DAVOS — For sheer perseverance, few match the exploits of Mike Mulcahy, a Cape Town-based CEO honoured at this year’s Circular Economy Awards in Davos. With accommodation in the town at a huge premium, Mulcahy was twice bussed from Zurich to Davos and back in less than 24 hours. That’s a challenge at the best of times, but after the heaviest snowfalls in a generation, the usual two and a half hour journey was doubled by avalanche-threatened Alpine roads and rail links. Mike seemed little the worse for wear when talking about his award-winning non-profit organisation GreenCape, which reclaims and converts landfill-headed waste back into useful products. This re-using of resources is the cornerstone of the Circular Economy, a concept now going mainstream after being promoted at WEF 2016 by yachtswoman turned activist Ellen MacArthur. – Alec Hogg
This podcast was made possible by Brightrock, the company that introduced the first ever needs-matched life insurance. I’m here in Davos with Mike Mulcahy who, seriously Mike, in coming here – it’s the 15th time I’ve come here to Davos, and I’ve never heard a story quite like yours so just take us through how you got here.
Sure so I think if we leave the transport arrangements behind, which has been pretty complicated, we are here representing my organisation, GreenCape. We were a runner-up…
No, I want to know about how you got here because that’s the interesting part. We’ll talk about GreenCape in a minute.
Sure so trains, planes, and automobiles.
When did you leave CT?
I left CT on Saturday morning. I got into Zurich on Sunday afternoon. I bussed out to Davos last night, a 4½ to 5-hour bus ride, out for the awards and then back into Zurich for another 3 hours and then back up today another 4 hours so lots of migrant labour.
There must have been big awards that you received, but GreenCape – it’s exciting what you’re doing. How did you get recognised for the award and what happened last night?
So last night was the Circular Economy Awards. It’s a program of the Young Leaders Partnership at WEF, and the Circular Economy is really looking at how you can reuse products and introduce lifecycle thinking manufacturing into big companies. We were recognised for a program that we’ve been running in CT for the last 4 years and really, it’s doing exactly that. It’s matching what one manufacturing company is throwing away to another manufacturing company whose using that as a primary input. That can be specifically waste but it can also be things like human capacity, boardrooms, reversed logistics, all of the suites of unutilised resources that can be used by another company. So I guess, some of the headline numbers in the last 4 years we’ve managed to divert something in the region of 30,000 tons of waste from landfill and that’s created close to R45m of direct cash benefits to the companies that we work with. So either that’s in a cost-saving, and you don’t have to buy raw material, or it’s a cost-saving where you don’t have to pay a waste management company to take that waste away. Someone else is fetching that from your manufacturing facility and taking it to a new manufacturing facility.
Ellen MacArthur, she started this whole Circular Economy story. I remember seeing here in Davos maybe 2 to 3 years ago so, it’s taken off?
Yes, it’s really exploding.
Have you met her?
I haven’t met Ellen but she had some of her representatives at the awards last night, but some of the thinking has been driven by companies with the desire to take back the product, after you’ve finished your use with it. So some of the big companies like Dell are willing to take back your computer or your laptop, or the asset, once you’ve finished with it and repurpose it and reuse those components that have come out of those pieces of assets.
Mike, it seems so obvious. That’s what they should have been doing all along. Why has it taken so long to catch on?
I think a large amount of it, certainly in the SA context, is it’s not core business for the manufacturers as you’ve paid a waste management company to truck away the stuff that you aren’t using, and it’s a very small item on your cost accounting but there’s such a big opportunity to reuse and recapture some of the value that sits in that waste. Our focus is really on economically viable opportunities. I think chatting to some of the guys last night, lots of the opportunity in North America and in Europe is driven by incentives or subsidies. A lot of the work that we’re doing down in CT is deliberately driven by economic viability, so we exclude stuff that would require a subsidy, or an incentive, or a change in legislation, and really just focus on matching existing commercially viable opportunities. There’s been a really big market for it over the last couple of years.
Be specific, what exactly do you pull out of the landfills and recycle?
So it ranges, everything from broken pallets to builder’s rubble, construction, and demolition waste, to very small but very cute examples where there’s a bakery that throws away egg yolks and there’s an ice cream manufacturer that needs egg yolks, so it’s basically matching the thrown away egg yolks with the ice cream manufacturer.
How did you find that, that’s an interesting story?
So we run workshops. We’ve got a team of about 5 or 6 bright, young engineers that are working on it and they spend a lot of time visiting companies and manufacturers to understand what it is that they’re throwing away. What’s the volumes? What’s the frequency? Is it dirty, or clean or sorted? That gets put into a pretty sophisticated piece of software that tries to match companies that have resources to companies that needs those resources. Then we put a little lens on it on economic viabilities. So for some things, transport logistics – the costs associated with it means that the opportunity is not realisable but we’re starting to get some really exciting numbers out of it. We’ve got 400 or 450 manufacturers that are part of this group. We’ve made in the region of 180 matches, so a 180 individual resource exchanges along the way. There’s a couple of big ones that we’re working on with the foundry that hasn’t quite come through yet but that will knock those numbers very high.
The foundry?
Yes, Atlantis foundries.
Presumably then that would be metal off-takes or who would want them? Help us through to understand this better.
