“Our target is replacing cement”: The Ethiopian startup thinking big
Kubik promises to turn plastic waste into high quality affordable homes. We spoke to its CEO about dignity, safety, and thinking globally.
Most startups start by trying to solve a problem. Kubik – perhaps appropriately for its name – tries to solve four big ones at the same time. It promises to help rubbish pickers earn higher wages. To make use of some of the 380 million tons of plastic waste produced every year. To encourage construction companies to build more affordable homes faster. And to offer an alternative to ubiquitous and highly carbon-emitting cement. Though still a toddler in age, the Ethiopia-based company has world-conquering ambitions.
In the wake of Kubik winning “Startup of the Year” at the Global Startup Awards, African Arguments spoke to its CEO and co-founder Kidus Asfaw.
What problem is Kubik trying to solve? What gap in the market does it try to fill?
Climate change, plastic waste, and affordability of housing are among the biggest issues facing any government. Over 70% of us are going to be living in a city by 2050, and most people will not be able to afford a decent place to live. There are growing problems around unmanaged waste, and cities contribute the most to climate change. Additionally, real estate drives 40% of greenhouse gas emissions.
We’re trying to tackle all these problems by taking plastic waste and converting it into low-cost low-carbon building materials. My co-founder, Penda Marre, and I used to work at UNICEF where we partnered with our Ivory Coast office to turn plastic waste into bricks to make classrooms. We made over 300 using materials that are 40-50% cheaper than cement all while being almost five times less polluting.
So we said to ourselves: this is pretty cool, why aren’t the others doing it? We realised it has a lot to do with the business model and finding a way of scaling the technology. We have deficit of over 300 million housing units in the world, 100 million in Africa. We want to tackle this by giving real estate developers access to very low cost but high-quality materials that will incentivise them to make more affordable houses.
Talk me through the process of turning plastic waste into buildings.
What we’re making is adult-size Lego that can make walls for any building. We take plastic that is usually going into a dump site or that you find in your rivers. We separate it by the different plastic types and clean it to a point it’s safe. We then use varying proportions of those plastic types as a formula to make the material for these Lego blocks.
And then you sell these blocks to construction companies?
Yes. What we say to them is that we can ease the pain of costs and of building quickly with our product. It literally requires just nails and hammers to construct. Anyone can do it. You can hire low-skilled labour and you do not have to worry about quality being compromised.
What are the disadvantages of this technology?
There are two things we can’t do yet. You can’t make a multi-storey building using just our product. You can only make a single storey house or replace non-loadbearing elements like a partition wall. The second limitation is that, because these are Lego blocks, you can’t make a perfect circle. If a developer comes to us with a unique type of building structure, we might not be able to accommodate for it.
So the future buildings you envision are a mixture of Kubik products and traditional methods?
Yes, but our product will evolve. We’ve invested in engineering to solve these problems. We don’t want to cater to a niche market. We want to find a way of accommodating really nice building structures.
What’s Kubik’s five- or ten-year plan? What stage is it at now?
We sell directly to real estate developers who we see as the linchpin to really scaling up affordable housing. Today, we’re starting off with our first market in Ethiopia and will start full-scale production later this summer. We want to use this as a model for other markets. In the next five years, chances are you’ll see us in a few additional markets, most probably in sub-Saharan Africa.
The vision, however, is to get building materials manufacturers to also leverage this technology so it can scale globally. In 10-20 years, we don’t want Kubik factories all over the world but for building materials manufacturers to be using Kubik technology to cater to their own markets.
So the main thing that Kubik owns is the tech and intellectual property?
Absolutely, we want to be a technology company first and drive more research, development, and engineering into the challenge of converting waste into building materials. But this is a novel technology and there’s a lot to still be understood around waste and real estate. Being a manufacturer first allows us to have a better understanding of the supply chain of plastic waste and these markets.
Rubbish picking is notoriously backbreaking, poorly paid, hazardous work. What’s Kubik’s relationship with collectors?
There are tens of thousands of waste pickers that subsist on selling trash but who probably get less than a tenth the value of it because they’re selling to aggregators who make the majority of the profit. We’ve decided to give collectors direct market access to us to sell at market rate. We believe this is the right model because now you’re incentivising waste collectors to strengthen the supply chain. At the same time, you provide them with a very dignified pathway to economic empowerment.
How much can someone collecting waste for Kubik expect to be paid for a day’s work?
Currently, collectors make less than $1 a day. On average in Ethiopia, 1 kg of plastic will go for 20-30 cents of which the women doing the hard work get just 1-2 cents. By working with Kubik, you’re increasing their income four-fold, maybe even ten-fold.
Why not employ collectors directly, pay them more and provide decent working conditions, protective equipment, health cover?
The conscious decision Kubik took is to not be a recycling company. The value add we want to have is in expanding the market in waste and providing developers with low-cost materials. The moment we have to employ and manage the waste supply chain, we lose focus around investing in the technology.
Who will live in Kubik homes?
We want everyone to be in a Kubik home, which is no different in quality or aesthetics to cinder blocks, bricks, and cement. Having said that, we prioritise poor people. They’re the ones who have a higher need and are traditionally under-invested in. But in the future, why can’t a luxury condo be made with Kubik bricks? Most of the world’s infrastructure is made with cement and our target is replacing cement.
How safe are Kubik’s products? Plastics can be toxic and leach.
Absolutely. We started using this technology at UNICEF and one of our biggest concerns was safety: fire safety; toxicity from degradation and impacts that emit microplastics; and, of course, structural integrity. We’re proud our technology passes these tests. Also, one reason we decided to focus on walls is that they are very low impact surfaces so the chance they will leach microplastics is minimal. With paving blocks, which things fall on and cars drive on, there’s actually a negative environmental impact that can come from using our technology at the moment.
What are the key barriers Kubik faces?
Two things. The first is scalability. How quickly can we put a dent in the affordable housing market? Addis Ababa alone has about a 1.2 million housing deficit. We’re going to have capacity to build up to 5,000 affordable housing per year. That’s fairly small and why getting other building manufacturers involved is key. The second is around the supply chain. We want to be an ethical and empowering company first. Figuring out how we can optimise our supply chain of waste while staying ethical is an area we have to pay a lot of attention to.
What are the challenges around funding and where does Kubik’s come from?
As a startup, fundraising is always hard, but we’ve been fortunate to have investors that understand the value we’re adding. We’ll be making an announcement on the close of our seed round very soon.
Of the investment inflow into Africa last year, less than 10% was focused on housing, waste, or infrastructure startups. If we’re going to be serious about transforming African economies, we need to think about the challenges of an urbanising and young continent. I would like to see the investment landscape shift more towards these types of focuses; software solutions alone are not going to solve our major challenges.
Do you think there are unique challenges start-ups from Africa face?
Africa is at a very exciting time with startups. There’s a burgeoning ecosystem of founders and early-stage companies solving phenomenal problems. What’s always an obstacle is reaching out to investors or partners that can help them grow. So they end up staying very small or local. A 23-year-old kid in Addis having a startup idea will be trying to solve a challenge they see, but if they could think about global problems and opportunities that start in Addis, so many companies could scale. I would like to see that problem shift and I’m sure it will in the years to come. I’m very bullish about it.