After our first interview, we’ve caught up again with Prashaen Reddy, Partner at Kearney, to discuss about the circular economy concept and the study that Kearney has recently conducted on the topic. The discussion below includes:
- Definition of the Circular Economy
- Benefits to the Society
- Kearney Circular Economy Survey
Do enjoy and watch the video interview too.
TT: Good morning! Good afternoon everybody, it’s a pleasure to be to be here. I am Tony Tiyou, the founder and CEO of Renewables in Africa: Africa’s clean energy champion as I like to say. Today with me I have a gentleman who we’ve had a pleasure to talk to before. It’s good to see that he is back for part 2 of our conversation. This is Mr. Prashaen Reddy, working for Kearney which obviously is a reputable company. Very recently they did a very interesting piece of study. This is what we are going to be talking about here. Before we dive into that, Prashaen if you don’t mind me asking, because some people might not have yet seen the initial interview that we had. Would you mind introducing yourself and your company please?
PR: Thank you Tony and a pleasure to be with you and your viewers. It’s always good to talk to you. My name is Prashaen Reddy. I am a partner with Kearney as well as the Director of South Africa Energy Association with a large passion in energy in Africa. It’s a pleasure to be here. Kearney of course is a global management consulting firm focused across a variety of industries one of them being renewable energy and process industries. We do a lot of research and work in the space of energy and chemicals and mining and of course our recent research that you have referred to which is of course in the circular economy and the value it can add.
TT: That’s great. You just talked about the circular economy. That’s a term that we have heard a lot recently. Just for people listening, to make sure there is no ambiguity whatsoever, would it be possible for you to define by your own terms, what do you mean by circular economy?
PR: Good question Tony. Its not as complex as it may seem. In the end, as you know, the world is made up of production values chains; manufacturing, could be gas, chemicals etcetera. If you look at it we produce a lot of wastes out of our processes. We use products and throw them away. They end up in the oceans or waste dams or places that pollute our planet. A circular economy in part is about eliminating waste in its very simple state form, whatever resources we use in this world, it is about re-using, re-purposing and making sure that we don’t create waste out of those resources. In simple terms, “just eliminating waste. Re-using it in the production process across the variety of industries.”
TT: Okay! So, it’s about eliminating waste. When I see a cyclic economy, I can see something going round and round. So, when is it going out of the loop? That’s the question I am asking myself. Apart from eliuminating waste, is there any benefit that you can mention for businesses and also for the society? So that people can understand what it means for them because one of the things that we like to do at Renewable in Africa is to keep things in very simple terms so Mr. and Mrs. Everybody can see how it is applying to me on a daily basis. What are the benefits for business but also for society beyond illuminating waste? Or maybe you can elaborate more on that.
PR: Great question Tony. I think it’s always good to make things practical. From the business perspective there’s quite a number of advantages. First, there’s a rise of newer industries in terms of waste management and waste recycling, waste re-use and waste re-purposing. A clear example, if you will allow me is, one in the automotive industry where we are starting to see catalytic converters that normally use platinum precious metals in the processes of removing emissions of exhausts incurred. We starting to see recycling of cars. Once cars have been used or taken out of commission, we see the recycling of those materials and letting them be used. There’s a whole industry of extraction, re-purposing and re-using. There is a lot of opportunities for businesses into getting more into the Renewable Energy, Renewable Energy re-use waste management space. There are also a number of businesses that are new in the circular economy. There’s a whole new product development business models that are being created on how to deal with the circular economy.
TT: Excellent! I mentioned earlier that with your company Kearney that you mentioned, on global consultancy, you’ve done a survey looking at the scarcity of resources and that’s where obviously you connected that with the circular economy which you believe are quite essential. I am sure that piece of work is available and you can be able to tell us where to find it. I wanted to know what are the key takeaways form that survey?
PR: I think the survey dilated more than 150 businesses, companies and organizations on the circular economy. What was clear was that many of these companies have made circular economy part of their business strategy. So, its no longer about how do I figure out how to incorporate this into my business to become core part of my business strategy. We have also started to see that most circular leaders have increased revenues compared to their peers, so we are seeing that investing into the circular economy and re-using waste has a lot of benefits from the cost perspective. You do not have to re-extract most of these resources in terms of production. You can re-use these resources. We are seeing profitability. We are also starting to see consumers are interested in buying products where they can identify that they are coming from recycled, re-used materials and therefore also driving up revenues. We are starting to see better brand recognition for companies that are in the circular economies. Suddenly, the media consumers, governments, consumers are starting to recognize that there are businesses that are focused on the circular economy and they are getting better traction in the market that they are operating in because of the space they are operating in. We’ve started seeing customer loyalty because consumers believe that they are doing good to the generations that are yet to come and the planet and their children. We have also seen that those that are leaders in the space have actually invested up to 40% of their workforces into circular economy activities. That’s very interesting because its not a few people or few functions in the organization that are focused on it. It’s actually reaching a significant part of the core business works. So those are some of the very key findings I would say. But of course, there are many more.
