projecteverest

Experiment adopted

[FEB 19] [REPURPOSE] Plastic Outsourcing Option - Ximenes Belo

Ximenes Belo has recently verbally agreed to take our collected plastic bottles, hence validating the outsourcing part of ERS in Dili. We need to ensure that he is willing to pick-up our recyclables from the warehouse instead of us delivering to him (this determines whether the Ximenes option is viable).

 

In order to move forward with this stakeholder, we need to provide Ximenes with an LOA (Letter of Agreement), that will outline the prices and conditions of collection. We need to maintain this newfound relationship to ensure that it is viable and Ximenes can sustain positive relations with PEV (which have been rocky in the past → https://docs.google.com/document/d/1Td7VjHy492pcRLUDNZ5mikDSHHxkb-BOmjpovpnxRXk/edit)

 

Lean Phase: Revenue streams, solution

 

Assumption:

  1. The plastic outsourcing option with Ximenes is financially viable

 

Time Box: 1.5 Weeks

 

Success Metric:

 

Metric

  1. We are measuring if this newfound outsourcing option is viable.

 

Green Light - Proceed

  • Optimise financial projections (minimise variable costs + mitigate fixed costs) and explore scaling to maximise revenue.

Success Point:

  • If 70% profit margin can be attained, proceed with green light.

Orange Light - Optimise

  • Inform Collection on the exact figure that they need to sustain to keep ERS in the green.

Failure Point:

  • If the monetary figure required from Collection requires an increase in the cost of current BagPay and Premium

Red Light -

  • Explore NEW options for repurposing and potentially outsourcing

 

Experiment build:

  • Form an extensive financial projection that incorporates all costs incurred by Repurpose, to prove viability of option.
  • Have the LOA with Ximenes signed to ensure that our understanding of the verbal agreement is correct.
edited on 11th February 2019, 07:02 by Phoebe Chilman

Rose Gooding 2 months ago

Status label added: Experiment adopted

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Rose Gooding 2 months ago

LOA can be viewed here https://docs.google.com/document/d/1SB0K1uLCC...4V7vRL14pM/edit

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Sam Swain 2 months ago

Hi There,
I just wanted to ask a few questions.

May I ask how the margin of 70% was determined, is this from selling the plastics only or takes into account the collection?

Also will your projections take into account that if no deal, or a lower deal than expected, you'll be calculating the impact of holding onto the plastic for long periods of time and the value of the storage space/capacity you currently hold? I am not sure how large the storage area you have, but you'll need to consider the length of time you're able to hold onto the product without compromising the collection part of the company.

Sam

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Phoebe Chilman 2 months ago

Hi Sam,

Thanks for your interest! The 70% profit margin is based on selling plastics only.

Currently, ERS is running at a loss, primarily due to the cost of the warehouse ($150 per month). An agreement with Ximenes is vital to validating ERS. If we are unable to secure an agreement, there will be an impact on the Collection team with our warehouse capacity. If this is the case, we will continue to research outsourcing options for plastic.

Regards,
Phoebe

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Lucy Preiss 2 months ago

Phoebe this is so big! We've been trying to crack Ximenes for a long time. Does this mean he's finally got his machines? What is his/Star Product's current plan for the disposal/reuse of the plastic? Would love any updates on this and feel free to give me a call if you need any external context re Star Product or Ximenes.

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Phoebe Chilman 2 months ago

Hi Lucy! Ximenes showed the ERS Repurpose team in January a dossier of Star Product's operations and images of the machinery they are using, including compactors, crushers, bailers, injection moulding machines and pelletizers. Operations are currently based in Manleuana, however, they are in the process of moving to Hera, with construction planned to be finalised by the end of the month. His plastic processing operations in Manleuana have ceased for the past 2 years due to land issues. Despite this, Star Product still collects plastic and claims to have approximately 100 tonnes of plastic stored in Manleuana comprised of PET and HDPE.

A percentage of the plastic collected is outsourced and the remainder is repurposed to plastic chairs and similar products. It is understood that he has invested close to USD $1 million into buying machines to upcycle plastic into usable products.

We signed the LOA with Ximenes in our last meeting, where he agreed to collect all of our plastic bottles from our warehouse by the 15th of February. At this stage, it has been arranged that he will pick-up the plastic bottles from the warehouse in ERS' FIBC bags (1000 L), transport them to Hera in his trucks and transfer the bottles to his FIBC bags (300-500L) so that we will have our FIBC bags returned. He will then count the number of his bags our plastic bottles fill and has agreed to pay USD $1/FIBC bag. We estimate this will equate to approximately 119 FIBC bags. Unfortunately, Ximenes has been away this week and has reorganised a collection day for next Tuesday the 19th of February.

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