Solving agriculture's white pollution problem through innovation

Yuan Zhimin, a deputy to the National People's Congress and chairman of Kingfa Sci. & Tech. Co., Ltd., recently told reporters that he hopes the government can increase support and guidance, and encourage people to actively embrace and adopt new technologies and new products.

Starting a business is hard, but building a great enterprise is even harder.

"Among the mighty army of entrepreneurs, outstanding leaders are bound to emerge in every industry, but perhaps only those who run at the very front of their industry will discover that, many times, the road ahead is not easy to travel." Yuan Zhimin, a deputy to the National People's Congress and chairman of Kingfa Sci. & Tech. Co., Ltd. (Kingfa Sci. & Tech. for short), said in a recent interview with China Economic Weekly. Small-scale ventures are not difficult, because they only require simple imitation, but truly building a great enterprise requires constant innovation.

Yuan Zhimin said, "Innovation also requires the support of multiple factors such as the social environment, the market and policies. In many cases, innovation runs ahead of these factors, and entrepreneurs have no choice but to face considerable awkwardness, and even risk. However, as the innovation environment keeps improving, everything fills me with hope."

Investing 1 billion yuan over 12 years to solve the white pollution problem

In 1993, Yuan Zhimin and his classmates came from Beijing to Guangzhou after graduation to start a business. The four young men, full of passion, used 20,000 yuan they had borrowed to found Kingfa Sci. & Tech., and Yuan Zhimin formally entered the plastics industry and quickly expanded across the country; in 2004, Kingfa Sci. & Tech. was listed on the mainland A-share market, and afterwards gradually pushed into more technology-intensive fields such as new materials for treating white pollution; in 2014, Kingfa Sci. & Tech.'s operating revenue reached 20 billion yuan. As of now, Kingfa Sci. & Tech. has become the No. 1 new materials enterprise in the Asia-Pacific region and a global leader. "Economic and social development has encountered some difficult problems, and enterprises need to rise to the challenge and use innovative technology to overcome them. Only then can an enterprise seize opportunities, find its reason to exist and achieve substantial development." Yuan Zhimin told reporters that the problem he chose to tackle is precisely the fundamental cure for white pollution and other issues.

So-called white pollution refers to hard-to-degrade white foam plastic waste. At present, the plastic products generally used in our country take at least 200 years to degrade. In agriculture, waste agricultural film and plastic bags left in fields for long periods cause soil pollution and crop yield reductions. Hu Hengyang, a inspector of the Department of Rural Economy of the National Development and Reform Commission, told China Economic Weekly that 350 million mu of land nationwide is polluted to varying degrees, with 50 million mu heavily polluted. According to the reporter's visits and inquiries, white pollution is precisely one important cause of soil pollution. "Strictly speaking, white pollution has already threatened the sustainable development of our nation." Yuan Zhimin said that in response to problems such as white pollution, Kingfa Sci. & Tech. has continuously increased investment and brought in large numbers of high-end talent. It now has more than 130 doctoral degree holders and more than 600 master's degree holders, and over 12 years it has invested more than 1 billion yuan to research a solution. As of now, Kingfa Sci. & Tech.'s research on controllable fully biodegradable mulch film technology has achieved a major breakthrough, which can effectively solve non-point source pollution in farmland, while its effects in raising temperature, preserving soil moisture and increasing yield have approached those of traditional mulch film, gaining recognition from relevant departments.

High-tech environmentally friendly mulch film faces difficulties in promotion

Just as one problem was solved, an even bigger one followed. Although Kingfa Sci. & Tech. has achieved commercial success in new materials, its controllable fully biodegradable mulch film technology has encountered certain difficulties. Yuan Zhimin told China Economic Weekly that because the new mulch film developed by Kingfa Sci. & Tech. is more expensive than traditional mulch film, it seriously affects farmers' willingness to use it, and at the same time there is a lack of government support, making this technology difficult to promote.

Yuan Zhimin did some calculations. If controllable fully biodegradable mulch film is used, the mulch film cost is 200 yuan/mu, with no other costs; if traditional mulch film is used, the mulch film cost is 65 yuan/mu, and the recovery cost is 50-60 yuan/mu. Overall, the cost of traditional mulch film is about 120 yuan/mu, meaning the controllable fully biodegradable mulch film costs 80 yuan/mu more than traditional mulch film. Yuan Zhimin said that because of the price factor, users will not actively use it. But from a higher perspective, controllable fully biodegradable mulch film can solve the white pollution problem and can solve environmental problems, and this aspect cannot be ignored; moreover, if traditional mulch film is used, multiple steps such as recovering the mulch film and cutting the mulch film are also needed. Each additional labor step means additional labor input. If these additional labor inputs are also counted as costs, then in fact the comprehensive cost of adopting controllable fully biodegradable mulch film technology is lower; in addition, some crops can achieve increased yield and income. But users seem not to pay attention to this point.

Then, can enterprises capture the market by lowering prices?

In response, Yuan Zhimin said that the cost of material synthesis is relatively high, and enterprises do not have much room to lower prices. Although the potential for cost optimization is still great, most related enterprises have fallen into a vicious cycle. He said that in theory the cost of new technology could be reduced through industrial scale effects and technological innovation, but because investment is high and returns are absent, the huge investment required is difficult for enterprises alone to achieve, ultimately greatly restricting the development of the industry.

The reporter learned that at present more than 20 synthesis and modification enterprises in this domestic industry are all in a state of severe loss, and one enterprise has already gone bankrupt. Yuan Zhimin said: "Even so, most people have already realized the severity of white pollution and have seen the determination of the government and society to tackle white pollution, so this path will definitely succeed if we keep going. I believe the days ahead will be better, because innovation-driven development has become a social consensus. At the same time, we have a strong R&D team in new materials; as long as we keep at it, there will be results, so we will keep persisting."

Nationwide entrepreneurship and innovation still need further government support

Innovation-driven development cannot be separated from government support. In the 2015 government work report, Premier Li Keqiang also clearly stated that the government must be brave enough to carry out self-revolution, leave enough space for the market and society, and build a good stage for fair competition. Yuan Zhimin told China Economic Weekly that he hopes the government can increase support and guidance, and encourage people to gradually adopt biodegradable mulch film, this new technology and new product. To this end, for three consecutive years from 2013 to 2015, his proposals all focused on white pollution and changing soil pollution.

Yuan Zhimin said that in fact, over the past two or three years, he has already felt various positive changes. For example, this year, departments including the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Finance and the Ministry of Agriculture have made clear that trials of controllable fully biodegradable mulch film technology will be carried out in 11 provinces, which is clear progress. "This report by the Premier is inspiring, and it elevates innovation to the national level. I feel that the spring of technology enterprises has arrived." At the same time, at this year's Two Sessions, some deputies to the National People's Congress and members of the Chinese People's Political Consultative Conference pointed out that in the upcoming nationwide entrepreneurship and innovation drive, the role the government can play is undoubtedly enormous. On one hand, entrepreneurship and even innovation by enterprises still require government support, including policy support, fiscal subsidies, financial guarantees and social security; on the other hand, for some enterprises that fail in entrepreneurship or encounter difficulties in innovation, the government can consider providing a fallback when necessary.