Meet the entrepreneur who turns Israel’s trash into someone’s dashboard
For about a decade now, Israel’s Environmental Protection Ministry has been working to improve the country’s recycling rates, in part by trying to educate and persuade the public to separate their waste and put it in the correct recycling bin.
These efforts have produced marginal results, but around 80% of the country’s municipal waste still ends up in landfills. Last year, these landfills nearly reached their approved capacities, prompting the ministry to draft an emergency expansion plan. To tackle Israel’s growing waste problem, the ministry has drawn up a strategy to reduce the total amount of waste sent to landfill to 20% by 2030. But the country faces the same uphill battle as Israel. it always had, because the plan always depends on the average population. properly sort waste. And that doesn’t happen enough.
Enter UBQ Materials, a Tel Aviv-based startup that converts household waste into an alternative plastic material – with no sorting required.
UBQ diverts waste destined for Israeli landfills to its plant in Kibbutz Tze’elim, about two hours south of Tel Aviv. There, metals and glass are separated and sent to traditional recyclers, while UBQ transforms the rest of the waste – food scraps, mixed plastics, cardboard, paper, all of it – into small thermoplastic pellets which are sold to customers. in a variety of industries, at a cost comparable to conventional fossil fuel-based plastics. The material, which the company also calls UBQ, short for ubiquitous, is used to make everything from hangers to fast food trays to automotive interiors.
Jack “Tato” Bigio co-founded the company in 2012, along with Yehuda Pearl, founder of hummus maker Sabra, and Rany Lev, a corporate lawyer who also happens to be a pilot for El Al Israel Airlines.
Our material is used in the same way as conventional plastics to create end products, by virtually every industry you can imagine.
Bigio grew up in Lima, on the Pacific coast of his native Peru, and spent much of his free time as a child swimming and playing in the ocean. After attending Colegio León Pinelo, the only Jewish school in Peru, he went to university in Israel, earning an MBA from the Hebrew University of Jerusalem. He fell in love with the country and has lived there ever since, raising a family and building a business career that took him to the top of Ampal-American Israel Corp., an investment holding company where he served as chairman and chief executive. management for four years. years. Then, in 2006, his passion for the natural world led him to embark on impact entrepreneurship. He co-founded Merhav Renewable Energies, which he ran for three years before turning to waste.
More than a decade later, UBQ Materials is entering a new phase: international expansion. The company completed its latest funding round in December, raising $170 million, most of it from TPG Rise, the global impact investing arm of private equity firm TPG. I spoke with Bigio, who is co-CEO of UBQ, about the company’s processes, its environmental impact, its business partners and its next direction. The following excerpt has been edited for length and clarity. For more from the interview, including more details on UBQ’s expansion plans and Bigio’s outlook on the future of the circular economy, tune in to the next episode of the GreenBiz 350 podcast.
CJ Clouse: Can you explain the process the company uses to convert waste into plastic? You start by sorting metals and glass, right?
Tato Bigio: Yes, these materials are valuable, especially metals, and highly recyclable. And they don’t really give our plastic any advantage because they’re too abrasive. So we’re taking out as many as we can and delivering them to recyclers, and that basically leaves us with all the other stuff, the stuff that nobody wants, that would have ended up in landfills breaking down and emitting methane, and that’s what we convert to UBQ.
Clouse: And how exactly does it happen?
Bigio: First of all, just to explain, UBQ does not recycle. The difference between converting and recycling is that when you recycle, you convert plastic to plastic, cardboard to cardboard, and paper to paper. But we take all of these materials, mixed with food scraps and garden waste, even dirty nappies, and turn it all into a seamless, cohesive material. Indeed, in general, organic matter – like a potato, cucumber, banana peel, chicken or fish – at the particle level is composed of very similar building blocks. Once we break the organic matter into particles, we have a common denominator which we use to bind the particles together and build the matrix which has thermoplastic characteristics.
