To decarbonise the construction and building sector, which is associated with the highest CO2 footprint in the world, RecycleX developed the idea of innovative building materials using different waste streams. The company has already received acclaim for its work, winning the India-Australia Circular Economy Challenge (2021), SEEDS Low Carbon Technology Awards (2021) and the Youth Ecopreneur Award (2021) from the World Trade Organisation. Abhishek Chhazed, Co-Founder, RecycleX, discusses funding for the waste-to-wealth venture, the cost-to-profit ratio in using recycled plastic, multiple awards won by the firm, challenges involved in the sourcing of these sustainable materials, and more, in conversation with R SRINIVASAN. Excerpts: What was the inspiration behind RecycleX? As entrepreneurs, we always think of solving big problems to make big business as well as a big impact. The construction and building sector is associated with the highest CO2 footprint in the world. RecycleX was started with the idea to decarbonise the construction sector with innovative building materials using different waste streams that were available in abundance in India. Please share the RecycleX journey. In 2021, Recyclex was focused on the use of multi-layered plastic (MLP) to make bricks and pavers. Being from Bharuch, Gujarat, we identified a bigger problem of industrial waste from captive power plants. By deep diving into the space, we found there were already existing solutions like PPC cement, where flyash partially replaces virgin materials and other products that used flyash. But with 200 MT of fly ash produced each year, the problem was much bigger than the solution. After 12 months of R&D, we had a breakthrough and formulated a material eco-concrete or REX that eliminates cement usage and instead uses fly ash with alkaline binders. We started manufacturing bricks as the first product using the REX material. We have gone from 4,000 units each day in early 2022 to about 30,000 bricks each day in eight hours or 60,000 in two shifts currently. Annual production capacity is around 20 billion units of bricks. In the meantime, we started paver production for landscaping and are now engaged in R&D in the RMC space. Tell us about your innovative eco-concrete, which replaces cement with a mixture of steel and coal waste, sand, alkaline chemicals and aggregates. Each tonne of cement emits about 700 kg of CO2 during production and more during logistics. Concrete as a material has three fundamental ingredients: cement, sand and aggregate. When water is added, C-S-H gel is formed, which eventually forms into concrete. In eco-concrete or REX, we are eliminating cement. Eco-concrete is a perfect solution because it utilises the same machines, the same process and the result is exactly the same as traditional concrete. In addition, we are still trying to use other waste like C&D waste and bottom ash to manufacture products that have strength and physical performance comparative to the structural elements of concrete. This will further lower the CO2 footprint, maybe even pushing it to carbon neutral or negative. The idea is to scale REX up in terms of products and onboard manufacturers who want to adopt the technology. In terms of CO2 emissions, our Life Cycle Assessment (LCA) is ongoing and the results will be available in the next couple of months. Our data suggests that the material’s carbon footprint is 80 per cent lower. RecycleX was set up to reduce 1 per cent of the carbon footprint of cement in India, equivalent to around 30 MT (India’s annual cement production is nearly 400 MT). What has been the firm’s effect on the CO2 footprint? Each unit of ours offsets carbon emissions by replacing cement usage and recycling industrial waste. Till now, we have focused on product manufacturing ourselves but we are now joining hands in other geographies in India to scale our operations. To date, from our unit in Ankleshwar and Bharuch, we have sold over 4 million units and saved over 1,000 tonne of CO2. With our current R&D going on, our plans to offset GHG emissions go up exponentially. Each m3 of concrete uses 250-300 kg of cement; we are potentially looking at offsets in the same range in each m3. We plan to partner with big RMC units to promote REX material for flooring, road operations and other non-structural elements. How did funding come about for your waste-to-wealth venture? RecycleX is completely bootstrapped right now. The founders invested their own money for the research and trials at the start – about `1 million. Since then, we won multiple competitions that gave us the boost to scale production and have received a couple of grants from the Gujarat government. The state government helped us substantially with a `0.2 million grant at the very start. The number may see small but the government backed us with just an idea and a presentation. Once we showed results, we were given a bigger grant. The ecosystem helped us tremendously at each step. What is the company’s total turnover now? Our turnover last year was about Rs.12 million, with barely anything before that. What is the cost-to-profit ratio in using