ECO-oh! recycles household residual plastics collected by more than 2 million Flemings. As a result, we currently process about 10% of the household residual plastics in Belgium.
Recycling is done as eco-efficiently as possible: we purify and reuse waste water from production on site, we use electricity from renewable sources as much as possible and we avoid adding toxic substances to our production process. We sell the raw materials obtained or use them on site to make sustainable products such as street furniture. In this way, we upcycle low-grade waste materials into high-grade design products.
Our street benches are particularly durable: the plastic is water- and frost-resistant and requires little maintenance. They have a minimum lifespan of 10 years, but we can reprocess the discarded products into raw material for new products.
Until now, we sold the benches to cities and towns, which themselves were responsible for their use and maintenance. With this project we would like to change our approach and develop a fully circular business model in which the user does not pay for the possession, but only for the seating comfort. To do this, we first want to investigate whether this rental model is financially, practically and commercially workable.
For our new rental formula, we are using our newest model of bench, the H bench, which is not only durable, but also modular. This means that we can make any repairs and adjustments within our service model even easier.
Our research shows that we can largely outsource the services (installation, maintenance, returns) of our circular model to custom companies, with us retaining the direction and coordination to watch over quality.
This new model will lead to closer and more frequent customer contacts and thus longer-lasting commercial relationships, but these will be more labor-intensive at the same time. A transition to service delivery is likely to require additional staff and resources internally.
On the basis of our internal, financial and market research, we eventually worked out sample agreements and offers for a number of pilot projects.
MOST IMPORTANT LESSONS LEARNED
The proposed plan to include demo projects in this research proved to be too ambitious. The time frame in which municipalities take decisions, especially for contracts of several years, appeared to be too long to evaluate a test project within this research project.
Although everyone does believe that sustainability and the use of recyclates is important, the actual purchasing criteria often remain price-driven. Also internally we feel that this fully circular model cannot yet compete with the more traditional sales model.
A major hurdle was the financing partner model, where our balance sheet structure would look like we were overloaded with debt. We also found no support on the part of the FPS Finance, and this solely because we are in unknown territory.
WHAT DOES THE FUTURE HOLD?
This project gave us all the space and opportunity to test a new model of service delivery within the existing public street furniture market. Although practically interesting opportunities were discovered for collaborations with custom companies, we encountered obstacles both commercially and financially.
It seems that sustainability is becoming an increasingly important aspect, yet we find that the actual purchasing criteria often remain price-driven. Also internally we feel that this fully circular model cannot yet compete with our classic sales model. We expect a fundamental shift in post consumer recycling in the coming 3 to 5 years in terms of technology, productivity and regulation. Perhaps it will then make sense to take up this exercise again. Nevertheless, we are pleased to have had the opportunity to conduct this highly informative study.