In Malaysia, 2.97-kilo tonne of paper waste is sent to landfills daily. This could fill Petronas Twin Towers, the Malaysian landmark skyscrapers, in 45 days! This has resulted in more greenhouse gas emissions (GHG), pollution and scarcity of land to accommodate an ever-increasing demand for space for landfill construction.
There’s a new force in town that is founded by a group of enthusiastic packaging material experts, that aims to tackle global warming and environmental pollution by reintroducing residual paper liner from the label packaging industry back into the value chain as recovered cellulose pulp.
This will prevent the valuable paper liner residues from ending up in landfills and focuses on recovering the cellulose pulp as raw material, which meets the need of local paper manufacturers. Materials In Works (MIW) has gained acknowledgement from the United Nations in achieving the Sustainable Development Goals, such as SDG 9 (Industry, Innovation and Infrastructure), SDG 12 (Responsible Production and Consumption), and SDG 13 (Climate Action).
Smart Investor got in touch with John Ooi, Technical Director & Co-Founder of Materials In Works (M) Sdn Bhd to learn more about them and their mission.
Smart Investor: Could you provide an overview of Material In Works (MIW) and its mission in the ESG industry?
John Ooi: MIW executes several upcycling projects in the ASEAN region. With their innovative solution for paper liner wastes which aims to tackle major challenges of our time associated with landfills and greenhouse gases, the Malaysia-based start-up has gained acknowledgement from the United Nations in achieving the Sustainable Development Goals, such as SDG 9 (Industry, Innovation and Infrastructure), SDG 12 (Responsible Production and Consumption), and SDG 13 (Climate Action).
On top of that, MIW has followed the call from Ecothon, which is searching for entrepreneurs or startups that adopt SDG 12 aspects in their sustainable business model, reducing environmental impact and substitution of essential product ingredients hindering recycling into account. As a result, the start-up with a tech-based solution for paper liner wastes has been crowned as the Champion in Ecothon Malaysia 2021.
SI: What specific environmental, social, and governance challenges does your startup address?
JO: MIW addresses one of the 3 main pillars of ESG, Environmental.
MIW have an IP-backed treatment process that recovers cellulose back into raw material for paper manufacturers, it helps in diverting the valuable waste from ending up in landfill sites. This is mutually beneficial for the environment and the paper industry, as price and availability of raw material are key concerns for players.
By recovering 60% of paper liner wastes in Malaysia, MIW can save 54,600 Trees from being cut down, which is equivalent to offsetting 10,920t of CO2 emissions per year. As such, with the proprietary upcycling solution, MIW can reduce CO2 emissions by 79%, in comparison to conventional landfill disposal methods.
SI: How does your business model integrate sustainability and social responsibility?
JO: MIW adopts a sustainable business model whereby MIW’s core principle of Sustainable Consumption and Production (SCP) is to tackle climate change for the betterment of the 3Ps (People, Planet and Profit). The adoption involves decoupling economic growth from environmental degradations, increasing resource efficiency, and promoting sustainable lifestyles; do more and better with less – “Less is More”. In summary, with the involvement of SCP startups like MIW in the value chain, we catalyze business transformation, in which new products with lower environmental footprints are created for bigger profit, and the benefit would go to the consumers, as they can enjoy making sustainable choices during their purchase for an environmentally friendly product.
SI: Can you elaborate on the positive impact your startup aims to create in the ESG space?
JO: Here you go:
SI: What sets your startup apart from other players in the ESG industry?
JO: The label packaging industry is a mass market producing substantial paper liner waste. In Europe, it attracts many local recyclers / upcyclers to tackle the waste and generate profit from it. Among the recyclers / upcyclers the identical ones are: Reculiner, Cycle4green, Les Recyclades and they are only focused on Europe region. To date, there are no competitors present in the ASEAN region, and the wastes are handled mostly by conventional landfill disposers.
In ASEAN region, MIW position ourselves distinctively with proprietary upcycling technology and processes that produce high quality recovered cellulose pulp as a raw material for paper products manufacturers. The initiative is effectively diverting the valuable paper liner waste from ending up in landfills.
SI: How do you measure and track the ESG performance of your startup?
JO: At the start, the ESG data will be self-measured by MIW. This includes benchmarking with relevant industries, referring to ISO standards, etc. At a later stage, MIW will track and measure ESG performance with confidence via utilizing an independent 3rd party firm by effectively transforming ESG commitments and data into transparent reports for the stakeholders.
SI: What milestones have you achieved so far in terms of sustainability and social impact?