recycled plastic and construction waste for bricks, etc? Right now, recycled plastic products are not the priority. For gross margins on products like bricks and pavers, it is about 35 per cent at a price when the products are 10-15 per cent cheaper than traditional products. What were the challenges involved in this sector, in terms of operations as well as sourcing these sustainable materials? The biggest challenge was the manufacturing aspect of construction building materials. When we started with manual production and testing, we understood the intensity of operations needed to ensure the quality of the products. Sourcing materials is a one-time task with each client. We now have a hack that works every time and would recommend to each founder. The challenge is that each waste material is going to a landfill or already has an existing not so circular or green solution. But with existing vendors already tied up with industries and long-established relationships, it is difficult for a startup to enter their ecosystem. So, what we do is to use the hook of industries wanting to be sustainable and connect with their CEOs, MDs or Sustainability Heads on LinkedIn and explain the benefits to them. This way, we are eliminating the middle and lower management that is difficult to convince and already has long relationships with existing vendors. The sourcing of raw materials has been easy since this process. From the operational point of view, logistics is the biggest hassle as the idea is to keep the minimum cost of logistics. We have completely outsourced that for now to keep it under control. How has the business model of directly working with industries producing waste worked out? I guess that’s the best decision we took. Earlier, we were supplied the waste by existing vendors. Those vendors were paid money to lift the waste, make money from us and did zero value addition in the supply chain. By directly working with the industries, we lowered the cost of the waste, eventually making affordable products for our customers. Apart from that, in the new model we adopted, where we are partnering with waste producers to set up manufacturing facilities at their site, we are eliminating any logistics of the waste and have a long-term partnership with the industries. This way, they save on the cost of waste and potentially make money with us by selling the products manufactured. How much has the company spent on R&D and what is the current outlay on R&D? In the past three years, we have reinvested all the profits and additional money that came in via grants or competitions into R&D. The number would be north of Rs 3 million or even more. The current outlay is completely on using REX in road construction and RMC units. Other precast elements can easily be added to the current portfolio, but are not a priority. Which sustainability organisations have certified your products? Our products have been tested by government-certified laboratories and top-notch private labs in India that are ISO, BIS and NABL-certified. In terms of sustainability, our LCA is under process; it is being done by Abdul Latif Jameel Poverty Action Lab (J-PAL) from MIT. Once that is done, we will have an official third party certifying our process. Please share examples of projects where your products have been successfully used. We have completed several projects that have created an impact in both the social and environmental contexts. For example, we did a rural school and panchayat project with Ten Technip Energy using our pavers made from MLP plastic collected from the local village itself. We recycled more than 10 tonne of plastic and paved more than 10 km of land with our pavers. This project alone saved more than 10 tonne of CO2. Another example is working with a local developer building houses under the Awas Yojana. We helped build 200+ houses using our bricks and pavers. A total of 500,000 units were used, recycling more than 1 million kg of waste, saving tonnes of CO2. Any initiatives to promote the recycling or reuse of your products at the end of their lifecycle? The lifespan of our products is a minimum of 40-50 years. Their recycling will come under the C&D waste recycling facilities that are now popping up in each big city. The plan is to use their finished sand and aggregate in our products so even when our products enter their ecosystem, we would have already recycled tonnes of waste. What will be the size of the recycled building blocks market in affordable housing in 2025? The affordable housing space is looking at 20 million homes in the next three years. Considering that at least 50 per cent of the homes are likely to be built on land and not part of high rises, we expect it to be a potential billion-dollar sector. What products have been planned for the future? REX has been fully developed. So, it is just about figuring out the form factor and specific requirements for the product. Right now, the idea is to integrate the material with RMC units across India so we can expand our geography and enter the road construction and flooring markets. In terms of precast, we are looking into kerbstones and boundary walls.