Circular business model at Lagom Vietnam JSC

The name Lagom comes from the Swedish philosophy of life, which means not too much, not too little, just enough. By minimizing unnecessary needs, we significantly cut the amount of waste released into the environment, writes Tran Van Hieu, deputy director and co-founder of Lagom.

Lagom Vietnam Joint Stock Company was established in 2019 with its core business in education, raising public awareness of environmental issues, waste collection and recycling; and providing consulting services on the environment and sustainable development.

The name Lagom comes from the Swedish philosophy of life, which means not too much, not too little, just enough. This philosophy helps us live a balanced and happy life. By minimizing unnecessary needs, we also significantly cut the amount of waste released into the environment.

With this approach in our early days, we set up as a circular business model. During our journey, we have experienced both failures and achievements, and have step by step improved our model of suitable waste collection and recycling.

At Lagom, we have developed a model with a full range of components from (1) education, communication, strategy; (2) sortingat source; (3) collecting and transporting separately; (4) recycling and treating properly; and (5) commercializing recycled products.

Based on our experience, we see three factors needed for success in waste collection and treatment: (i) The model must be fully developed with five components. (ii) The components themselves must work well and effectively. (iii) The components must have a close and compatible relationship with each other.

Analyses can help us learn that unsuccessful waste collection and treatment projects in Vietnam are those not observing the above model; the components are incomplete, broken; they do not match well with each other and are inefficient.

A good example is a project named 3R in Hanoi, funded by theJapan International Cooperation Agency ( JICA). The project only focuses on components (1) and (2), and residents are guided toclassify household waste into three separate categories. But in component (3), the collectors still group them in one place, so residents realize their efforts are useless and have returned to their old ways. This collection method does not support component (4) and waste ends up at a landfill site for incineration.

Investment in infrastructure and applying advanced management model

With two waste sorting facilities in Hanoi and Ho Chi MinhCity, a system of machinery and equipment, transportation vehicles and a dedicated and well-trained workforce, we are confident and proactive in our business. We use our Platform Lagom Collect application to treat andmanage all collected statistics. This application ensures accuracy, clarity, and transparency while reducing management costs andminimizing paperwork, printing and reporting.

Collecting and recycling milk cartons: reviving dead trash

For this model, the first project we successfully implemented was segregating, collecting and recycling milk cartons at 1,000 schools in Hanoi. It is a combination of environmental protection and education.

With the support of the Hanoi People’s Committee, the Department of Education and Training, the Department of Natural Resources and Environment, and Tetra Pak Vietnam Company, we have trained teachers and students at 1,000 schools in 30 districtsand areas across Hanoi.

After use, milk cartons are deflated and neatly packed into collection bags. Every two weeks, we arrive at the schools to take them to our main warehouse for processing, pressing and transporting to the recycling plant. At the plant, milk cartons are separated into pulp and aluminum-plastic mixtures. The pulp then becomes paper, and the aluminum-plastic mixture is recycled into interior and exterior products like coat hangers, tables and chairs, and bricks.

The program has collected and recycled about 500 tons, equal to 50 million milk cartons. In addition to helping to reduce a large amount of waste, the program also enhances the role of teachers. This helps students develop a habit of sorting waste at source, a love for the environment, and a responsibility to protect the environment.

With the Hanoi success, we have expanded the program to many other localities. We have cooperated with the Packaging Recycling OrganizationVietnam (PRO Vietnam) to implement the program at 1,000 schools in Ho Chi Minh City. We also work with Tetra Pak Vietnam, Nestle Vietnam, and Canon Vietnam Co. Ltd. in Bac Ninh province, the International Union for Conservation of Nature (IUCN), and Vietnam’s TH Group to carry out the program in Vinh town, Nghe An province.

The program is being implemented in many residential communities, at supermarkets, offices, and industrial parks incollaboration with Coca Cola, Pepsi, Mega Market, Bee Mart, Canon, Shoppe, Capital Palace, Hanoi National University, the National Economics University, and FPT University. The program has drawn much attention and support from prestigious organizations such as UNESCO and the Embassy of Sweden.

Can-to-Can project: aluminum cans recycled infinitely

To promote and raise the responsibility of businesses, communities and each citizen regarding the role of natural resources and the environment towards sustainable development and implement the “Development of the circular local economy in Vietnam” scheme under Decision No. 687/QD-TTg dated June 7, 2022 of the Prime Minister, the Center for Communication of Natural Resources and Environment under the Ministry of Natural Resources and Environment, together with leading companies in producing and recycling used aluminum cans, namely TBC-BALL Vietnam Co., Ltd., UACJ Co., Ltd., Anglo Asia Co., Ltd., and Lagom Vietnam, are cooperating to carry out a closed recycling project of used aluminum cans.

Lagom Vietnam invests in facilities and human resources and uses management software to carry out guidance, classification and collection. We collect aluminum cans from places like restaurants, canteens, hotels, residential areas, and schools, then bring them to ourcenter. The next step is to sort them, then they are compacted into bales. These bales are sent to recycling plants to be turned into new standardized aluminum.

The A-to-Z aluminum can recycling project is in line with thedevelopment orientation of a green and circular economy, promoting economic restructuring in line with driving the growth model toward sustainable development, and contributing to realizing the National Green Growth Strategy for the 2021-2030 period, with a vision to2050.

The project will increase the recycling rate of standard aluminumcans in Vietnam, helping to save national resources and reducing environmental pollution, energy use, and carbon emissions, while making substantial contributions to Vietnam’s circular economy.

In addition, the project also helps raise public awareness about waste recycling and helps form the habit of sorting waste at source in accordance with regulations on domestic solid waste management o fthe Law on Environmental Protection. During the pilot phase, the project was implemented in Ho Chi Minh City to collect and recycle 620 tons of aluminum cans.

Recycle To Give Back Project: all recycled to give backto the community

We coordinate and support businesses to perform their community responsibility with the “Recycle to Give Back” program to connect all offices, buildings, factories, and workplacesin order to develop a green lifestyle, collect and recycle waste properly, while bringing value to the community.

The program is based on early support packages from businesses to collect and recycle all kinds of waste. Lagom’s early support units recycle waste generated from offices, workplaces, and buildings. Lagom provides the necessary items for partners to store their waste after sorting such as Lagom Bags, and schedules convenient collection times. All operations are conducted on the Lagom Collect platform.

The main types of waste that Lagom collects and recycles include milk cartons, paper, aluminum cans, PET bottles, and mixed plastic waste. With waste collected from partners, Lagom reclassifies and takes it to recycling facilities to create products that can be given back to the community, such as benches, tables and chairs for parks, publicareas, and schools in highland areas.

Difficulties facing Lagom and proposals to solve them

The common problem faced by both Lagom and its waste collection partners is value added tax (VAT). When we buy waste from residents and vendors, they don’t have a VAT invoice. But whenwe sell the waste to recycling businesses, we must issue a VAT invoice.

This reduces the purchasing competitiveness of formal firms and stimulates informal recycling. This makes tax revenue fall and causes increased unsafe recycling, which can cause environmental pollution.

We recommend relevant government agencies to issue supportpolicies such as a project to buy agricultural and aquatic products from farmers. As for types of low-value waste, recycling is not effective and isignored. We and some partners have worked on technical solutions that are initially feasible, but we do not have enough resources to develop a complete project.

We want government agencies to issue policies to support us so that we can improve our technology, build factories, and commercialize our products.