BPCL - turning Asia's trash into gold

We turn plastic waste into recycled PET resin and other value-added products, while creating financial inclusion for waste pickers. 

BPCL is the first and only plastics recycling company in Bangladesh – a fast-developing country that is growing at 7% per year. Each year 80,000 tons of plastic bottles are thrown away. Waste collectors who occupy the lowest rung in society collect them to be sold in scrap shops. Eventually, this waste used to taken to China for recycling. But China has recently banned all raw plastic waste imports. The livelihoods of 200,000 collectors in Bangladesh are at stake, not to mention the looming environmental disaster of all this trash in the most densely-populated and climate change-vulnerable country in the world.  

Using a mix of Chinese and European tech adapted for the local market, we have set up and are operating a 800-ton per month plastics recycling plant  using trash bottles collected by female waste pickers as input and PET resin as output.  We work with 100 suppliers that collect from 30,000+ waste pickers, overwhelmingly women aged 18-30 who are urban migrants typically on their own. We have formal purchase agreements of our recycled products with 40+ customers in Bangladesh and China.  

On the commercial/processing side, we are embarking on an expansion plan to grow capacity by 2x in 2019 and by 4x by 2021, as plastics consumption grows in Bangladesh and demand for recycled plastic increases from China, where we have begun exports. At the same time, we are expanding into new verticals to produce raw materials for eco friendly fiber, which can be used by the $20B ready-made garment industry is Bangladesh, and food packaging.  

On the impact/collection side, we are systematically removing the middle men such as collectors and scrap yards who collect up to 60% of the value, and working to reach the waste pickers directly and pass the savings onto them. We are organizing them into cooperatives, linking them to digital wallets and eventually loans via banks so they can invest in improving their aggregation and logistics capabilities and sell directly to us.  We will then spin off the collection arm as a women-focused social business with a permanent off-take with the processing arm. We are also in talks to expand to Cambodia and other countries with a plastics glut thanks to the China's decision to stop importing raw plastic waste imports.

There have been donor-led projects in solid waste management but they focused on kitchen waste which is hard to process at scale due to the high moisture content. They also never focused on financial inclusion of waste pickers. The government itself does not have any kind of infrastructure/policies related to recycling. As for plastics, there is no other integrated plastics recycling venture here - one that collects raw plastic, sorts it and produces PET resin to be made into bottles and other products.

In developed markets, consumers pre-sort plastics, which are collected, transported and machine-sorted at the recycling plant. In Bangladesh, we had to invent the recycling value chain from scratch. We have hubs to aggregate plastic waste. But it comes with lots of non-PET and hazardous materials.  Some of the plastic comes caked with oil and other materials requiring heavy washing. Our trained sorters literally go through each bottle by hand. The A-grade waste is fed through the automated sorting machine. Together, the human-machine combination achieves 99.99% accuracy, which is important for purity. This does not exist anywhere else.

We are focused on commercial breakeven of our downstream PET resin production which we will achieve by summer ‘18. We are embarking on an expansion plan to grow capacity by 2x in 2019.  We are dramatically expanding our exports to China which used to import raw plastic waste but now want recycled plastic. We will also go into new verticals like polyester and food packaging. In the upstream collection side, we are actively exploring the feasibility of cutting out the middle men and working directly through waste pickers via cooperatives, and getting them access to finance via digital wallets.

-triple the number of collection hubs to 10, so waste pickers can sell directly to hubs instead of middle men  

-work with waste pickers' cooperatives to onboard collectors onto mobile money platforms

-spin off the collection arm as an impact business with partners like BRAC (the largest NGO in the world) and JICA  

-grow the business 4x by 2021

-open up a 2nd factory in Chittagong

-reverse takeover a listed Dhaka Stock Exchange (DSE) company and sell shares in Dhaka and China

-sign up partners in Cambodia and other SE Asian countries to source raw plastic from them

Customers:

Bottling/packaging companies save money on their plastic raw materials. Beverage producer, yarn manufacturers and food packaging companies can reduce BDT 150 million from their raw materials cost and at least 3 months lead time of procuring the raw materials by purchasing the raw materials locally instead of importing them. After a few successful clients, more and more bottlers are coming to us. We also attend various domestic and international trade shows including recent ones in China where we were the keynote.

Beneficiaries (waste pickers) -

Word of mouth, and partnerships with various cooperatives that represent them

Suppliers - We currently work with 80 suppliers collect from 20,000+ waste pickers, overwhelmingly women aged 18-30.

Employees - We train unskilled low-income women below 40 to become world-class expert sorters of plastics. Our product quality is routinely praised by international partners and clients as being some of the best in the world in terms of purity, thanks to a mix of hand- and machine-sorting. 

This year, we will work with 30,000+ waste pickers and their families, or 120,000 people. 

Khadem Mahmud Yusuf, CEO (BS & MS in Electrical Engineering) with 23 years experience working in US and Bangladesh.

Seemab Faheem: COO (BS in Chemical Engineering & MBA) with 35 years of experience working in Manufacturing and Gas transmission sector

Solaiman Haniffa, CFO (ICMA) with 16 years experience working in Sri Lanka, Dubai and Bangladesh.

Lutfor Rahman, Factory Manager (BS in Electrical Engineering) has 15+ years of experience in Manufacturing and Factory

We buy raw plastic from waste aggregators from their shops and waste pickers through our hubs. The price of raw plastic is depressed right now because China would to take the bulk of it as imports, which they have now banned.  The price for raw materials will not go higher for at least a few years' because we are the only player in the market at the moment, and it would take another company several years to get a plant up and running. We take the raw plastic and turn it into PET resin which can then be purchased by bottlers/food companies for use as bottles and trays. We are looking into value addition by turning PET resin into recycled fiber (for use in sportswear for the ready-made garment export sector in Bangladesh) and other products, which will increase our margins. 

We want to learn from an impact-oriented institution like MIT and Solve on how to engage our waste picker population, ensure their financial inclusion and better analysing and communicating our impact, both from an environmental and inclusivity standpoint.  Solve can also help us connect with technology partners to develop value additive products from our PET resin, and potential customers in the US. We would love to incorporate more IOT and automation into our supply chain. Finally, Solve can connect us to impact investors eager to support a circular economy in one of the fastest growing markets in Asia.

Our primary barriers to scale are product, supply and finance. We need technical help in product development to move into higher margin, value additive products like plastic food/pharma packaging/containers and eco fiber. We need mentorship from logistics experts, to ensure a reliable supply of quality raw materials that are sorted correctly when there is no centralized waste collection infrastructure we can use.  Finance is tough, as we need funds in the tens of millions to capture the market, which does not exist in the nascent cleantech sector in Bangladesh. We need access to foreign impact investors.