TT: Where can we find this survey? Is it available for public consumption?
PR: Yes. And I hope that if you go toour website, look under sustainability which is one of our practice offerings and areas, you just need to look for the report on the leaders in the circular economy.
TT: Okay. I am sure people will take note of it. One of the key priorities of the continent especially in this era of covid, is employment. People want jobs. How does the circular economy create jobs for South African which is where you are currently based Prashaen or generally for Africans across the continent?
PR: Firstly, I think one of the advantages of circular economy is that it moves away from finite resource extraction. Africa and South Africa are very much resource extraction economy countries and if you are looking at it from that perspective, yes you might think that, wow, hang on, that would mean that many jobs are on the line because we are going to be looking at how we extract less because we are going to re-use and recycle more. But the reality is like I mentioned earlier, there are many more business model that will create jobs. So, it is really about looking for opportunities in growing these business areas in the re-use and re-cycle space. It is significant. Think about everything you consume in this world is to be re-used and re-purposed. So, every industry whether it is chemical or manufacturing, you name it, is starting to look on how to re-use and recycle these commodities. The reality is that there is a lot of business potential around these types of business models revolving around circular economy. However, the other option that is to be considered is what do we do with all the extracted materials we are currently using? Mining industries have started looking at how the extraction of minerals they have today can be used for new industries. With the likes of digital and consumer chips and more mobile devices with 5G on the go, we might start to see the use of electronics and more mobile devices in the continent than ever before. We will start to see how these kinds of precious metals will start to make themselves into these kinds of products as well as the renewable energy space which you are very familiar with Tony and your audience. We start of course with the rise of battery storage to make renewables competitive technology and in that space and we re-purpose the use of precious metals into industries that are growing and developing. The advantage is that these industries will start to look at how they ca maintain the circular economy and at the same time we are going to start to see a demand for resources soon in new industries that are starting to grow.
TT: Thanks for that Prashaen. Let me ask you the last question to wrap it up. It’s a bit of a chicky question because we know that waste is a big issue across the continent. I think you can just travel to the major cities, you know, Lagos, Nairobi, Johannesburg or Accra. Clearly, we have a big issue there. So, do you believe that Africa can become a no waste continent?
PR: It comes down to appreciation of our environment in the first place and also, I think if we start to understand the business models associated with waste better, you will start to find more people taking the opportunity to look at those wastes and go out and make money out of it. If there’s one thing, we have in this continent is a very entrepreneurial spirit. When you come to small medium enterprises, we are quite survey in that space and I would say give credit to us in that I believe if people do look at it carefully, there’s a lot of money to be made and a lot of business to be done in the space of waste management and if we can get those businesses up and running and create environments to support them, I honestly believe that waste would be dealt with. I think as consumers also start to appreciate the shift, on the continent, maybe it is not appreciated as it’s in the cases of Europe and Asia or parts of Asia. It is just a matter of time because we have become far more aware of the impact we have on our planet and what it means to our children and generations to come and I think that behavior shift will come. If not driven by consumers themselves, which will take time, then it will be driven through government policy through global policy that is shifting around climate change. People, businesses and governments start to think of it because even investors are not willing to put their money into organizations that are not starting to think around re-use environment. If you don’t do that then you are not going to get money to grow.
TT: Excellent. I can safely say that every time you come to this platform Prashaen, we are always learning allot. You are always giving us very good insight on the job that you are doing and I can say that definitely I will make sure that I will download your story to look at that much more closely. To our people watching us you want to go to www.africa.kearney.com. It’s one of the practices we are talking about that is looking at sustainability. With a bit of a click, I am sure you should be able to find out. If not, I am sure, we can always point them to the right direction. So Prashaen, I can definitely say that it is definitely not a waste to have you here for the second time. I am very much hoping that we are going to see you for the third time if I am lucky. Between now and then, I wish you a very good day and as usual good it’s been to see you.
PR: Thank you Tony and thank you to your viewers.
TT: Thank you.