THE concept of a circular economy, which reuses, repairs and recycles, is an ideal one to strive for in sustainability. It is, however, far from the norm today.
But the Wijayas, an entrepreneurial Indonesian family who runs an industrial paper and logistics group, have been implementing a circular approach to their business for the last three decades.
In the hands of founder Hendriko Wijaya and his children, Patrick Hendrawan (31) and Cynthia Handriani (29), the Daya Selaras Group (DSG) has further cemented its drive towards sustainability, with investments in equipment, partnerships and more recently, even a climate tech hub. Germane to the group’s approach is a commitment to collaborate with partners, particularly in the “informal’’ waste sector populated by individual waste collectors.
DSG’s model sounds simple. It aids and provides logistics for the collection of wastepaper. This is recycled and manufactured into corrugated carton packaging for clients, particularly in the fast moving consumer goods sector. Wastepaper is then collected from users and channelled back into the loop.
DSG comprises three companies: Daur Ulang Selaras collects from and supports wastepaper aggregators – that is, individual waste collectors – providing them with working capital when needed. Cipta Kelola Selaras provides logistics and transport services with a fleet of 200 trucks. Daya Cipta Kemasindo operates three plants to manufacture corrugated carton and packaging.
Its approach has borne fruit in growth and benefits beyond the sum of the various moving parts. To date, it has collected an alphabet soup of certifications, such as the Forest Stewardship Council chain-of-custody certification. It is ranked B by the Ellen MacArthur Foundation’s “Circulytics” assessment, a data tool to enable companies to assess their circular economy performance.
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As supply chains globally deepen their commitment to sustainability, DSG may be on the cusp of even greater growth. This is because multinational corporations seek to ensure the downstream links in their supply chain are sustainable. DSG’s recycling capacity is currently around 48,000 tonnes of waste paper a year.
Cynthia, chief corporate officer of DSG, said: “Sustainability is natural in our industry. In a family business, it’s also very natural because you’re always thinking of long-term value creation and transgenerational succession. What we have been doing is the circular economy, but execution is key. We need to take it to the next level.’’
The siblings reckon that DSG’s circular model is unique in Indonesia, even in the area of industrial paper where recycling is an established process. Patrick, operations director of Daya Cipta Kemasindo, said: “I think not many paper mills are willing to work together and invest in collaborating with the informal sector. Cost is a very important factor.”
Patrick graduated from University of New South Wales in Australia with a degree in manufacturing engineering and management. He worked in contract manufacturing for healthcare products before returning to join the business in 2014. “I gained a good experience in how a factory should be run, and on quality and safety.”
Cynthia obtained a degree in professional accounting from Macquarie University in Sydney, completing her degree in less than three years. She joined DSG’s internal audit team after graduation. “My accounting background helped a lot in understanding the business aspects. It was only in 2019 that I found my passion for sustainability.”
The siblings’ paternal and maternal grandparents themselves ran separate industrial paper businesses in the 1960s, which have since closed. Their father, Hendriko, formed DSG in 1993 as a separate business as he sought to professionalise the management. DSG’s management is evenly balanced between family and non-family professionals.
Desire to help waste collectors who were left adrift when the legacy businesses of their grandparents closed was a big driver. Patrick said: “The collectors came to my father for support because it was their livelihood.”
Some of them had been working as collectors for four to five decades, and DSG took pains to gain their confidence.
“We’re able to buy a stable quantity from them, so they are happy to work with us. I think building trust is important; we give them a stable income,” he added.
Each collector gathers between five and 10 tonnes of wastepaper daily. DSG provides support in the form of pressing machines to compress the paper into bales, and trucks for transport. “We also help to provide working capital because for them, everything is in cash. Their working capital needs are very high,” said Cynthia.
DSG is expanding its sustainability efforts. It has installed solar panels, for instance, in two plants. It is also negotiating to purchase electric forklifts. “Our efforts have a long payback period. But we understand that when we decided to be sustainable, it’s for the long term and important for us.’’
For logistics, the company also worked with coders to develop a transport management system to optimise route efficiency for its trucks. This has helped to reduce both petrol consumption and the carbon footprint.
Said Cynthia: “The waste management business is a public good. But waste management startups are struggling to cover the cost of infrastructure, especially logistics. We support the startups, to help them recirculate the paper. Collaboration and partnerships are very important.”
Apart from corrugated carton packaging, the plants have also begun to manufacture corrugated carton wrap to help replace plastic bubble wrap.
In terms of wider initiatives, DSG has launched a climate tech hub, a joint effort with Ecoxyztem Venture Builder, a venture builder in the climate tech sector. The hub is operated by the ECO-S Coworking & Office Space, founded by Cynthia.
“The hardest part for climate tech startups is to gain scale. That’s where DSG can offer value. The hub has infrastructure and an existing network. You can jump into our playground and utilise our tools and resources. It brings down the cost of technology as well,” she said.
Patrick believes human capital is key to the company’s continued success. DSG has a total staff strength of around 2,500; with the majority employed by Daya Cipta Kemasindo. “We have quite a young workforce and we guide them in the right way of thinking to ensure the culture is positive. Strength in human capital gives us flexibility in whatever business opportunities we may want to go into.”
In keeping with this, the group has set up the DSG Campus at the manufacturing sites to train current and prospective employees. DSG Campus has also formed a partnership to support a local polytechnic in the West Java area.
The family is looking into establishing a foundation to support the education of children of its network of waste aggregators.
Covid-19 posed a disruption for operations. But efforts to look after staff welfare by distributing free vitamins, for instance, providing antigen tests when they became available, and investing in digitalisation, have borne fruit in a more cohesive culture.
“Fortunately, no one came down with severe Covid. People understand that we’re able to treat them well. I think it really showed that top management is solid and closely coordinating our efforts. People matter,’’ said Patrick.
The Wijayas’ commitment to give back is rooted in family values. “From our (paternal) grandparents we learned the importance of gratitude and giving back. And from our maternal side, we learned grit, resilience and the importance of teamwork,” says Cynthia.
Their paternal grandparents helped to build schools and hospitals, among others, in their home village in China. The maternal grandparents also helped to fund education for youths, including sending some to the US for studies.
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