Seeking a solution to waste-management problems in his native India led entrepreneur Mani Vajipey to quit Silicon Valley and use technology and innovation to help tackle plastic waste – with award-winning recycling enterprise Banyan Nation the result. Phil Lattimore finds out more.
Mani Vajipey was working in Silicon Valley as a software engineer, helping to develop the latest iPhone technology, when he decided to set up Banyan Nation and return to India.
He established the plastic recycling enterprise in 2013 in Hyderabad, working as CEO alongside co-founder and COO Raj Madangopal, as a response to what he saw as a chronic problem with waste and squalor he experienced as he travelled through India, where he grew up. His idea was to use his expertise and know-how to develop an innovative real-world solution that could be scaled up, making a meaningful impact on the issue of waste plastic pollution in his home nation.
An experienced business and technology professional, Vajipey was able to apply his skills and knowledge gained from two MBAs from University of California Berkeley, Haas School of Business and Columbia Business School, and an MS degree in electrical engineering from the University of Delaware.
Vajipey recognised that India has a long-established, low-level, informal recycling culture, which has resulted in a plastic recycling rate twice that of other developing or developed economies. However, he could see the results were not being felt by society and in the reduction of plastic pollution, so he was determined to try to create a technology-based circular solution that would help transform the way India saw recycling and plastics.
Vajipey and Madangopal identified how a network of informal waste pickers – known as kabadiwallas, bhandiwallas and raddiwallas – work in cities such as Hyderabad and all over India, to collect, sort and sell plastic waste on to third parties that sell it on to recyclers, but with no real quality or safety controls in place.
Vajipey and Madangopal identified how a network of informal waste pickers – known as kabadiwallas, bhandiwallas and raddiwallas – work in cities such as Hyderabad and all over India, to collect, sort and sell plastic waste on to third parties that sell it on to recyclers, but with no real quality or safety controls in place.
Banyan Nation’s aim, therefore, was to establish a formal recycling system to ensure consistent quality and the ability to recycle materials that have entered the system more than once. Tapping into their technology background, the team initially developed an app and data intelligence platform that enabled them to map and locate the 1,500 stationary recyclers in Hyderabad. With this intelligence, they were able to identify and interact with them, training them how to segregate materials required to their specifications.
The company developed thermal and mechanical testing techniques to produce high-quality recyclate that ‘rivals virgin plastic’, which can then be made into more recyclable products. Banyan Nation has also invested in a state-of-the-art proprietary washing system that uses an environmentally friendly cleaning process with water recovery, recycling and management technology to ensure it uses good-quality water for the process, almost 100 per cent of which is recovered and reused.
In 2018, Banyan Nation was a winner at the Circulars Awards at the World Economic Forum in Davos. Its customers currently include brands such as Unilever, Reckitt Benckiser and Tata Motors.
Circular (C): What was the background to your move to introduce innovation into India’s recycling market?
Mani Vajipey (MV): Recycling activities in India are driven by market forces that are informal, illegal and partly invisible. Millions of rack-pickers today scavenge the street-corner bins and landfills for valuable material that they then sell to the kabadiwallas, who sell to the back-end aggregators, who then finally sell to the recyclers. The goal of such an industry is to recover the materials at the lowest possible cost – and at any cost.
Plastics are perhaps the most versatile invention of our time, but its single-use nature means it has become an ecological and environmental poison. Banyan Nation aims to leverage mobile technology and innovation to help solve the biggest problem of our times – plastic pollution – and the impact that has on citizens.
C: What motivated you to create Banyan Nation?
MV: As an engineer, I want to understand problems thoroughly before looking for a solution, which can then sometimes present itself. Waste management, particularly in emerging and developing countries, and mismanagement of waste leading it into ecosystems and the environment, are major issues. Having grown up and travelled in India, looking at the problems of waste mismanagement, it became clear to me that the incentives have been misaligned to solve the problems of waste and recycling, as it has, too, in North America and European countries.
In India, the model is different because most of the municipal authorities can’t afford organised waste management. It’s often left in dumps at the edge of cities. Instead, an informal economy of scavengers goes through this waste. And for every few hundred homes, there’s a guy – a kabadiwalla – who will collect material he can sell on for recycling, making a little cash by selling on to an aggregator. I thought, how can we create an integrative model, rather than a displacement model, that we can apply to waste to aggregate material, but also increase quality?
We set up an intelligence platform to map the kabadiwallas in Hyderabad and introduced a microfinance component in an app for aggregators to register and be paid for materials collected.
So, once we collected the materials, we needed to introduce engineering rigour to the separation and cleaning process. The kabadiwalla recyclers bite, bend and burn plastic to identify the resin and grade of the plastic. So, producers at the end of the value chain have previously had to rely on that sort of thing for identifying and sorting materials. Clearly, that’s not how we should be doing this.
If contaminants are not eliminated from the plastic materials, the recycled plastic will have those impurities in them, and will only be converted for low-value applications – they’re no use for fast moving consumer goods (FCMG) mainstream packaging and automotive industry products, for example. So, we built a state-of-the-art facility and introduced the technology to separate, segregate and clean materials properly.
