ULY DALA BIODEGRADABLE BAGS: FINANCIAL AND MARKETING RESEARCH ANALYSES

Abstract

Global polyethylene production and widespread use poses a threat to the environmental situation in the world. Only in 2018, the global manufacturing of plastics exceeded the 3.59 billion tonnes threshold (Zhu and Wang, 2020). Kazakhstan is not an exception. According to National Bureau of Statistics, in 2021, Kazakh manufacturers produced over 54 thousand tons of polyethylene bags. It is estimated worldwide that by 2050, half of post-consumer waste of 26 billion tonnes in plastic will be abandoned in the open environment. Such an environmental disaster will create a perpetual waste management issue (Guglielmi, 2017). A social project Uly Dala LLP was established with the aim to manufacture a suitable alternative for polyethylene bags and eliminate the vast waste from consumer use. Despite the noble goal, the company faces several challenges, one of which is to increase the sales and profit of the company. Currently, Uly Dala LLP operate at negative profit. Established in March 2019, social project Uly Dala LLP (further Uly Dala) are manufacturers of ecological products made from biopolymers. The company manufactures biobags of various sizes and carrying capacities, garbage bags and disposable gloves for a wide range of uses, including domestic consumption. Biopolymers are produced from granulated organic raw materials (corn agricultural waste). The main advantage of the products made from biopolymers is their environmental friendliness, which leads to full decomposition into harmless components such as water, humus and carbon dioxide within 100 to 150 days. Since the beginning of its work, Uly dala has been actively cooperating with the Atameken National Chamber of Entrepreneurs, which provides support to start-up businessmen. Since the employees belong to the group with special needs, their wages are subsidized by the government. The company has also taken concessional lending and doesn't bear rental cost for the place where the manufacturing facilities are operated. One of the problems the company is trying to solve today is negative profits. Biodegradable bags are more expensive than plastic bags. There are not many companies that are motivated to spend more capital on being environmentally friendly. According to the CEO, the bulk of the product sales come from Ukraine and Russia.