product liability law, the firm dismantles all 1,500 parts comprising each photocopier, cleans them up, and then inspects them for reusability. This requires specialized equipment and -- most importantly -- lots of staff, since most of the dismantling is done by hand. These up front costs should be returned when the firm reaches their reuse targets sometime in 2000, said Bando. "When we marketed the first products containing reused parts in 1995, US and European firms were ahead of us. But today there is little difference between us," he added.

In fact, many firms are starting to see Japan's new recycling law as a good business opportunity. NKK Corp., the second largest steel maker in Japan, has begun processing used plastic using their own facilities. In October 1996, the firm constructed a used plastic processing plant outside Tokyo, and is presently collecting 30,000 tons of used plastic from some 300 corporations around the nation. The plastic is burned at 2,400 degrees C -- producing no dioxin --and the blast furnace gas is then reused to operate the plant.

Further, NKK will construct another used plastic processing plant with a JPY4 billion investment to take advantage of opportunities stemming from the plastic containers recycling law that is due to be enacted in April 2000. Under the draft law, companies that produce, sell, or use plastic containers of any sort will be required to recycle their used plastic. NKK expects to process 300,000 tons of used plastic and earn some JPY10 billion from the business by 2010.

Eco-friendly

As Matsushita's Yoshimura pointed out, Japanese companies and individuals must start taking care of the environment. But difficulties remain in achieving widespread eco-consciousness. How the new recycling law will be implemented remains unclear, including the location of collection centers and how costs will be apportioned. All that manufacturers can do is try to prepare and carefully watch regulatory developments. MITI has announced that new regulations will be released by the end of the current fiscal year.

Some people are concerned that if large manufacturers enter the recycling business, thousands of recycling agents -- almost all are small mom and pop operations -- may loose their jobs.

From a consumer's viewpoint, the main problem seems to be that energy-saving products are expensive compared with ordinary products, but Matsushita's Yoshimura said this need not be so. For instance, Matsushita has reduced the types of plastic used for their products from an initial 30 different kinds to five, reducing production costs and retail prices. He also pointed out that once all products become eco-friendly, then overall costs should decrease. "At present, eco-friendly products tend to be expensive because in this transitional period we have to produce both eco-friendly products and ordinary products," he said. "But if we need to produce only the former ones, prices will decrease." He also noted the importance of the recent ecology boom in Japan. According to a recent survey conducted by the Prime Minister's Office, 70 percent of consumers pay strict attention to the impact of the products they buy on the global environment.

Although there are many unsolved issues, manufacturers will have to get a head start because the era is coming when consumers, not just the bureaucracy, will demand more environmentally friendly products or take their potential billions of yen in revenue elsewhere. And they won't be as patient as the government was.

Yaeko Mitsumori writes regularly for Computing Japan.

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