So we use a very advanced chemical process, but luckily the process is done at low temperatures, so we don’t burn any of these materials. We have a very clean and efficient process that uses low levels of energy. If you consider that we use 200 degrees Centigrade heat, or about 380 degrees Fahrenheit, that’s way less than what the plastics industry uses to make polymers like polypropylene. For this, they use heat of 800 to 1,200 degrees centigrade. We use a sixth or a fifth.
Clouse: And you also use very little water, don’t you? Since we are talking about saving natural resources.
Bigio: Well, we don’t use water in the process. This is quite remarkable because the manufacturing process of materials, cardboard or paper, or in the recycling of plastic, consumes a lot of water. And our process doesn’t need it.
Clouse: It’s amazing. And what about the material you produce, who buys it? And can you give me some examples of product types made using UBQ?
Bigio: What we sell are these little pellets of UBQ material similar to how polypropylene, polyethylene and polystyrene plastics are sold in pellets to manufacturers. Our material is used in the same way as conventional plastics to create end products, by virtually every industry you can imagine. We’re in the automotive industry, and just to give examples here, one of the biggest automakers, Mercedes-Benz, uses UBQ material in a lot of the plastic parts of their cars, and their future cars will include more and more UBQ Hardware.
Then in the retail sector we have a company called Mainetti which is the largest manufacturer of plastic hangers in the world. In the construction sector, the UBQ material is used to make pipes, roofs, siding, floor panels; in logistics, they use it to make transport pallets, boxes, beams, etc., then there is also furniture. The only industry we don’t sell to yet is the food industry for contact applications, as we haven’t gone through an FDA approval process. It is a long process that we will do later. But we can use UBQ with applications close to food contact. For example, the world’s largest McDonald’s licensee, Arcos Dorados in Latin America, manufactures plastic trays using UBQ material and even marks the trays with UBQ in the corner. We are extremely happy about it.
Clouse: And what percentage of those finished products is made with UBQ? If I were to buy a hanger or a Mercedes-Benz, how much of my Mercedes’ dashboard would be UBQ?
Bigio: The more, the better. You can find products made with 20% UBQ; you can find products made with 60%, which is the majority, by the way – the majority uses more than 50%. And the more industry adapts and adopts new materials, the more industry also adapts its processes and equipment. New materials like UBQ are usually tested in small quantities, and then as the industry begins to evolve, they are scaled up more and more. It will always take time for manufacturers to adapt, but the more familiar and accustomed they become to the material, the more they buy.
Clouse: So if I understand correctly, theoretically you could do something 100% with UBQ. It’s just industry standards and practices, processes, machinery and all that need time to catch up.
Bigio: Yes exactly.
Clouse: You’ve attracted quite a bit of attention from investors, including a recent $170 million funding round led by TPG Rise. From what I understand, you are going to use this money to help finance an expansion. Tell me a bit about those plans and where you’re going next.
Bigio: Yes, these funds will be used to expand UBQ’s activities internationally, both in terms of factories and in terms of personnel; we will of course need more employees for the factories and for all the supporting business activities. And the idea is to go as fast as possible. The first installation is under construction in the south of the Netherlands. We plan to start operations in this plant at the end of 2022. And in parallel, we continue to develop new sites elsewhere in Europe and the United States.
It will always take time for manufacturers to adapt, but the more familiar and accustomed they become to the material, the more they buy.
Clouse: Obtaining financing is always one of the biggest challenges entrepreneurs face when starting a business. What was this experience for you?
Bigio: Over the past two years, there has been a massive shift in awareness about the importance of developing alternative materials, renewable energy and other clean technologies. And the financial world is also moving in the right direction. Now you see venture capital funds and equity funds that were generally very involved in the digital economy, artificial intelligence, software platforms and all that, understanding that there is a big opportunity in the sector clean energy and in the alternative materials sector. You see a lot of funding coming in.
Additionally, governments and NGOs are pushing the agenda and creating an environment where these alternative products will be better received. All of this creates a very attractive opportunity for entrepreneurs to enter this field and develop new materials, new processes and new technologies. The environment has really changed for the better. Ten years ago, when we created UBQ, things were really different. There was a certain appetite, but it was difficult. Today, in my opinion, there is ample room for entrepreneurs to enter this arena.