C: What was the initial reaction to this approach to recycling?
MV: When we started, people just used to kick us out. We would tell FCMG companies, for example, what we did, and they would not be interested, or say the price was too high. They would suggest sorting out their issues with multi-layer laminates and suchlike, to make their waste problem go away. But I’d tell them, we can’t make the problem go away because you have got to design for recyclability.
But over the past two or three years, since we won the Circulars Award at the World Economic Forum in Davos, that has started to change. We showed that we could deliver on high quality and we could integrate informal recyclers. It took us time to convince them, sign contracts and raise money, so it’s been an arduous, sometimes painful, journey. But if we are not going to do it, who else is?
C: What are the main challenges you have had to face?
MV: We found that plastic manufacturing in India had issues because of the lack of enforcement and regulation on quality of plastic – a lot of basic manufactured products were made from all sorts of junk recycled plastic that were mixed and potentially unsafe. This was bought from the shadow economy, just because of the low price.
We had to face a huge challenge on price expectations. If you formalise recycling, pay minimum wages, optimise processes to address all the environmental pollution issues, pay taxes, the cost of high-quality recycled plastic would be close to – or higher than – that of virgin plastic. Also, where the price of virgin plastic is largely dependent on the fluctuating price of crude oil, and the marginal cost of production is low, recycled plastic has a higher fixed cost so can’t be ‘pegged’ to be a certain amount below the price of virgin plastic.
Manufacturers can buy ‘informal’, poor-quality plastic at such a low price, without regulation, so there is a huge disincentive to choose ‘formal’ recycled plastic, even if it is near-virgin quality. That is despite the social, environmental and economic damage this causes – in terms of substandard quality, entrenching the shadow economy, and working against the establishment of a viable high-quality, circular recycling industry.
The challenge then was to convince companies of the value of using high-quality recycled materials that we produced at a realistic price level for a sustainable business. After a tremendous amount of work by the team, L’Oreal and Tata Motors were willing to experiment with us. Fortunately, by around 2017-2018, the time had come for this idea – large companies were making pledges to use a greater proportion of recycled plastic in their product packaging and there was increasing concern surrounding ocean plastic pollution. And then we won the World Economic Forum Circulars Award in 2018. That got the ball rolling, and we were able to start scaling up our processes.
Since 2018-2019, we have developed products, got certified with Unilever and Tata Motors and were able to demonstrate what we could achieve in terms of recycled bottles and auto components. Eventually, we managed to get investment to build our plants. We opened our state-of-the-art plant in January 2020. Unilever then helped us out when the government shut down the facility as part of the Covid-19 lockdown in India, so we were able to continue production for them.
We are the only company in India that has successfully put 100 per cent post-consumer resins (PCR) models on the shelf for both Unilever and Reckitt Benckiser, and we now have a pipeline of customers – engine oil companies, top FMCG companies – lined up to do business with us.
C: How important is your data intelligence/mapping platform?
MV: Mapping is extremely crucial. First, you get a geospatial understanding of which area has what material, how many people there are, pricing and volume frequency. And it helps us to keep updated locally on issues such as seasonal weather that may prevent collection – we need to understand analytics to ensure supply of our raw materials. We also need to have an ethical supply chain and a traceable supply chain – that’s key.
On top of the map, we also have a trader platform that allows us to map and integrate all the informal recyclers, trade materials and create a database of every single kilo of material we have traded.
Our platform is used by other people as well – for example, non-profit organisations such as the Renew Oceans project (funded by the Alliance to End Plastic Waste) to divert plastic waste from the Ganges.
C: What are your targets for Banyan Nation?
MV: Over the next 12-18 months, we’re projecting to reach plant capacity, which would translate to having millions of bottles made from our recycled plastic on the market. Our vision is to make the use of recycled plastic the norm, not a novelty. Our goal is working with the entire FMCG industry and using recycled plastic for personal care, home care and fabric care products. We want to create that full circularity. There are more things we are driving in engineering innovation too. Ultimately, we want to expand well beyond what we are doing now. In three to five years, we want to be processing 36,000 tonnes per annum, and we’re looking at expanding within the South Asia and South East Asia regions.
The plastic waste problem can only be solved at scale, and only if the use of recycled plastic is going to become the norm. There are several relatively small-scale, niche recycling projects to make consumer goods from recovered plastics, which is great. These initiatives are important to build consumer awareness. But we’re not here to create a great story – we’re here to solve a real problem at scale.
C: What would you like to see change in a local and a global context?
MV: The immediate priority is that we have to bring in a policy that says a traceable, ethical, recycled plastic as a mainstream market commodity is an absolute necessity. And every year, along with their annual reporting, all companies must report the use of recycled plastic, with mechanisms to incentivise them to meet targets. Then, if demand for recycled plastic increases, prices increase and the market will grow. They have to awaken to a new normal, and the new normal is this. The moment you mandate 25/30/40 per cent has to be recycled plastic, suddenly, companies are forced to look at the waste as a resource and not as landfill stock.
- For details, visit www.banyannation.com and contact Vajipey on mvajipey@banyannation.com
This interview first featured in the Nov/Dec 2020 issue of Circular.
