Winner | Asian Digital Media Awards 2020

Malaysian reverse vending machine startup eyes scale to tackle plastic crisis

Though Covid has slowed their progress, the founders of reverse vending machine startup Klean say their model of generating revenue and raising environmental awareness from the circular economy of plastic is primed to take off.

Klean is one of Malaysia’s most ambitious startups seeking to disrupt the plastic waste sector. 

Finalists of sustainability innovation competition The Liveability Challenge in 2018, Klean is now looking to scale up its impact radius to the Pacific island of Fiji and beyond. 

Klean’s reverse vending machines can now be found in shopping malls and petrol stations around Kuala Lumpur, where customers are encouraged to recycle in return for discounts.  

People come from as far away as Cheras, dumping about 50-60 bottles in one go to get lower-priced shopping and fuel discounts. 

One unique thing about Klean’s machines is that they can tell the difference between the bottles, enabling a crucial first step in the circular economy for plastic — separation at source.

Datuk Mohamad Arif Abdullah, co-founder of Klean, tells Eco-Business that this bit of technology can complement existing corporate sustainability initiatives. Coca Cola’s pledge to recycle a used bottle for every one the company sells by 2030, for example, might be hard to track on a global scale. Klean’s machines can therefore provide useful information on the progress of sustainability initiatives. 

Prior to being finalists of The Liveability Challenge 2020, they were awarded a grant from the United Nations Capital Development Fund’s (UNDCF) Pacific Financial Inclusion Program. This fund is now being channelled towards rolling out machines in Fiji in partnership with FijiCare Insurance. The model links sustainability with healthcare and will provide people with macro healthcare insurance in exchange for recycling plastic. 

In this interview with Eco-Business, Klean’s founders, Abdullah and Dr Nick Boden, talk about the startup’s business model, upcoming collaborations for scaling up, and how the Covid-19 has reshaped their strategy.  

What are some upcoming projects Klean is working on? 

Our ongoing collaboration with Resorts World Genting [a casino and mall complex] allows theme park riders to get discounted or free rides in exchange for recycling bottles. 

We have also just signed a partnership with Simon Christopher, founder of the Blu Hope Initiative. Simon is a filmmaker and scuba diver aiming to make the Coral Triangle plastic-neutral by 2025. 

We are talking to him about getting Johor and Pahang to also be a part of this initiative, with a focus on the tourism islands. It will launch in the next three months.

PET (Polyethylene terephthalate, the plastic most commonly used to make bottles) is just one part of the problem. To tackle other types of plastics, we’re looking to introduce what we’re calling the dropbox concept. 

We will be taking an old shipping container and turning it into a reverse vending machine. This machine will allow you to recycle PET plastic bottles on one side, and on the other, you can redeem a Klean bag made out of recycled PET.  

The state of Selangor, where we are based, doesn’t have recyclable waste collection systems, and the government will have to spend hundreds of millions of dollars to create this infrastructure. 

So instead of doing that, our initiative will hopefully encourage consumers to take plastic out of the household waste, and transport it to central locations like [supermarket chain] Tesco when they do their shopping. 

How has the Covid-19 affected your plans? 

The space we’re in (waste management) hasn’t been a high priority for Covid relief efforts, and a lot of our plans have been put on hold, including outside of Malaysia.

What should be a core part of recovery business models has been treated as a non-essential CSR activity. We have yet to fully transition multinationals into looking at their waste problems as an essential part of their business. 

The lockdown situation has also slowed our activities. With our plans in Fiji, we now have to train the locals to operate our machines, which can be challenging to do over Zoom calls. 

Something that would have taken two weeks now takes six months, but I suppose tough times like these means we can really put our technology to the test. 

If we’re able to implement what we’re doing in a place like Fiji, which is miles away, we can learn a lot from the experience. 

What has been the hardest thing about scaling up your project? 

The uptake on the Malaysian government’s end has been quite slow, so we’ve had to redesign our business plan to make ourselves self-sufficient. 

We have transitioned into a display advertising model for our machines located at petrol stations and shopping centres. For any companies who want to invest in our machines, the returns will not just come from plastic but from selling advertisements. 

When we spoke to Shell (one of our retail partners) after the first lockdown, they were telling us that their sales of bottled water had skyrocketed, and that they were making more money from selling bottled water off the shelves of their convenience stores than they were from selling petrol. The vending machines also help Shell lure customers from rival petrol retailers.

Where do you see yourself in five years? 

In five years, the plastic problem is not going to have gone away. In fact, if you look at a lot of the data that’s out there, it’s gotten worse — and it’s inextricably linked to other social concerns like water supply and poverty. 

Malaysia, where we’re based, has had a massive water quality and supply issue. In the state of Selangor alone, we’ve had maybe 10 water cuts lasting three to four days in the last year alone. 

So people are obviously buying bottled water more and more, and as a result of that, their trust in the public water supply system is slowly being eroded. 

There exist many small-scale initiatives like turning bottles into football jerseys, but these merely scrape the surface of the problem, and that solution is not really scalable. 

People still have to buy other clothes and they can’t walk around naked, so you haven’t really solved the problem. But if you solve problems surrounding the water industry and give the public access to clean water, then you get to bypass the need for plastic bottles. 

This is why another thing we’re working on is buying very low-cost water purification systems that can sit in a school or village, for example, and turn that water into drinking water straight away. 

So, in five years’ time, we hope to have a vast network of machines — not just in Malaysia, but potentially in Singapore, Thailand, and elsewhere. We still are looking for new partners to come on board. 

This story is part of a series on finalists of The Liveability Challenge, an annual search for solutions backed by Temasek Foundation to make Southeast Asia’s cities cleaner, greener places to live and work. The launch of The Liveability Challenge 2021 will take place on 15 January.

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