ASEAN’s garbage economy: Startups turn plastic waste into consumer goods

asia.nikkei.com (17 Februari, 2023)

The challenge for startups in the recycling sector is raising money at a time when investors are being held back by global macroeconomic uncertainties, rising interest rates and inflationary pressures. (Photo courtesy of The Incubation Network). ©2023 asia.nikkei.com (asia.nikkei.com)

SINGAPORE — As a child, Syukriyatun Niamah was encouraged by her father to explore the beauty of Indonesia through camping and climbing. What she remembers was pollution: plastic waste strewn about in the open.

While the most populous nation in the 10-member Association of Southeast Asian Nations possesses tourism gems like the idyllic resort island of Bali, discarded waste — a byproduct of the country’s rapid economic development — has taken the shine off its otherwise attractive landscapes. Plastic packaging peppers some of Indonesia’s rivers, at times clogging up waterways.

The scenes from her childhood motivated Niamah, now 28, to found Robries, a startup that aims to prevent plastic waste from reaching the ocean by transforming it into furniture and home accessories.

“Indonesia is a beautiful country, but there’s a lot of waste in the environment,” she told Nikkei Asia. “When I was in college, I saw the plastic waste problem getting bigger.”

The Indonesian entrepreneur studied product design before she founded the startup in 2018, and applied her skills to experimenting with recycling processes to convert plastic waste into useful products.

From tables and chairs to vases in vibrant colors, the results can be seen on the company’s website. A stool made wholly of recycled plastic sells online for 626,000 Indonesian rupiah ($41), while a set of four coasters goes for 150,000 rupiah.

“We are also looking to enter the global market,” Niamah said. “Soon we’ll take one of our products around Indonesia to educate more people and encourage them to join us in the zero-waste living movement.”

The young company, which is seeking a Series B funding round of $250,000, recycles four types of plastic waste: polypropylene, high density polyethylene, low density polyethylene and high-impact polystyrene.

“We are planning to expand our upcycling capacity with better systems and more efficient processes,” Niamah said. “By providing a new perspective about plastic waste, I hope to change people’s mindset, so people can rethink about their behavior on consumption.”

Plastic is still a particular problem in Southeast Asia, where takeout beverages from hot coffee to tea are often served in plastic bags, and some street vendors use hard-to-dispose-of packaging for takeout meals, although some have shifted to paper straws, wooden utensils and biodegradable containers.

The reliance on plastic has only grown more noticeable as the COVID-19 pandemic encouraged the use of food delivery services.

“Compared to the rest of the world, South and Southeast Asia use more single-use plastic due to its affordability and convenience,” said Prak Kodali, CEO and co-founder of Singapore-based pFibre, which uses marine biodegradable plant-based ingredients to make flexible packaging films that mimic the properties of plastic.

ASEAN eco-friendly businesses of this sort are seeking to promote a “circular economy.” They hope to reduce or eliminate waste generated by humans amid a rising urgency on the part of governments and companies in Asia to respond to climate change.

“We are trying to replace film plastics with a 100% marine biodegradable alternative that can decompose outside of an industrial facility, without releasing any harmful gas or toxins in the process,” said Kodali.

In Vietnam, ReForm Plastic operates franchises in Southeast Asia and beyond that process low-value plastics into construction materials and other products. Using compression molding techniques, it converts the plastics into boards that can serve as base materials for manufacturers to shape into consumer items, just as they would with wood, metal or cardboard.

Its co-founder, Kasia Weina, told Nikkei that the startup has converted over 500 tonnes of “low and no-value” plastic into products, and that it has the capacity to process up to 6,000 tonnes across eight factories. It aims to open 100 facilities around the world, employing over 2,500 formal and informal workers, while processing over 100,000 tonnes of plastic waste annually by 2030, he said.

“We are set up for rapid replication, with eight operating or installation phase facilities in Asia and Africa — two in Myanmar, two in Vietnam, one in Bangladesh, one in the Philippines, one in Ghana and one in Laos,” Weina said. “By becoming a one-stop shop for handling mismanaged waste, we can create a more positive environmental impact on a greater scale.”

Such efforts have global significance because plastic accounts for 80% of all debris in the world’s oceans. ASEAN, which generates tens of millions of tonnes of plastic waste a year, committed in 2021 to combat ocean debris.

“The volume of solid waste and marine debris generated across Southeast Asia is on the rise,” Varawut Silpa-archa, Thailand’s natural resources and environment minister, said in 2021. “Coupled with expanding urbanization and a growing consuming class, the long-term effects are only just emerging.”

The Circulate Initiative, a nonprofit organization tackling ocean plastic pollution in South and Southeast Asia, said 11 million tonnes of plastic waste enter the oceans every year, with the number projected to triple by 2040.

Because plastic can take hundreds of years to break down — and releases greenhouse gases along the way — eliminating plastic pollution in India and Indonesia alone by 2030 would eliminate 150 million tonnes of greenhouse gas emissions, Circulate Initiative said.

The challenge for startups in the sector is raising money at a time when investors are being held back by global macroeconomic uncertainties, rising interest rates and inflationary pressures.

Deal activity involving sustainable companies fell 24% in 2022 to $159.3 billion, a two-year low, according to a report in January by financial data provider Refinitiv.

However, dedicated funding efforts have supported the circular economy. The Incubation Network, which connects investors and young companies with a sustainability agenda, said it has helped startups raise $59 million in capital since it was created in 2019.

The same year, Investment management specialist Circulate Capital launched what was billed as the world’s first investment fund dedicated to startups and small enterprises that fight the ocean plastic menace.

The company’s investment partner for Asia, Caroline Wee, told Nikkei that it hoped to help viable startups secure the funding needed at different stages of their growth to achieve scale and profitability.

“Patient and risk-tolerant capital is needed to incubate and invest in early-stage businesses and projects that will become the future of waste management and recycling,” she said. “Startups in the plastic waste management and recycling sector continue to face challenges due to the lack of visibility.”

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