Industries provide for most of our materialistic needs by transforming and processing large quantity of materials, such operations exploit raw material from nature and produce harmful by-product, which pose serious threat on the ecosystems. Luckily, industrial systems do change overtime to adapt to the social, economic and political conditions. The evolving trend of industries should be toward increasing sustainable processes, increasing efficiency in production and use of by-product to cut down waste and emission. In this blog, I will elaborate the evolutionary process with the example of the sugar refinery industry.
1. Variation
Variation of individuals in a population occurs mostly through emergent genetic mutations, which commonly happens randomly by errors in the processes that deal with genetic materials. The individual itself never gets it intentionally but rather passively has it happen and is likely to be ignorant of it.
However, the variations occur in the industrial world are most likely to be planned in order to solve existing problems or self-improve to be more competitive. Take the example of the sugar industry which faces pressure from market variations, profit seeking and waste reduction, different ways of improvements are discovered through time by different firms forming the variations of sugar industries.
Guitang Group was originally a Chinese state owned sugar refinery with alcohol production plant to use its own molasses (by-product). To reduce the other by-product, bagasse, paper mills were established in the industry to utilize it. Then, cement and fertilizer productions were incorporated in the industry to share waste energy and compounds. Later on, the industry reached out to their suppliers, competitors and the local government to expand their production chain. Guitang Group successfully turned its waste into revenues and maintained its market share as the top sugar refining industry in China (Zhu). Detailed material and by-product flow are shown in the graph below.
(Zhu)
On the other hand, British Sugar, UK’s largest sugar producer by market share, a potential competitor of Guitang Group in the global sugar market also managed to turn its waste streams and emissions from core production processes into useful and positive inputs to new product lines. Its primary resource is beet therefore it has different by-products and emission problems from Guitang, whose primary resource is sugar cane. British Sugar’s business model that offer additional synergistic and profitable product lines (illustrated and described in more details below) are therefore a variation from Guitang Group.
(Short, 2014)
Rather than discarding the soil and stone that come with raw sugar beet, British Sugar captures value by separating, cleaning, sorting and selling stones to building trade as aggregate and high quality top soil for landscaping. Calcium carbonate from precipitation from sugar purification sold as soil conditioner. Same by-product bagasse was used differently from Guitang. British Sugar built facility to press and dry to valuable high-fiber animal feed pellets. 18 hectares of glasshouse was built and used low-grade heat (hot water) from sugar production and CO2 rich flue gas from CHP transferred to cultivate tomatoes. Waste residual resin from sugar crystallization process, betaine was extracted and sold to health care sector for use in shampoos, moisturizers and cosmetics. Moreover, bioethanol facility was built based on fermentation of sugar products (Short).
And of course there are other variations of sugar production industries: some may have different strategies to use their by-product, some may sell them to bigger companies like Guitang and British Sugar, some may try lobby politicians to loosen up the environmental regulation and some may simply just pay waste treatment to get rid of their by-products. Overall, "variation" is a rather strong mechanism when describing the sugar industrial systems.
2. Retention/transmission
Transmission of the gene occurs by asexual or sexual reproduction in nature. Offsprings carries their parents’ genetic materials and inherit advantageous or disadvantageous traits for survival. The advantageous “genes” in the discussed industry population are the strategies that makes a company more competitive in a market and can be retained in the company and or spread to other companies. For the retention of a strategy, the company can routinize it into daily practice or simply keep the facilities, as what happened with both British Sugar and Guitang. For the transmission to other companies, it has to be recognized by other companies or the government as effective and then become adopted. Competition between companies of the same function also makes the transmission difficult as the original company might keep the technical information confidential to be ahead of the game. Even if the information were made public, it might not be feasible in other companies.
Guitang and British sugar achieved profits in the market and cut down environmental impacts, which pleased the government and set up a nice company image for consumers. Such a successful business model can be considered advantageous gene. The added facilities were kept in both industries and kept operating and improving. However even though the retention of the strategy was successful, the transmission to similar companies was not easy. Guitang’s model was promoted by the Chinese government however such projects didn’t become wide-spread. Zhu suspected the main reason to be that other firms not being willing to deviate from established business model nor diversify from core competences. Other companies, though similar to Guitang and British sugar may not have the capacity in their production to support such strategies. Also, industrial symbiosis may require huge initial investment, which is difficult for smaller firms.