JO: In the year 2021, MIW won as the champion in Ecothon Malaysia SDG 12 Program organized by the Ministry of Entrepreneur Development and Cooperative, Korea Ministry of SME and Startup, ASEM SMEs Eco-Innovation Center (ASEIC), Hanns Seidel Foundation, Centre for Entrepreneur Development and Research (CEDAR).
Few more remarkable achievements made in year 2022:
- Top 10 in Youth Co: Lab Malaysia Cohort Program, co-created by the United Nations Development Programme (UNDP) and the Citi Foundation
- Top 5 in Environmental NGO Accelerator Programme, organized by Biji-biji Initiative and supported by Yayasan Hasanah
- Top 5 in MYStartup Pre-accelerator Programme Cohort 1, a national project initiated by the Ministry of Science, Technology and Innovation (MOSTI) and developed by Cradle Fund
- Best Regional Impact Startup in International ISC3 Innovation Challenge for an innovative solution to solving an issue that is particularly relevant to ASEAN region
SI: How much funds are you seeking to raise through this fundraising exercise in collaboration with Beyond4 Fund 1?
JO: RM2 million. The governance structure implemented by BEYOND4 ensures the funds are spent responsibly to give the most value to the investor. BEYOND4 Fund1 aims to invest in the top startups that have traversed this path and proven themselves. This ensures a deal pipeline of the best and brightest startups that have withstood the trials and tribulations over the previous 18 months from accelerator to seed funding to VC investment, thus increasing the probability of a better return on investments.
SI: What are your plans for utilising the funds raised through fundraising for business expansion?
JO: We are planning to raise RM 2,000,000 whereby 30% will be used for setting up our pilot plant at Johor Bahru, Johor while 18% on OPEX and factory rental, 7% for team hiring and employee welfare, 10% each on IP filling, License and Permit also for marketing expenditures. While the remaining 25% will be used as administration, which includes shared services and platform fees.
SI: How do you ensure transparency and accountability in your operations?
JO: MIW is aiming to secure the ISO standards for transparency and accountability purposes (ISO 9001, ISO 14001, etc.).
SI: Can you provide examples of partnerships or collaborations that have helped drive your startup’s growth?
JO: MIW is working with renown public research institutions and universities professionals in several projects that will bring greater value to the company’s growth
Universiti Sains Malaysia (USM)
– Piloting Upcycling Solution to Tackle on Label Packaging Waste, potentially to capture yearly volume of 3,600 tons of paper liner waste available in Malaysia which translates to MYR 5.0 Million worth of revenue
Universiti Teknologi Malaysia (UTM)
– Recovering Clean PET from Thermal Transfer Ribbon Packaging Waste which had received full payment of MYR 67 K from a Japanese MNC client to start a pre-pilot project (potential to grow into MYR 0.5 Million worth of revenue in a year)
– Recovering Calcium Carbonate (Calcite) from Paper Sludge Waste, a promotion on cradle-to-cradle service for paper products manufacturer
SI: How do you engage with stakeholders, including local communities and investors, in your ESG initiatives?
JO: Through MIW initiative, we ensure that all stakeholders in the ecosystem receive quality waste management service and solution products, most importantly helping them to achieve sustainability goals. The key activities are:
- Collect waste
- Pick up and handle the waste
- Upcycling process
- Create new materials as raw material
The benefits are:
- Label packaging stakeholders who are contributing substantial paper liner wastes to Malaysia’s landfill sites which resulted in more GHG emissions, pollution and scarcity of land to accommodate an ever-increasing demand for space for landfill construction.
- Local communities who is living near to the landfill site
- The betterment of the environment for our future generation
SI: What challenges do you anticipate in scaling your business while maintaining a strong ESG focus?
JO: The ESG is the core of our business, we do not find any challenges executing the focus once we trained our people well. We strongly believe implementing ESG principles can provide impactful growth, better retention, loyalty, and performance to our company.
SI: How do you see the future of the ESG industry and the role your startup will play in it?
JO: By participating in ESG principles, we believe it gave our organization credibility and a competitive advantage. Consumers are shaping the future of what brands have to offer, and they want a product with a positive impact. The journey to reduce waste that is going to landfills is one that requires cooperation from all parties, even manufacturing industries. Lately, more companies are inclined to incorporate the circular economy model into their business. MIW is one of the companies that can help. Through our upcycling process, MIW is helping in the reduction of waste that is headed to the landfills as well as being able to become a supplier of green raw materials. This raw material will then be used to create A4 copier paper, tissue paper, food packaging, and more.
SI: Can you share any success stories or case studies that demonstrate the effectiveness of your ESG solutions?
JO: Label packaging stakeholders (manufacturers and brand owners) demand for a solution that can repurpose their waste and state they want the organization to be 95% landfill free by 2025. MIW plays an important role in the value chain by demonstrating the capability to upcycle the paper liner wastes into valuable resources such as raw material – Recovered Cellulose Pulp which then can be used to make premium products such as tissue papers, A4 copier paper, cereal box and more.
