You may have heard of smartphones, smart TVs and even smart homes, but not many would have heard of Smart Plastics – yet that is just what Johor Bahru based Heng Hiap Industries Sdn Bhd – a homegrown recycling company with markets in more than 40 countries – has come up with.
Smart plastic can be anything from a thin membrane on an egg tray that can reduce 90% of its surface bacteria count and electric conductive plastics to plastics that conduct electricity (normal plastic does not). They are made from plastic scrap and can be manufactured in just 60% of the time it takes to produce regular plastic.
Moreover these plastics are biodegradable. A protein-based substance in the Smart Plastic molecule allows bacteria to eat into it when it comes in contact with soil or high bacteria count. So the plastic breaks down like any dead plant and does not stick around to clog up land and waterways. At the same time, it is a step up from the currently used biodegradable bags, which are made from components such as potato starch and start to fall apart after production.
Mr Seah Kian Hoe is the founder of Heng Hiap Industries Sdn Bhd, and he runs this company since its establishment. He was born into a family of recyclers and when he was 10, he would accompany his father from house to house to collect metal scraps in a small truck. It was very much a family affair as they could not afford to hire anyone else – his mother was also a truck driver while his two brothers helped them wherever possible.
Recycling is perceived to be dirty and unglamorous, but where others saw scrap, his parents saw the opportunity to create value from waste and built a better future for their children. Growing up, they only asked two things of their children – that he studied hard, and eventually moved away from the world of recycling.
Over a period of two decades, his parents grew the family business into one of the largest metal and paper recycling operations in Malaysia, while encouraging Kian to pursue other opportunities with his life.
When Kian returned from pursuing his MBA in the US under a Fulbright scholarship, he saw an opportunity to create a plastics recycling business from scratch, with a focus on tightly integrating the fragmented supply chain and producing higher value plastics. After finally obtaining his parents blessing, he officially started Heng Hiap Industries in 2002.
Today, Heng Hiap Industries is a fully integrated recycler that converts plastic waste into customized resins with superior mechanical and chemical properties that we call “smart plastics”. They have greatly simplified the recycling process, and this had led to them being able to produce output that is far more consistent.
The bulk of his business is in “mechanical recycling”, where he produces resins out of recycled polypropylene (PP) plastics that are a substitute for virgin polymer and used in applications for construction, automotive and consumer electronics.
Because they have a great degree of control over their supply and recycling process, they are able to customize these smart plastics to be stronger than virgin polymer and have a higher melt flow – allowing them to be more consistent in output and produced quicker respectively.
Their mechanical recycling of smart plastics has been highly successful, and today HH supplies smart plastics directly to the UK, Germany, Netherlands, USA, Australia & Japan. They derive over 90% of revenue from this mechanical recycling.
With the development in leading edge of smart plastics, HHI has been awarded and recognized by both local and international organizations such as JCI Ten Outstanding Young Person of the World in the Environmental Leadership Category (2013), Chairman Award from US Society of Plastic Engineer in 2014 and invited by Mayor of Akron City, USA in June 2015.
Kian excels in transforming innovation into commercialization. He is good at marketing these products to a global network and is passionate in the value of second chances. Knowing that the evolution of green technology is fast paced, he uses innovation as the core means to produce smart plastic.
Looking at the recycling landscape, the existing plastic recycling supply chain is highly fragmented with different parties handling the six different components. This causes three major problems: too many unskilled workers involved, too much non-value adding logistics, and there is minimal or almost no communication across all six independent operators. So the cost goes up while quality goes down as you move across the value chain.
What Heng Hiap has done instead is integrated all six of these components across the value chain, creating a much more simpler, straightforward recycling process, therefore: reducing the headcount by 40%, reducing the amount of logistics involved by 60%, and establishing consistent internal standards that streamline processes across the entire chain.
By tightly integrating this value chain and controlling the inbound supply of plastic scrap, they have been able to create smart plastics that are more consistent, fully customizable, and of much higher quality.
Beyond Mechanical Recycling, which has been their main focus, they have been able to make exciting new developments in the areas of Thermal Recycling as well as Chemical Recycling using their by-products.
Kian feels that his smart plastics can be used to give the local industry the boost it needs. “If the companies compete on price, they will find it is not good way to go. So, they need to differentiate themselves in term of products. Smart plastics with all their special qualities, can be like a secret weapon.” He is starting to market to more local companies as he believe he can offer a niche material to the Malaysian market. Right now 90% of its products are sold overseas.
Despite Heng Hiap’s advantage, Seah Kian Hoe is not out to monopolize the industry. He thinks there is room for other players and invites them to get on board. “Come on board with us rather than try to copy what we are doing. We could create a movement here,” shares Mr Seah.