3. Selection
Natural selection is literally selection by nature. The environmental conditions: climate, food abundance, predators or even the color of local tree barks can be selective forces to favor one trait than the other.
There
are two main forces of selection for the industries: competition in
the market and governmental regulation. A company becomes more
competitive in the market with increased revenues, product quality,
operational efficiency and improved environmental performances. And
it was achieved by both Guitang Group and British Sugar.
For example, in British Sugar, the division of animal feed production from bagasse has become major supplier of animal nutrition and feed products. The tomatoes in the glasshouse grow twice as fast because of the high CO2 level and now it has become the largest producer of specialty salad tomato in UK. Betaine extracted from its operation also made it the largest betaine supplier in the world. Moreover, its bioethanol facility produce 70 million L of bioethanol per year for blending with gasoline as transportation fuel. Overall, in British Sugar, each product line is individually profitable and 25% of its revenues is generated from its co-products and is important source for future growth.
Their strategy has also delivered significant environmental benefits through improvements in energy efficiency, successful capture and reuse of by-products, reduction of landfill waste and waste water, and improved use of agricultural land. All of which sets up a good image for it while complying with governmental regulations.
Though it seems the market and political systems are efficient selection forces for the sustainable practices like Guitang and British Sugar to gain advantage to other companies, the systems are both imperfect. Market competition depends largely on economic terms, environmental practices that are less profitable often have a hard time to survive. Smaller scale companies that lacks the power of Guitang and British Sugar may have much trouble adopting similar strategies and survive the investment period before getting returns. As the market force currently doesn’t intentionally favor environmental benefits over money. On the other hand, governmental regulation forces may be more controllable by people’s intentions than market force, however, this also makes it subject to adverse influences. Lobbying from rich but dirty oil companies in the US has long proved their power to sway politicians to turn an blind eye.
References
Short, Samuel W., Bocken, Nancy M.P., Barlow, Claire Y. and Chertow, Marian R. (2014). From refining sugar to growing tomatoes. Journal of industrial ecology.
Zhu, Qinghua, Lowe, Ernest A., Wei, Yuan-an and Barnes, Donald.(2007). Industrial symbiosis in China, a case study of the Guitang Group. Journal of industrial ecology. 2007.
For example, in British Sugar, the division of animal feed production from bagasse has become major supplier of animal nutrition and feed products. The tomatoes in the glasshouse grow twice as fast because of the high CO2 level and now it has become the largest producer of specialty salad tomato in UK. Betaine extracted from its operation also made it the largest betaine supplier in the world. Moreover, its bioethanol facility produce 70 million L of bioethanol per year for blending with gasoline as transportation fuel. Overall, in British Sugar, each product line is individually profitable and 25% of its revenues is generated from its co-products and is important source for future growth.
Their strategy has also delivered significant environmental benefits through improvements in energy efficiency, successful capture and reuse of by-products, reduction of landfill waste and waste water, and improved use of agricultural land. All of which sets up a good image for it while complying with governmental regulations.
Though it seems the market and political systems are efficient selection forces for the sustainable practices like Guitang and British Sugar to gain advantage to other companies, the systems are both imperfect. Market competition depends largely on economic terms, environmental practices that are less profitable often have a hard time to survive. Smaller scale companies that lacks the power of Guitang and British Sugar may have much trouble adopting similar strategies and survive the investment period before getting returns. As the market force currently doesn’t intentionally favor environmental benefits over money. On the other hand, governmental regulation forces may be more controllable by people’s intentions than market force, however, this also makes it subject to adverse influences. Lobbying from rich but dirty oil companies in the US has long proved their power to sway politicians to turn an blind eye.
References
Short, Samuel W., Bocken, Nancy M.P., Barlow, Claire Y. and Chertow, Marian R. (2014). From refining sugar to growing tomatoes. Journal of industrial ecology.
Zhu, Qinghua, Lowe, Ernest A., Wei, Yuan-an and Barnes, Donald.(2007). Industrial symbiosis in China, a case study of the Guitang Group. Journal of industrial ecology. 2007.
