It was a coincidence and an empty fuel tank that led Mahmoud Abo al-Rokab to his business idea.
During a trip in Britain in 2008, where he was working as a soccer commentator, he approached a gas station with the car he had rented.
Among the fuels on offer, one was marked with the sign “Biodiesel.” “What is this?,” he asked a gas station employer. “Go and google it,” came the brusque reply.
When Abo al-Rokab did just that, he found out that Biodiesel refers to diesel fuel based on vegetable oil or animal fat, the use of which in the European Union is for environmental reasons.
Among others, it can be produced from used cooking oil – a material that Egyptian families and restaurants dispose of in large amounts.
The idea was born: why not collect all this cooking oil, convert it into Biodiesel and sell it to Europe?
Back in Egypt, Mahmoud Abo al-Rokab started researching more in-depth about Biodiesel production and grew more and more fascinated.
Between 2008 and 2012, he says, he visited more then 20 Biodiesel plants around Europe and started to discuss his idea with a group of childhood friends. In 2013 they finally established their own Biodiesel production company:
With their own money and a loan from a bank that was convinced of their business plan, they acquired the production plant from Britain and started buying used cooking oil from Egyptian restaurants.
After some experimenting, they found the right method to distinguish quality oil from blended or diluted liquids and to turn it into the sort of high-quality Biodiesel that the European market craves.
In 2015, Khaled Ismail, a serial entrepreneur-turned angel investor well-known in Egypt’s start-up community, joined the company as an investor and mentor.
Today, Biodiesel Misr is a Joint Stock Company that has reached a production volume of 2000 tons of Biodiesel in 2017, according to Ismail Zaher, one of its co-founders.
The company is selling biodiesel to distributors in European countries such as the Netherlands, Spain, Italy and Malta, as well as Turkey. In 2016, the business magazine Forbes Middle East listed Biodiesel Misr as one of the most promising start-ups in Egypt.
And thanks to environmental policies in Europe, its prospects continue to look rosy. “In Europe they have
law that you must blend diesel with biodiesel, and they will raise the percentage in the coming years,” says Zaher.
In addition, companies get a tax discount for using biodiesel. So even though the price for biodiesel is a bit high, they keep buying it.
In fact, the biggest challenge is not to find buyers, but suppliers of the raw material needed for the biodiesel production: used cooking oil.
At present, Biodiesel Misr has contracts with restaurant chains to buy their used cooking oil. In addition, the company takes part in tenders and closed envelope auctions by multinational restaurant chains such as KFC or commercial suppliers.
But the start-up is constantly looking for additional sources of used cooking oil. “If we had more oil, we could easily sell more Biodiesel,” says Zaher.
This is why the company is now planning to target individual households in order to convince families to collect and sell their used cooking oil. “One family can produce 3 kilo of used cooking oil per months, and we have a population of almost 100 million people,” Zaher says.
“But instead of selling their oil, people just throw it into the sewerage, which then will take billions of dollars to clean. This is why we need to educate people about recycling. When they know that their waste will go to the right place and they can even make some money with it, they will be eager to sell it.”
With a new strategy currently in the making, Biodiesel Misr aims to collect 3000 tons of used cooking oil annually.
If the plan works out, it might even help to endear the concept of recycling to Egyptians on a larger scale, hopes Ismail Zaher.
He sees a huge, largely untapped potential in Egypt’s waste and recycling market more generally.
“In Egypt we have so much waste of any kind, but with the exception of plastic, very little of it is recycled,” he says. “We just have to change the mentality.”
“Once people get used to the idea of recycling things they don’t need anymore, like old mobile phones, the market for it will be huge.”