Entrepreneurs: The Michelangelo of recyclers

This article first appeared in Enterprise, The Edge Malaysia Weekly, on December 31, 2018 - January 06, 2019.
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Seah Kian Hoe, founder and CEO of Heng Hiap Industries Sdn Bhd, was one of the first in the country to recognise the value of what others considered mere garbage. The son of a karung guni (rag-and-bone man), he used the knowledge he had acquired while pursuing a degree in mechanical engineering to considerably up the recycling game in Malaysia.

Heng Hiap Industries is basically an advanced recycling and manufacturing company. It converts plastic waste into various types of resins, which are then upcycled into valuable products. The company manufactures the materials that go into biodegradable containers, automotive components, home appliances, indoor fire-retardant appliances and high-density polyethylene pipes.  

With a slew of patents under his belt, Seah is sitting pretty on a platinum (or rather plastic) mine, which is set to explode as the world recognises the value of his products and processes.  

“We have created a biodegradable protein-induced plastic with special proteins embedded in it that can ‘eat’ key compounds when discarded. This converts the plastic waste into harmless water vapour and carbon dioxide. As for the more cutting-edge plastics being used in wearable technologies, we are currently in the R&D phase,” he says.

Simply put, Seah leverages the concept of the circular economy to turn plastic waste — a toxic environmental hazard — into high-tech, high quality and biodegradable components. The circular economy refers to a production and consumption model where the waste products from one production cycle become the raw materials for another.

This is to minimise the consumption of finite resources such as timber, petroleum and rare earth materials. The circular economy, or turning waste into wealth, has been identified as a US$4.5 trillion opportunity. As one of the earliest entrepreneurs in the game, Seah is in a position to do very well.

Founded in 2002, Heng Hiap Industries takes in roughly 4,000 tonnes of above-ground plastic waste a month. “Above-ground plastics are collected in a controlled and systematic manner. They are initially disposed of with great care and right at the point of disposal, there are clear methods of separating and cleaning the plastics. This ensures that they are not exposed to soil, moisture or sunlight, all of which would reduce the effectiveness in the latter stages of upcycling,” Seah tells Enterprise.

On the other hand, below-ground plastic waste has been contaminated by sediment after being left out in the elements. This significantly reduces the upcycling yield that could have otherwise been achieved. “There is also a much higher environmental cost (greater electricity, water and heating demands) associated with trying to upcycle below-ground plastic waste,” he says.

Seah’s Johor-based factory possesses the technology and expertise to break down the plastic waste via three distinct processes. “We are able to break the plastics down into raw materials by mechanical, thermal or chemical processes. From any of these processes, we are able to yield very high-grade raw materials, biodiesels and other forms of renewable energy. Our processes are highly efficient. So, the commercial value from the upcycling process is very great and there is very little contamination. We are also fully compliant with local environmental laws,” he says.

“In fact, by the time we are done, the plastic waste is effectively air. There is a measure of water, gases and various chemicals. From here, the components can be upcycled into resources such as biodiesels, hydrocarbon gases or industrial gases.”

A man of singular vision and humble beginnings, Seah served on the frontlines of recycling even as a young boy. His school holidays were spent following his father in the old family truck, collecting recyclable scrap from house to house. There was nothing glamorous about the job. It was a deeply humbling vocation, being exposed to the daily heat, dust and traffic, all while spending one’s holiday surrounded by other people’s refuse.

The countless journeys and thousands of hours spent collecting scrap left an obvious impression on Seah. But it was his parents’ stark advice that left the biggest (and most profitable) impact. “My parents worked hard so that we would never have to be in this business. My father did not want his children to follow in his footsteps. He feared the bad reputation that the recycling business would impose on us,” he says.

He honoured the first, if not the second, of his father’s wishes — winning the prestigious Fulbright scholarship and studying mechanical engineering. He immediately adapted his knowledge to bring order, prestige and technology to the recycling industry.

Although his parents had built a respectable metal and paper recycling operation by that time — one of the largest in Malaysia in fact — Seah was convinced there was even more to be done. He sought his parents’ blessing and in 2002, he started Heng Hiap Industries.


Rethink, don’t refuse

Seah supports the government’s move to reduce the country’s dependency on single use plastic. It issued a permanent ban on the import of plastic waste as of Oct 26 this year. Seah believes there is much the private sector can do to complement the government’s work. There are various other actions and processes that can be undertaken in addition to the ban.

“The government is rightly concerned about the environmental impact of single-use plastics. The problem, however, is that daily life would be very difficult without these plastics. Everything — from your toothpaste to food wrappers — is single-use plastics, even if they happen to be biodegradable,” says Seah.

He thinks the ban makes sense for now, but only because the country’s effective utilisation rate of plastic waste is very low. “From my own experience in the industry, I would say that we recycle just 20%  to 25% of our plastic waste. That is a real problem because we are losing out on a large amount of economic activity,” he explains.

He cites the example of Japan, which is able to recycle nearly 80% of its plastic waste.  “I would like industry players to adopt a more holistic approach to plastic waste. Let’s try to improve on the current plastic manufacturing and reclamation supply chain.”  In fact, Seah is already working with various retail brands, schools, and environmental NGOs to drive improvement in recycling management processes at a grassroots level.

Right now, the process starts with basic plastic material being produced by a manufacturer. The material then goes to a product designer and then to a brand owner, after which it goes to a plastics manufacturer for large-scale customisation and packaging. It then goes through the logistics supply chain and into retail stores, at which point the customer buys the product.

“Let’s think about adding a few processes to that supply chain. Consumers, social media personalities, and business leaders should encourage the addition of a responsible disposal stage, a responsible recycling process [at the point of collection by small local recyclers] and slightly broader grassroots-level community recycling activism. This could be a great initiative as the local populace would have a vested interest in keeping their immediate environment clean and sustainable,” says Seah.

By far the biggest challenge and biggest potential changemaker, however, is securing the buy-in from the scores of informal smallholders who make up a large portion of the recycling industry. Seah has struggled in this regard for a variety of reasons.

“Many of these small recycling businesses are conducted informally. To them, separating and storing the various types of plastics — and even distinguishing between above-ground and below-ground plastics — is a costly exercise,” he points out.

Seah has spent untold hours engaging with the smallholders, trying to encourage them to formalise their businesses and then adopt Heng Hiap’s own in-house recycling management standard.

The more recyclers adopt the standard, the more extensive the national recycling network becomes. This means end-stage recyclers such as Heng Hiap Industries are able to get the most possible above-ground plastics for upcycling. On the environmental front, this also reduces the amount of below-ground plastics that get lost to landfills and are no longer cost-effective to collect and upcycle.

Seah thinks a national standard of plastic reclamation — one that effectively maximises the amount of above-ground plastics while being cheap enough for adoption by small recycling businesses — is the long-term solution to Malaysia’s plastic waste woes. To this end, he believes the business community is capable of making these changes without relying on the government to make the first move. “I would like to get to a point in time when all of our plastic products are guilt-free,” he quips.