when we were past books Around PelegasThe social enterprise prides itself not only on being an affordable LPG cylinder saving option, but also in its mission to hire B40 Malaysians and ex-convicts.
After 6 months, she found a way to add more value to her services. As of June 2021, customers who purchase LPG are enabled to donate 1-10 liters of used cooking oil to get a subsidy on their gas.
BeliGas Managing Director Suthan Mookaiah told the Vulcan Post that this has always been part of the business plan from the start.
“But because we were operating on a simple model when we started, we had to focus on building the main part of the business first, which was creating logistics and touch points across a wide geographic area, and then establishing relationships and trust in the local communities we serve.”
He believes BeliGas is now ready to go in and establish itself as a player in waste oil collection as well.
Addressing multiple customer weaknesses
From his personal point of view, customers nowadays are wiser, and work that can help them reduce their costs while taking on social responsibility will win their loyalty.
With this in mind, using your waste cooking oil donations to support gas prices makes sense. It’s a method that kills two birds with one stone: lowering the retail price of gas by RM0.80 per liter of donated oil, and helping users dispose and recycle waste oil properly.
Currently, BeliGas limits oil donation amounts to a maximum of 10 liters per customer at any time while they are figuring out the logistics of pickups.
Since they deliver gas to homes on bikes, it is not possible for them to receive large amounts of donations at once. This is not a problem for B2B clients, as they are delivering trucks to them.
To prevent abuse of this system, BeliGas has also set clear terms and conditions in its application, among which are instructions not to add other substances inside the oil to increase its volume, and to avoid piped hot oil to the team.
So where does the oil go?
BeliGas HQ and its dealers (outlets) operate separately, so when riders under a dealer collect oil, HQ will buy it. This allows BeliGas dealers to make more profit in their areas from other sources besides just selling gas alone.
The headquarters then either recycles the oil into biodiesel for its own trucks or to sell it to other biodiesel users. It’s an effective and safe process to use with some modifications, Suthan said.
There are other by-products of the oils used such as glycerin that lubricant makers can use, but this is a plan that BeliGas will only explore once a high-volume process is built up and has its own lab to experiment with.
Suthan said user reception of this new initiative has been excellent so far. “This is still new, of course, so we expect more people to start collecting and disposing with us just in the coming months (as their gas runs out). Even then, we’ve already done multiple home pickups.”
The team collected 500 liters of used cooking oil since then. Compared to their plan to collect 15,000 liters by the second year of the initiative, they’ve only taken small steps, but it’s still a good start.
Start-up model
Suthan said that this initiative is a permanent addition to BeliGas services, and they are working to promote it to raise awareness among end consumers.
“In the future, we hope to be able to collect about 3-5 liters of oil with every consumer we serve. We hope to grow to serve 100,000 consumers, and if we get to this, we are already playing a major role in making pipes, rivers and seas cleaner than used oil pollutants.” “
Apart from providing value to its clients, BeliGas wants to continue to provide employment opportunities to disadvantaged communities in Malaysia as well, especially during this pandemic.
I’ve got 66+ unserviced individuals on the payroll right now, and they’re unencumbered by roles as delivery riders either; Some were assigned to work at BeliGas centers and headquarters.
The model BeliGas used seems to work just fine for her; In a shy of a year (July 2021 will see one official year), the social enterprise generated around RM2.7 million in revenue.
To add, Suthan happily shared that the business is also profitable, which he attributed to the differentiated value proposition between traditional providers.
As of now, BeliGas already serves homes and businesses at 214 locations across the Klang Valley, with plans to launch in other Malaysian states once lockdowns subside.
Featured Image Credits: Suthan Mookaiah, Managing Director of BeliGas
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