SI: How do you approach risk management and address potential negative impacts associated with your operations?
JO: MIW has been able to differentiate itself by having our high-quality products processed by IP-backed upcycling technology. We are earning by charging waste collection fees to the label packaging stakeholders at RM 308/ton and via selling recovered cellulose pulp as a raw material at RM 1672/ton. The high-value lignin-free recovered cellulose pulp is expected to fit for making premium products such as speciality papers, tissues and food packaging. The company initiative is supported by universities and research institutions to examine and benchmark the recovered cellulose pulp against virgin pulp with scientifically proven data. The aspiration is to grow with our partners to bring forward green upcycling programs to their clients based on our industrial know-how in the region. Our proven model ensures that all stakeholders in the ecosystem receive quality waste management services and solution products, most importantly helping them to achieve sustainability goals. The key activities are:
- Collect waste
- Pick up and handle the waste
- Upcycling process
- Create new materials as raw material
With funds raised from ECF, 30% will be invested into setting up paper liner waste upcycling plant, MIW is scaling the proprietary technology developed in the lab into pre-industrial scale which will attract the early adopters on board by Q3 2023.
The goal for the ECF round is to prove the technology is scalable and reproducible to upcycle paper liner waste into recovered cellulose pulp. Then, it can be sold as a raw material to make into paper products. The pilot plant is meant to upcycle 125 to 280 tons paper liner waste in a month and achieve financially self-sustaining afterwards.
SI: What strategies do you have in place to attract and retain talent that aligns with your ESG values?
JO: The key members on board have a long term, close relationship with the founder of the company, Mr. Ooi. There will be a financial and non-financial incentive. Financial (monetary) incentives are payments or rewards that are given in exchange for achieving certain goals or targets inclusive of Incentive Stock Option. Non-financial incentives are non-monetary rewards, such as awards, privileges, or recognition.
SI: How do you incorporate diversity, equity, and inclusion into your startup’s practices and decision-making?
JO: MIW will uphold the principles of diversity, equity, and inclusion during our hiring processes. After the ECF round, the company will expand the team by hiring a label packaging industry sales veteran for daily account handling and stakeholder engagement. On the USM side, the company has Dr Leh, who is not only working as a technical advisor but also knows the key personnel (some of them are Dr. students) in the paper industry and the machine supplier herself.
SI: What are your long-term sustainability goals and how do you plan to achieve them?
JO: The company is upcycling the hard-to-recycle item, paper liner waste which currently 100% landfill into recovered cellulose pulp. In return, it brought positive impact towards the environment.
(Output based):
- Amount of recovered cellulose recovered and upcycled for commercial use in the last 12 months (e.g. 600 tons)
- Number of trees saved from being cutting down (One ton of paper liner is made by 13 trees)
- Amount of t of CO2-emission offset produced (One tree is absorbing average 200kg of carbon over its lifetime)
The company’s long-term goals are to remain financially sustainable in the beachhead market, followed by an expansion plan to the rest of ASEAN market which is broader than Malaysia, such as Indonesia and Thailand. The label packaging industry sales veteran will engage actively with the brand owners (such as Nestle and DHL) and label packaging stakeholders who already have footprint in the mentioned countries in ASEAN.
SI: How do you plan to leverage emerging technologies or innovation to further enhance your ESG offerings?
JO: The startup is working on fundraising to scale up its technology to a pilot scale, with a focus on label packaging stakeholders. They are also looking for collaboration opportunities with other paper product manufacturers such as tissues, food packaging, and speciality papers. MIW also works on further improving the paper liner treatment itself, e.g., by reclaiming the silicone used for the anti-adhesive coating on the paper liners. MIW operates mainly in the ASEAN region, with Malaysia as the beachhead market. MIW initiative is supported by industry experts, machinery suppliers and renowned Malaysian public universities. With their innovative solution for residual paper liner reducing the landfill and Green House Gases problems, MIW contributes to SDG 9 (Industry, Innovation and Infrastructure), SDG 12 (Responsible Production and Consumption), and SDG 13 (Climate Action).
SI: Lastly, what message would you like to convey to potential investors who are considering supporting your startup’s expansion?
JO: ‘Make A Positive Impact While Backing A Sustainable Mission’
MIW solution ♻️ repurposes paper liner waste into Recovered Cellulose Pulp, creating a valuable resource for paper product manufacturers while diverting waste from landfills.
Investing in MIW means supporting a sustainable business that benefits not only the label packaging stakeholders but also the local communities and the environment for future generations.
