The Edge SME Forum 2018: ‘It is time to build bridges’

This article first appeared in Enterprise, The Edge Malaysia Weekly, on July 16, 2018 - July 22, 2018.
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Following the presentations at The Edge SME Forum 2018, there were many comments and questions from the audience. The following are some questions asked at the event and submitted after the forum, and the answers provided the speakers.

 

Azim Pawanchik, innovation strategist at Alpha Catalyst Consulting Sdn Bhd

What if we were to create a non-profit or cooperative body to act as a centre for the circular economy focusing on research, learning and business opportunities? (Norliza)

Azim: I think that non-profit bodies or social enterprises can act as important catalysts for the circular economy to gather the various stakeholders, best practices and existing tools.

 They may also form a significant bridge linking corporations with the smaller players and general public. Another role that these organisations may take on is to connect the various stakeholders in the circular economy with global players.

 The Circular Economy Club, for example, is an international network of circular economy professionals from over 60 countries. Research focusing on capturing the financial impact around the circular economy and highlighting initiatives in Malaysia would of course be brilliant to embed the value of this economic model locally.

 

Pavithra Mohanraj, founder of Infinitive Research and Advisory

[If we look at] the Japan scenario, their toys are remade. We need industry players to provide these kinds of services. We do not see this, for example, at Parkson stores, at their toy or repair counter. Repairing is not an ideal circumstance. We should push the new government to be passionate about keeping the same toys for a whole generation rather than throwing them away and buying new toys tomorrow. (Ken)

Pavithra: I absolutely agree. I just want to point out that there is a start-up in India that rents out toys because children outgrow their toys within three to six months or a year. So, why should I buy new ones and then throw them away later when I, as a parent, can rent or lease them for a year for my child and return them later to the shop?

 

I think we know ‘why’ (of the circular economy) and we also know ‘how’. The issue is about willpower or rather the will to enforce what we know and how we can do it. A simple example would be plastic water bottles. Do we need to carry them everywhere and sell them? I think everyone can carry their own water bottles from home. Why are they doing that (buying new bottles)? Because it is commerce. The guy that keeps the job wants to have growth every year. So that is a simple, classic example. If we really want to do it, we have to take extreme measures to do so and actually ban certain ways that plastic is being used. (Wong)

Pavithra: Agreed. A lot of countries have taken such initiatives. My country, India, has claimed that it will ban all single-use plastic 2022. I have no idea how it will get there, but the ban is happening. However, as you said, we already know how to do it, but it is not that simple.

In an earlier discussion — if you think about it — if I have to buy or carry a bottle of water, is plastic better than aluminium or stainless steel? You may think the former is a better option, but if you do a lifecycle analysis — which is essentially taking a product and looking at its impact from when you are mining the materials, to making it, to the end of its life, we actually discover that plastic is better, which several studies have found. It is not an answer most of us like, but plastic is better even when it is a single-use item.

If it can be used in multiple cycles, then that is the answer, rather than replacing all the plastic in the world. That goes to show that the ‘how’ is not quite here and we are working on it. In terms of the will, yes, absolutely [we don’t have it yet]. But I come from the environmental activist side and was sort of booted out of a CEO’s office and told I should not be talking about caring for the environment. It has to make sense for businesses, otherwise, it will not happen. That is why I think the circular framework is brilliant. It is looking at everything holistically and then providing the solutions.

 

Dr David Gonsalvez, CEO and rector of the Malaysia Institute of Supply Chain Innovation

You take a practical view on the circular economy. At the same time, you acknowledge that businesses have to be profit-oriented. I think that if a product is given a lifetime warranty (that is, you can exchange it or replace it for a small fee, etc) it will have a positive impact. Do you think something like this would be feasible? Please comment. (Muniandy Karishnan)

Gonsalvez: Yes, definitely products that are given a lifetime warranty will have a positive impact on reducing “throw-aways”. As an example, a very successful (over 50 years in business) clothing company that uses this model is LL Bean — you can return anything that’s defective for a replacement even if it is several years old.