In the foundry instance it’s actually around the foundry sand and there’s a little bit of work that we’re doing with the national government trying to get foundry sand classified as a different type of waste, so at the moment it’s hazardous but if you remove that classification there are a lot more processes that can effectively take that sand and use it immediately. So that’s a project that we’ve been working on for a couple of years now, and hoping to see it through in the next 6 months or a year.
Where do you come from? What’s your background?
I am an economist and a finance guy, but I’ve had a passion for green economy since I was a little boy and a lot of the thinking that we’re doing at GreenCape is broader than just waste, so we do a lot of work in energy, we do a lot of work in water, which is very topical in CT at the moment, and then waste management is kind of a third leg of the three infrastructure pieces that we look at. The frame is really all around trying to understand where the commercial viable opportunities are. So most of the first world talks about sustainability in terms of environmental, governance, and social. We try to put a big economic lens on that to make sure that what you’re doing doesn’t actually require an incentive or a subsidy. Again, in the SA case, we’ve seen huge growth in rooftop PV in municipalities, huge growth in alternative waste management. It’s the largest anaerobic digestion plant in Africa.
Say that again, what exactly is that?
So it’s a waste management plant that’s been built in Athlone. It’s a private sector investment of close to R500m, and it takes organic waste and turns it into gas, which is taken off by Afrox.
Effluent, when you go to the toilet that’s organic waste?
That’s organic waste but it’s also things like food waste or restaurant waste. There’s an opportunity in household waste but the level of separation isn’t massive so that’s the big breakthrough that that plant has is that its able to sort mixed household waste to pull the organic fraction out of that, and use that in the anaerobic digestion process.
Then turn it into gas?
Yes, they turn it into methane and CO2, both of which they’ve got off-take agreements for so those are pushed straight out into the private sector. So strictly speaking, it is waste to energy but that energy isn’t electricity. I think a lot of people think about waste energy as incineration so it’s waste to electricity but this is waste to gas and CO2.
These Circular Economy Awards how widely spread are they and how did they get to know about you?
I don’t really know the answer to that question but we’ve been trying to look outside of SA to see who else is involved in activities like this to see what we can learn and ultimately what we can share. We came across this Circular Program and reached out to be in touch with some of the organisers to try and see what we could learn from some of the international finalists and runners-up, and we were nominated and this year we’ve managed to come second in the public-sector category, which was very exciting.
How much have you learnt from the people you’ve met here?
It’s spectacular. Despite all of the difficult travelling, I think the time spent on the bus is probably the most valuable time. Getting to chat to some of the other finalists and runners-up. Certainly, there’s some extremely interesting work happening in India, and some extremely interesting work happening in the US around repurposing used computers or used electronic waste. Independently, as GreenCape we would identify electronic waste as a high priority focus area for the coming year because really there’s such a lot of value that can be unlocked in either repurposing or extracting some of the precious metals that exist in cell phones, tablets, computers, or TVs.
What about something really simple, these penlight batteries that one sees. I live in London now and you see in all of the retail outlets there’s a place to throw your penlight batteries. In SA, where I come from, I’ve never seen one of those. Is that one of the opportunities perhaps?
Yes, massively so, the golden opportunity in waste is if you can separate out the waste streams. So if you can get the organic fraction, or the plastics, or the metals into different streams it means that the treatment of those become much easier and much more commercially viable. So certainly we’ve seen a lot of opportunity in e-waste and e-waste recycling. At the moment, the legislation in SA doesn’t require any separation at homes so most of the municipal solid waste that comes through is pretty jumbled up and pretty mixed but as soon as people move towards a more conscientious recycling economy – there’s a ton of opportunities that start to emerge. Already in CT there are a range of neighbourhoods that have recycling that’s collected separately from the municipal waste. Just doing that creates a massive opportunity in the organic fraction of that waste.
Mike, to close off with. Coming from Johannesburg there are people who make a living out of picking up plastic. It looks like it’s a pretty tough job. I spoke to some of them through the years and they don’t get paid well for it. Are they able to plug into this more virtuous circle as well?
Certainly, trying to formalise some of the informal waste pickers is key to trying to make sure that what you’re doing is sustainable and can provide decent jobs and decent livelihoods for some of the waste pickers. I think there will always be a set of people that would try and make a living very informally from picking waste, but as you start to get more separation into the different fractions it’s much easier to start to formalise the guys that are doing the waste picking. There are a bunch of NGOs that are dotted around that we’ve tried to work with to understand exactly how many people are waste picking, and how many people are making a living out of it relative to making R50 or R60 once a week.
Any ideas on the numbers?
We have a very small sample size but the guys that we were working with had 150 waste pickers that would regularly drop something off, of which 4 of those 150 were every day pickers. So, there’s lots of guys that would pop in on a Thursday or on a Friday that want R50 or R100, but guys that effectively treat it as a 9 to 5 job that was a much smaller subset of those waste pickers.
How much would they earn in a month, those who do have it as a 9 to 5 job?
It varies quite dramatically, based on what the commodity prices are internationally, but anything from R600 to R1,000 a week, but that’s working pretty hard. Effectively, it’s physical labour. You’re selling your ability to push a trolley past as many houses as you can to extract the recyclables before the garbage truck comes by.
Right so it certainly isn’t an easy job at all. Mike Mulcahy, good to see you and I hope your next trip to Davos is a little easier.
Thanks very much, Alec.
This podcast was made possible Brightrock, the company that introduced the first ever needs-matched life insurance.
