CENVIRO SDN BHD, Malaysia’s leading integrated waste management company, 70%-owned by Khazanah Nasional Bhd, aims to facilitate a major shift in embracing the circular economy model by accelerating its focus on waste recycling and recovery. This is in support of the global and our nation’s sustainability agenda.

Conventionally, the world today operates in a linear economic model, the take-make-dispose approach, where raw materials are extracted, then transformed into products that are used by consumers, until the materials are finally discarded as waste.

In contrast, the circular economy model follows the reduce, reuse, recycle and recover (4R) approach, whereby the use of new and mined resources is minimised, while the reuse of products is maximised and materials are recycled back into the value chain. Waste is truly the resource of the future.

Cenviro, which stands for “clean environment”, with 30 years of experience is the first company to successfully operate a scheduled waste-to-energy (SWtE) plant since 2018.

Through its subsidiary Kualiti Alam Sdn Bhd, Cenviro owns and operates Malaysia’s first and Southeast Asia’s largest integrated waste management centre (WMC), which has been in operation since 1998 in Negeri Sembilan. The WMC is licensed to treat and dispose 76 of the 77 scheduled waste codes, which includes hazardous waste, e-waste and medical waste. Cenviro has another SWtE plant in Johor that will start operating in January 2024.

Apart from its existing recycling arm (Cenviro Recycling Recovery Sdn Bhd), Cenviro extends its involvement in recycling and recovery via its associate company Shan Poornam Sdn Bhd, which is the largest e-waste and metal recycling and recovery service provider in Malaysia. It is also involved in municipal solid waste management with its joint-venture company, E-Idaman Sdn Bhd, in the northern part of Malaysia.

Group managing director Dr Johari Jalil said Cenviro is focused on intensifying its capability of recycling and recovering valuable materials from scheduled waste that can be reused as resources or raw materials in industrial processes and to manufacture new products. The company already collects an average of 230,000 tonnes of scheduled waste annually.

“The shift of the customer’s focus right now is towards how we minimise waste because this is what the market expects. Therefore, aligned with our vision to become a modern resource company, our portfolio of incineration and landfills under treatment and disposal, which is currently about 80% of our group revenue, will shift to a more balanced 50:50 ratio with recycling and recovery,” he said.

“However, you can’t eliminate treatment and disposal entirely yet because not all materials can be fully recovered or recycled. If someone claims they can deliver zero waste, that’s far-fetched,” says Johari.

In future, with the advancement of technology, recycling capability can be further enhanced along with the manufacturer’s drive to intensify using recyclable raw materials in its production.

Cenviro has adopted the waste hierarchy model by reducing its own resource consumption, recovering and reusing existing materials and waste in its operations, and subsequently producing energy before diverting the residual waste to landfills. For example, recycling waste oil to fuel its incinerators including reusing wooden pallets and combustible waste, powering its plants using solar panels on the roof of the buildings, reusing treated wastewater for plant quenching, harvesting rain for grey water and generating electricity from its SWtE for the national grid. This is in line with the company’s sustainability tagline of “SHIELDing the Environment for Future Generations”.

Cenviro manages the first Vertical Secured Landfill (VSL), which refers to an innovative and safe environmental solution that creates more landfill space and capacity vertically, without the clearing of more land.

“The easiest way to operate a landfill is to build a new landfill from new land, but at the moment, we curb our need to sacrifice new land by deploying the VSL method instead. In simple terms, it is a landfill engineered on an existing landfill to prolong the lifespan of our landfill by many more years,” said Johari.

“If we want to position ourselves as a modern resource company, the agenda of sustainability and modern resourcing need to converge. These cannot be diverging when you talk about sustainability but at the same time you are opening more landfills and incinerating a lot more waste,” he pointed out.

To further enhance its recycling and recovery capability and capacity, the Cenviro board has approved an investment of RM200 million to undertake several projects in Cenviro Eco Park, its recycling hub, due to be completed in the next three years. This includes a plant that will recover and recycle food-grade PET plastic and turn it into recycled PET nurdles, as well as the recycling of used oil and sludge from the automotive and shipping industries to be repurposed as recycled base oil, and waste chemicals from the rubber industry to produce reprocessed rubber.

Cenviro’s ambitions are also in line with Khazanah’s long-term strategy of Advancing Malaysia  and to drive impactful outcomes for the country. The company’s greater focus on recycling and recovery is also in line with Khazanah’s strategy of creating a sustainable future where it hopes to play a leading role in shaping an equitable and responsible environmental, social and governance (ESG) transition for Corporate Malaysia.

Johari said the strategic partnership with South Korea’s SK Ecoplant, which owns 30% of the company, will further propel Cenviro’s expansion and branding beyond Malaysia. The partnership with SK Ecoplant, a renowned global leader, especially in research and development enhancements, allows the company to gain access to a wide range of sustainability and R&D projects that are aligned with its goals.

“SK Ecoplant’s expertise in technical and technological advancements is invaluable in our mission to promote the circular economy model for greener waste management. It also enables us to grow regionally. As the biggest player in the country, our growth catalyst would be through acquisitions and many of them will be outside of Malaysia, likely in Indonesia, the Philippines, Vietnam and so on. These are the countries that will grow in their industrial expansion,” he said.

In March 2022, Cenviro issued its first sustainability-linked sukuk of RM54.6 million in two tranches from its unrated Islamic medium-term note programme of up to RM500 million in nominal value. The issuance was in line with its commitment to reduce its greenhouse gas (GHG) emissions intensity by 5% by 2025 from its base year of 2020. This is despite a substantial project pipeline of new facilities in the next three years. Cenviro recently received the Best Sustainability-Linked Sukuk award at the Asset Triple A’s Islamic Finance Awards 2023.

On the company’s plan for an initial public offering (IPO), Johari said Cenviro has already mapped out its capital requirements for the future, which will encompass the need for capital injection to fund acquisitions, major sustainability projects, R&D as well as expansion to areas where it is not a dominant player, such as Sabah and Sarawak and Southeast Asia.

“An IPO is indeed an appealing channel of funds to us. We are now ready with a compelling equity story to support our ambition of being one of the largest resource management companies in the region,” he said.