For plastic or glass bottle recycling, the small fee works very well. The state of Michigan in the US has had a 10 cent bottle or can return deposit since 1978. So if you buy a bottle or can of water, Coke, juice or beer, you pay 10 cents more than the actual price. When you return the empty bottle to the store, you get your 10 cents back. All stores selling the product must take back the empty bottle or can, so you don’t have to return it to the same store. Usually, the bigger stores use an automatic bottle or can collector while the smaller stores do it manually.

The distributor must then collect the empties from the store and reuse or recycle them. This mechanism has resulted in Michigan recycling 94% of plastic and glass bottles and aluminium cans, the highest of any state in the US. You never see a plastic bottle or aluminium can lying on the street or on a beach — everyone knows it is like a 10 cent coin, so children, homeless people, beggars or even people collecting for causes are very adept at returning bottles.

If we did this in Malaysia, the plastic or glass or aluminium bottle or can waste problem would disappear overnight. The 6% of deposits that are unclaimed is put towards other environmental actions.

 

Seah Kian Hoe, founder and CEO of Heng Hiap Industries Sdn Bhd

A local recycling facility recently rejected single-use plastics (for example, egg trays, single-use grocery plastic trays and containers) and asked us to throw them away as sampah (trash). As an established plastics recycling firm in Malaysia, what are your views and how would you tackle this issue? And are plastic straws too small to be recycled? (Lim Wei Siean)

Seah: It is common for neighbourhood recycling facilities to have limitations in terms of their recycling capabilities. So, it is important to upgrade the single neighbourhood operation to be a cluster of integrated recycling facilities that consist of mechanical, thermal and chemical recycling to enable a better or broader conversion of plastic scrap to valuable material or energy.

Straws are not too small to be recycled. They could be converted into excellent material and energy. The real challenge is responsible disposal. Some F&B companies are already designing packet drinks with an attached straw rather than as separate items.

 

How do we make it cost-effective for plastic recycling to be undertaken at scale when the processes that have been proven effective are proprietary and protected intellectual property? (Ling Yok)

Seah: I believe the shared economy is the answer. The time has come to build bridges between technology providers, recyclers, logistics  companies and other related stakeholders to enable a shared platform. Additionally, given the complexity in recycling these days, there is plenty of room for development in technology and innovation.

 

Chan Weng Hong, general manager of sales, products and marketing at Acer Sales and Services Sdn Bhd

I got a new computer because it is faster. My old computer is in really good condition and serves as a back-up device. What happens is, as more of the processing and storage goes to cloud, I do not have to possess the hardware. If I have an option to rent a computer for two days while mine is being repaired, if the hardware part is more exchangeable, that is how we will move towards a circular economy.

Another example is when my old router crashed, the router company just took back the old one and gave me a new one. There was no downtime per se, but that does not happen with computers despite the fact that we are moving most of the processing and storage into the cloud. Do you see companies such as Acer taking that up and acting on it? (Pavithra)

Chan: We solve this on multiple fronts. Number one, for companies, if you go for the leasing or rental model, we have a lot of partners that have enabled a lot of organisations. You do not need to own the device. You sign a lease or rental agreement and you can have the computers you want. One of the things the recycling company we work with does is provide rental services.

During the recent general election, the Election Commission rented 3,000 old computers that were deployed nationwide at polling centres. This can also be done organisations. You can do short-term leasing or lease them according to your own time frame. When you do this, the maintenance of the machines is not your responsibility. If they do not work, you stop paying for them. So, there is pressure on service providers to give you quality service.

We are doing a lot of education. We are the first company to work with Google to create Chromebooks, which is a web-based device. In developed nations, schools can set up a Bring Your Own Device (BYOD) programme because they have the money to do it. But in Malaysia, the devices in computer labs are shared all the students in a school. Acer works with educational institutions so that they have one Chromebook for every 12 students. The devices are shared among classrooms and students, who won’t be using the same device every time. But the beauty is that their data is in the cloud, regardless of which device they use.