The past decade has been tough for textile manufacturing, with its contribution to the Australian economy falling by 24 per cent since 2006. So why is a multinational textile manufacturer such as Interface recommitting itself to Australian production at a time when the sector is in decline?
In part, our decision to commission a multi-million dollar carpet factory in Minto NSW is due to our ability to create one of the most environmentally sustainable facilities ever constructed in this country.
In an atmosphere where warring ideologies are fighting about carbon taxes and emissions schemes, for us, the environment and profits are not a zero-sum game: the environment and profits work hand-in-hand.
Interface Australia is the local arm of the modular carpet giant, Atlanta-based Interface, Inc, which runs carpet factories around the world. Under the guidance of Interface founder, the late Ray Anderson, the company has – since the mid-1990s – pursued ever-increasing environmental benchmarks, the most famous being Mission Zero, which is a promise to eliminate any negative impact on the environment by 2020.
In July last year, the 40 year old Interface factory at Picton in Sydney’s south-west caught fire and burned to the ground. The company had a choice – to rebuild and continue manufacturing in Australia, or make Interface Australia a marketing and distribution presence for carpets made in its other plants in South East Asia. Interface is a US-listed company on the Nasdaq, so the decision had to make financial sense.
The company decided to rebuild, with environmental principles at the heart of the profitability equation. How is this possible?
For a start, making a business both green and profitable starts with a rethink of what ‘pollution’, ‘effluent’ and ‘carbon emissions’ actually mean.
For many leaders, these are external threats, most likely to appear in the form of regulators, environmental audits, green NGOs and carbon taxes. But here’s another way of looking at pollution: it’s waste. It’s the thing you produce but can’t charge for. You have to carry overheads to produce waste, but you derive no income from it and it costs your organisation money to dispose of it.
In most carpet manufacture, the biggest waste products are water and the carbon emissions from gas and electricity use.
Some carpet styles take 300 kilograms of water to dye one kilo of carpet yarn. Given that there are many tonnes of carpet in the average office building, you might spare a thought for how much water was turned into effluent to create that carpet.
So what do you do with a process that seems to be at the heart of your industry?
Interface simply changed the process, so the nylon yarns used in its modular carpet are injected with colour at the point where they are extruded, rather than being dyed later. The process requires no water. But as an illustration of how environmental innovation tends to create other benefits, our nylon yarns create more durable carpets with much less fade than the water-dyed carpets.
We have a similar record with our attempt to reduce volatile organic compounds (VOCs) from the backing and latex we use in our carpet. By working with our suppliers in Asia to implement a new process, we now use one of the lowest VOC-emitting latex and backing in the global industry, creating better environments in work spaces and less pollution in the production phase.
It’s been the same approach with our energy use and therefore, carbon emissions. In the last decade, we’ve grown our business five-fold while also reducing power consumption by 80 per cent. All of our electricity now comes from green options and the company also offsets its carbon.
By committing to local manufacture at our new facility in Minto, we’ve opted for less transport carbon-miles and this also goes straight to our bottom line. For a start we will also reduce our carbon emissions due to the size and location of our new location.
In our old configuration, we had manufacturing at one site, storage at another and distribution at another. At the new factory we’ll take out the intra-company transport costs and significantly reduce other transport miles by locating in one facility on a major trucking motorway and beside the Minto Intermodal terminal, meaning we’re on the rail line that delivers goods from Port Botany. By locating on rail/trucking hubs and on arterial routes, you not only reduce carbon emissions and costs, but also your contribution to traffic. Any organisation can at least start its environment-neutral journey with such a decision.
Initiatives like this create unexpected bonuses. For instance, the Global GreenTag rating system for building materials labels our carpet as the only 100 per cent carbon neutral carpet in the world. So we make the effort for environmental reasons and we end up with a desirable marketing outcome and a carpet that is very popular with architects and designers.
Waste comes in many forms and one of the forms we’ve been focused on for more than a decade is the issue of damaged and replaced carpet.
Generally, carpet goes to landfill when it is ripped out for refurbishments. Locally, Interface launched a program in 2007 called ReEntry, in which Australian and New Zealand property owners could have their old carpet taken away for recycling. Now, property owners can complete the circuit by purchasing modular carpets from Interface which are made from 100 per cent recycled yarn, sourced from our ReEntry carpet recycling program and discarded fishing nets.
This program has proved so popular that in our new factory we have doubled the space we will use for storing and packing the old carpets that are returned to us from our customers.
Some time ago we attempted to formalise our ‘influencer’ role with our suppliers, and we introduced EPDs – environmental product declarations. These are statements from our suppliers that let us know what is in the supply chain before we buy it. The EPDs met with resistance from some organisations, but most of the companies who now supply Interface tell us their environmental impacts have come down, their quality has improved and they are now more profitable.
There is still work to be done: when you focus on waste and environmental impact, you are subjecting yourself to a list that never ends. For instance, having made such major inroads into our electrical power usage (thus reducing our carbon footprint) we recognise that most of our energy needs now come from gas which means carbon and methane emissions. Our engineers are working on a cleaner way of using gas and given their record – nine global patents for industrial processes so far – I’m confident they will find a way.
But as we move further into a carbon-constrained economy there are pointers I would give to the Australian managers and business owners who can’t see any way ahead except moving offshore. Firstly, don’t treat ‘green’ and ‘profitable’ as mutually antagonistic concepts. They will actually support one another if you do it properly.
Secondly, waste is waste, whether it’s carbon releasing into the air or it’s water effluent pouring down the drain. It costs you money to produce that waste, so as a financial exercise you should either be reducing it or re-using it, or both.
Finally, creating a culture of constant innovation is more important than putting a label on what you are doing. The creative energy you unleash when you tell a work force to find a cleaner, lower-cost, higher-quality way to do business, is the real dividend. The fact that you end up with a cleaner environment and more profit is almost a bonus.
Clinton Squires is the managing director of Interface Australia.