How this Turkish startup seeks to be a one-stop-shop for waste management
‘Your trash is our pleasure’, was not only an ad that Nihat Kuruüzüm, a Turkish university dropout, fell on when he was in Montenegro. It was actually an eye open to this entrepreneur with a sales background, to realize the importance of recycling solutions.
He then returned to his home country, leveraged his knowledge in trade, finance, and marketing, and started Aco Recycling, an environmental marketplace in Izmir, Turkey, in May 2016.
One man, three solutions
Aco Recycling follows a B2B model, selling three recycling-assistance tools made by manufacturers in Turkey. “There was no big initial cost. It was only the budget we invested in the development of the website,” he said about self-funding this startup.
The first recycling solution is a smart reverse vending machine called B1. It mainly caters to shopping malls, university campuses, schools, and other populated area. “We have installed 10 of them in Turkey, three in Jordan and we are sending one to Algeria”, said Kuruüzüm.
The second tool the company offers is a smart waste management solution, Aco Smartwas, that targets municipalities and big collection companies. It allows them to monitor the fullness of waste bins and calculate the optimal route for waste collection, via sensors that monitor and provide real time data and an algorithm on a web-based software to establish the best route. They have installed around 200 sensors for their smart IoT management system in Turkey. “Smartwas has been installed in one local municipality in Kayseri, Turkey so far,” said Kuruüzüm adding that they have plans to install between 1,000 and 1,500 sensors abroad by the end of 2017, mainly in Latin America.
Smartwas is the most popular solution in Latin America and Europe, but it is not in the Middle East where few collection companies operate, according to Kuruüzüm.
Their third tool is underground and semi-underground bins produced by Aco Recycling’s manufacturing partner Öge Metal. The startup hasn’t sold this type of products yet, but is discussing a project to install one underground bin in a Latin American country, Kuruüzüm revealed. These bins cater mostly to municipalities. “They save space and provide more waste capacity, which reduces collection cost, without causing any visual pollution,” he explained.
Reaching out clients
Kuruüzüm’s marketing strategy is simple. He checks out big companies himself, contacts them, introduces them to his solutions and invites them to a meeting. He then shows them samples of the products he sells, and a demo presentation that highlights how the solutions [he is offering] can be profitable not only for the environment, but also for their corporate margin, he explained.
Aco Recycling has seven freelance employees in Turkey, three of them handle the software solution and four are dedicated to the vending machines. Kuruüzüm, however, is the only one dedicated to the venture on a full time basis.
Sold in wholesale and retail, Aco Recycling’s first revenue model consists of selling the smart reverse vending machine, then on selling the Aco Smartwas waste management system. The company gets paid once upon selling the machine, whereas for the Aco Smartwas system, it charges collection companies a monthly subscription payment, depending on the unit quantity. Kuruüzüm did not disclose the cost and the fees of each service.
“In the Middle East, we have sold a couple of smart reverse vending machines to Jordan’s Red Crescent,” said Kuruüzüm, revealing discussions to sell another machine in Algeria.
Distribution channels and challenges
Aco Recycling mainly operates in Turkey and in the MENA region through a network of 14 distributors, in addition to potential two new joiners. “If a client from abroad contacts us directly as a buyer, we put him in contact with our distributor in his region,” said Kuruüzüm.
In the MENA region, Aco Recycling is cooperating with Pro-Serve Jordan, KSA and Qatar. They are also cooperating with ACS Wireless in the UAE. The company is also in talks with a potential distributor in Kuwait, and is targeting several markets in Latin America such as Brazil and Colombia through distributors.
No special requirements or minimum sales are mandatory to choose a distributor. “We mainly seek experienced partners in the industry with a track record, available technical staff to secure a strong after sales support for end users,” Kuruüzüm explained.
Aco Recycling has even changed its manufacturing partner in Turkey. Before its B1 model, the company partnered with another manufacturer that produced a vending machine called R1. “We stopped collaborating with them and engaged with our current manufacturer as he offered us a better package with more competitive prices,” said Kuruüzüm.
Their biggest challenge has been introducing the products to the market as “they are relatively new and not cheap,” he said. “We also had to face the problem of high formalities in Turkey in addition to the multitude of managers in the companies we service,” he added.
As for competition, he explained that other companies such as Evreka Smart Waste Collection Systems among others, provide each of the three solutions they bring, but on a separate basis. “There is no one-stop-shop in the Turkish market that provides these three solutions altogether, and only few companies provide environmental solutions in the Middle East,” Kuruüzüm said. He believes providing the three solutions under ‘one roof’ set him apart from competitors.