Going In Circles (The Good Kind)
From left to right: Gustavo Cardoso, Linda Oliveira, Leandro Santos, Lorraine Smith, Juliana Lopes and Carlos Ohde.
After a presentation I gave about the regenerative economy in São Paulo, Brazil last September I was approached by an enthusiastic gentlemen named Leandro Santos. He claimed to know of an example of a large company that had a lot of the regenerative characteristics I had just described, and he was keen to tell me all about it.
As the event was mostly attended by people from heavy industry, a cohort not typically known for its restorative impacts, I probably had a slightly skeptical look on my face. He pressed onwards: he knew it to be true because he is the general manager of this business.
Further, he declared that not only was this business zero waste, almost fully circular, and focused on net-positive social and environmental impacts, it was like an entire Brazilzinho. A mini Brazil, eh? I was intrigued. I accepted another cafezinho and settled in to hear the story of Flex — a global technology manufacturer — in Brazil. I’m glad I did.
Following our chat I was given an open invitation to visit their facilities in Sorocaba, about an hour outside of São Paulo, one of several experiences validating my logic of booking a few weeks in Brazil after my talk. Just like I did the last time I said “Yes!” to an ad hoc invitation to check out an innovative business near São Paulo, I recruited Juliana Lopes to join me on the adventure. She is the founder of Pulsarcom, a communications and systems-change consultancy (of which I recently became a proud associate — but that’s another story) and she humours my random invitations in response to random invitations.
One fine Thursday we headed out to Sorocaba. We were greeted by Leandro who might as well be Willy Wonka’s first cousin, such was his enthusiasm for the many experimental rooms he led us to throughout the day, and such was the magic of the things we saw. Except that this wasn’t a fictitious chocolate factory — it was an actual electronics factory.
IT Client Demands Led To Radical Innovation
Flex is a multinational manufacturer of electronic equipment. The Brazilian operation makes laptop computers, printers, cell phones and servers. These products are shipped to global clients including recognized IT industry leaders such as HP who have been increasing the social and environmental requirements of their suppliers.
In 2012, in response to demand from clients as well as an awareness that the regulatory environment and societal expectations were shifting, the executives in Sorocaba made a strategic pivot to transform waste into valuable new materials.
This turned into an incredible opportunity. They realized that while electronic waste is a serious issue nationally and globally, it is comprised of the same raw materials as those needed to make new products: plastic, aluminum, copper, and steel. From this simple shift in consciousness, the idea was born to create the facilities to transform waste into inputs for new products, and to design and make those new products on site.
Carlos Ohde, Director of Innovation, explains the facilities, including receiving waste electronics, disassembly, R&D, manufacturing, and distribution. Oh — and a store for employees to test new things out!
We were joined by several of Leandro’s staff who shared an impressive presentation describing the mini Brazil we found ourselves in as we enjoyed cafezinho and pão de queijo. We then journeyed along a sunny pathway on Flex’s campus to get to the disassembly zone — Sinctronics. Garbage in, Value out
The Sinctronics facility processes 300 tonnes of waste electronics each month, collected from around the region and converted into new materials through a combination of manual and automated processes. Some materials are sold back into the electronics supplier marketplace while others are converted within the Flex system, such that 97% of materials are recovered and returned to industrial value webs.
The piles of collected electronics being prepped for disassembly start out looking like giant, multitudinous versions of what most of us have in a neglected box or drawer and they end up creating valuable raw materials via 750 new formal jobs in a part of the industry that didn’t exist five years ago.
From the disassembly area we headed down the path to the manufacturing facility where new electronics are made. This looks like any other world class electronics manufacturer: a vast array of assembly lines and tables, workers in protective gear, brightly lit equipment, safety information prominently displayed, and an industrious workforce of men and women producing a wide array of sub-assemblies and finished products.
If we hadn’t just been 400m down the way seeing the busted up laptops, obsolete cell phones and miscellaneous cables being unpacked, disassembled, sorted and shredded, we never would have known that much of the product being built, packaged and shipped was garbage being hauled from the mega-city of São Paulo just days before. And the people receiving their new printers from HP don’t necessarily know this either.
“Mini-Brazil” offers the entire economy in one place The idea of repurposing materials sounds fun — maybe even idealistic — but the reality of electronics manufacturing requires a high degree of precision in every component. It’s not enough to have materials coming in and out. There is a tremendous amount of technical know-how, research and development that needs to be done at each step along the way.
Did I mention Brazilzinho?
Because the full circle of materials is right on site, personnel from the R&D Centre can observe, test and implement ideas in a far shorter span of time than other manufacturers who only have one piece of the value cycle in their midst. This is full-on Willy Wonka territory, only instead of nut-knocking squirrels, it’s folks in lab-coats tapping away at fancy screens hooked to 3-D printers.
The full corporate campus has an on-site workforce of 4,500 people who have access to Sinc Place, a local shop where they test-market products they are developing. Given their proximity to one of the largest consumer markets in the world (the metropolitan region of São Paulo currently boasts around 20 million inhabitants, and the city is the financial capital of South America) and the diversity of their employees, they can rapidly test finished products and gain valuable feedback from real customers in real use cases in real time.
Brazilzinho, indeed.
People Benefit From True Circularity
And the circular economy isn’t just about recycling or closing the loop on materials such as plastic or aluminum. It is about something far more comprehensive and systemic. The Ellen MacArthur Foundation — the global resource on the topic — defines the circular economy as one that:
designs out waste and pollution;
keeps products and materials in use;
regenerates natural systems.
It would be an exaggeration to say what we saw is 100% circular with that comprehensive definition in mind, yet the direction of travel is clear and the potential for even more positive impact is vast. As Carlos Ohde, Head of Innovation explained, the experience of Sinctronics at Flex demonstrates a scalable and viable business model of global relevance. They have conducted research in collaboration with policy developers and others that show if a zero-waste policy were adopted widely across Brazil, two million new jobs would be required to manage the diverted waste. This includes formal jobs with a range of skills in logistics, transportation, processing, R&D and product design.
And as Linda Oliveira, Marketing and Communications Coordinator noted, because the industry is so new, they are developing the solutions with unusual suspects:
“We are creating a new industry through collaboration, and we are doing this with people from diverse levels. It’s not only doctorates or researchers who have a base in this type of industry. All of the people in each part of the process have perspective that is important.”
Those new jobs, combined with the significant diversion of raw materials from landfill, have the potential to move the economy in meaningful ways towards regeneration.
Leandro Santos, General Manager of Flextronics in Brazil, explains the business model of a Fábrica which combines circular principles and social benefits.
The company continues to innovate beyond reclaiming old materials. For example, they recently launched a Fábrica (“the Factory”) which separates some of the collected products and remanufactures them, rather than disassembling them into new raw materials. They realized they could fill a niche of small business start-up needs by providing access to low-cost equipment rentals, reducing the expense of purchasing computers and cell phones and giving business owners more flexibility, a critical aspect of resilience for small businesses in the Brazilian context.
People often tell me I’m dreaming when I say I think the regenerative economy is not just possible, but it’s already taking shape. But having spent time with the good denizens of Flex’s Brazilzinho I know I’m not the one who’s dreaming. We need to open our minds and realize that if it’s going to happen, it’s not going to look like a vacation in an eco-village, it’s going to be part of our every day, completely normal lives.
Juliana Lopes (far left) recorded a podcast with our hosts, Linda Oliveira and Carlos Ohde, as part of Pulsarcom’s podcast series. The episode (in Portuguese) can be heard here.