Waste not, want not
Yanto Soegiarto | March 14, 2011

Used plastic doesn’t scream millions to most, but former bank auditor Mohammad Baedowy has made his riches from rubbish, Yanto Soegiarto finds out how.

“I wanted to retire early, possibly before 40. I thought over and over about how to do that and finally I decided to get into the plastic recycling business. No expertise was needed to start the business,” Baedowy tells GlobeAsia at his plant in Bekasi.

Baedowy, 38, left his job as an auditor at the Royal Bank of Scotland (RBS) to pursue his entrepreneurial dream and says he has never regretted leaving his white-collar job behind. “It’s not about getting a fixed income but how to get more and continue earning an income,” he muses.

With Rp50 million in start-up capital, Baedowy began scavenging for plastic bottles en masse on the outskirts of Jakarta, including in the megalithic Bantar Gebang waste dump.
Despite raised eyebrows from his friends and family, Baedowy persevered and the hard work paid off.  Today his business is worth millions and pulls in Rp400 million a month.
An engineer by trade, Baedowy invented his own plastic cutter and crusher machines to recycle the mountains of collected plastic, which is sorted by material, color and chemical composition.

After the plastic is sorted, labels are scraped off and the material is thoroughly cleaned before it is fed through the plastic cutter machine and crunched into small chips or granules. “The plastic chips and granules are then exported to China,” explains Baedowy.
“Can you imagine how much plastic is thrown out in Indonesia considering it has a population of more than 230 million? Can you imagine how much plastic is used across the archipelago from Aceh to Papua? There is huge opportunity, but I can’t do it alone, I need partners,” he says.

Identifying the huge potential in the industry, Baedowy set out to create a network of recycling entrepreneurs.

He invited young people to work with him as plastic collectors in 80 locations across the country and started manufacturing his cutting machines to equip his partners and begin operating a chain of recycling plants.

Baedowy sells his plastic cutting machines, including after sales service, for Rp35-40 million each, depending on the capacity.

“My entrepreneurial partners have the freedom to sell their recycled plastic to the buyer offering the best price, but if not, then I buy their recycled plastic so they have guaranteed sales and earnings. The partnerships are flourishing. Aside from providing jobs, it also encourages young people to become entrepreneurs,” he says.

Each partner makes around Rp500 a kilogram from recycled plastic and each week they recycle around two tons of plastic, says the accountancy graduate. Two years ago Baedowy won the Dji Sam Soe Award for Entrepreneurship for his role in promoting small-scale businesses (SMEs).

Businessman Sandiaga Uno, who actively promotes SMEs in Indonesia, says Baedowy is a creative and impressive businessman. “He represents entrepreneurs in the 21st century and that is what this country needs. He is hard-working, honest and innovative,” he says.
Baedowy’s company, the CV Majestic Buana Group, also manufactures lakop, a part used in brooms and small plastic spatulas or glue spreaders made from recycled plastic oil canisters.

“If you see a locally made broom, the plastic part of the broom has an embossed MB trademark. That is made here and costs Rp500 a piece. I have a hard time meeting the increasing demand for them. There is hardly any stock left at my warehouse,” he says.
Baedowy’s plant also produces recycled polyethylene terephthalate plastic which is widely used to make polyester fibers, plastic rugs and plastic ropes.
The Bekasi plant, which employs more than 60 people, recycles 70 tons of plastic per week. The plant manufactures Baedowy’s cutter and crushing machines, some of which have been purchased by the Maritime Affairs and Fisheries Ministry to encourage budding entrepreneurs.

Expecting a visit from the vice president of Danone International to discuss the disposal of Aqua plastic bottles, Baedowy is both environmentally aware and business savvy.
“Plastic waste is a big problem for our nation but if we can manage it properly and use the right technology, recycled plastic can make money. I want to share this knowledge with others,” he says.

What’s the secret to being a great entrepreneur? “Fight against the current,” he answers without hesitation.

“Bob Sadino who started Kemfoods says that you have to be crazy with the right calculations. He has inspired me a lot to start my own business,” he says, adding that his wife Ririn Sari Yuniar has also played a big role.

“I have been successful because of the support of my wife. She makes me happy because the children are all well taken care of and that has made my life high-spirited,” he says.
As for early retirement, Baedowy says that if that ever happens he will hand over his business under an equity partnership scheme where he will retain a 51% stake and divide the rest between his brothers and employees. GA

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