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      Inclusive Business ASEAN
      Innovative and sustainable business solutions for social impact
      This is where you'll find the most compelling stories of how a global corporate finds its way into the realm of reaching and benefiting its low-income customers in an unprecedented manner. Inclusive Business ASEAN is one of the flagship solutions by Covestro's Sustainability Strategy on a global scale.
      The dominant concept is to establish sustainable business models that include the low-income segment of the population. As a world leading supplier of polymers, Covestro high value materials are used in lifestyle products such as automotive, construction, electronics, cosmetics and healthcare. However, as we believe in the balance of People, Planet and Profit, we have invested extensive resources in finding a way to bring our high-quality materials to the communities. In doing so, executing our commitment to the UN's SDGs: "Leaving no one behind". Inclusive Business is the solution in which we place our faith and confidence.
      Covestro aims to reach and economically benefit 10,000,000 people in the emerging markets by 2025. At Inclusive Business, we strongly believe in #Pushing Boundaries, such as developing partnerships to develop purposeful and sustainable solutions around food security, affordable housing, water, sanitation and others.

      Inclusive Business ASEAN works with our customers and like-minded partners to find readily innovations made out of our materials that could be adapted into business models. We work towards identifying investors who are interested in providing funding for projects such as local governments, NGOs, and other private investors in order to make the products affordable and accessible for the people in need (e.g. smallholder farmers in ASEAN).

      The highlights of our current solutions

      Solar Dryer Dome

      Even though Asia and the Pacific have an incredible capacity in producing food, 51% of the world's population residing in this area is still on the edge of food insecurity. Inefficient and inappropriate postharvest management leads to 20%-50% losses along the postharvest value chain in ASEAN*. This is equivalent to over 100 million tons of food production lost, or a value of USD 5 billion.

      Reduction of food loss and waste is now part of the 2030 Agenda under SDG 12, which seeks to "ensure sustainable consumption and production patterns." Target 12.3 under this goal is "for halving per capita global food waste at the retail and consumer levels and reducing food losses along the production and supply chains, including post-harvest losses, by 2030".

      Processed products development under dried forms may be considered more effective as the product can be preserved for a longer period of time and diversified in many types for various use purpose. The solar dryer dome offers much more than that.

      *FAO's 2017 Overview of Food Security in Asia and The Pacific, page 1

      Affordable housing

      As the world is quickly moving to a stage where we take environment into consideration in all of our activities, housing solutions are no exceptions. More and more initiatives have been taken to ensure a more sustainable way of living: reducing energy consumption with energy efficient housing designs, and yet, keeping it affordable. That definitely sounds like an impossible game to win. But, believe it or not, the consideration of innovative materials is a game changer.

      This affordable housing model applies such innovative materials: PIR (polyisocyanurate) - a line of materials that Covestro proudly carries. PIR foam panels are commonly used in cold room or industrial refrigeration. They have excellent insulation properties and show resistance to moisture. Houses build from PIR panels keep the heat out and minimize the usage of air-conditioner and are resistant against mold. Prefabricated PIR panels are light-weight and therefore enable shorter construction periods and are less labor intensive. Less labor and faster construction time means houses can be around 35%~40% cheaper than conventional buildings. The PIR panels present the respective advantages: Fast and simple construction process; Energy efficiency (Thermal insulation); Precise prefabrication; High design flexibility; Smooth surface finishes; Minimum construction waste; Minimum tools and equipment required on site; High quality.

      Curious, courageous and colorful stories about Inclusive Business activities in Southeast Asia
      Inclusive Business model built on solar dryer dome in Myanmar's market

      It all started with a public-private-partnership project called Economic Transformation through Food Security, or in short WeCare. The project was co-financed by DEG KfW and Covestro, implemented in three countries: Vietnam, Indonesia and Myanmar. It brought solar dryer dome models to 12 low-income communities in rural areas of the above-mentioned countries.

      In Myanmar, two of three communities received the solar dryer domes (SDD) grow and dry chili pepper for both domestic use and commercial sale. During one year of drying activities, the feedback from the communities was always positive:

      • The color of the chili dried inside the solar dryer dome was more vibrant and brighter than the one dried with conventional method;
      • The drying period was cut short by 50%;
      • The spoilage/loss was significantly reduced: from 30% to 10% of the final total dried products
      Conventional drying  Solar dryer dome
      Product value  1920 Kyat (~1.6 USD) per kg 3000 Kyat (~2.5 USD) per kg
      Reduced wastage 7 baskets of dried chili from 10 baskets of fresh chili (2.5kg – 3kg/basket) 8.5 – 9 baskets of dried chili from 10 baskets of fresh chili (2.5kg – 3kg/basket)
      Time consumption  3 days
      1.5 days

      Data collected between May 2016 to May 2017

      After the installation of the dryer, the challenge of establishing the linkage between these farmers and the market still persisted even when Inclusive Business of Covestro took on the task of scaling up this solution after the project was closed in June 2017. However, early in 2017, Natural Farm Fresh Myanmar (NFFM), a newly founded social enterprise in Yangon by Burmese entrepreneurs who are passionate about and determined in developing the potential of their country’s agriculture sector, contacted Inclusive Business Covestro to initiate partnership after they had observed the operation of the solar dryer dome on the ground. After more than half a year discussing and drawing up a memorandum of agreement, the two parties finalized their partnership in scaling up the model of solar dryer dome in Myanmar.

      Only a few months after the signing ceremony between NFFM and Covestro, four mid-size SDDs (8mx12m) were already installed and went into full operation. Five more are on the way to the ground in January 2018. Two are from SME owners drying gingers and vegetables in Yangon and Tet Kone. The remaining three will be under grants from Responsible Business Fund (RBF) from the Government of Denmark to NFFM for processing safe, clean, and hygienic chilly in the central of Myanmar.

      In November 2017, NFFM nominated and introduced 4 farmer cooperatives to RBF grant. If they receive the grant in February 2018, with the SDDs installed, these farming cooperatives will dry tea, coffee, ginger and herbs. Moreover, NFFM is also likely to be assigned as a Service Provider and an Equipment Supplier of SDD in Myanmar.

      “We have presented our SDD in brochures, seminars, and we invited them to send their trial products to NFFM's Solar Dryer in Myittha. Then we observe the end products together, we learn from each other and find the way to improve end products. NFFM’s showcase of 4 SDDs in Myittha plays a vital role for winning trust from farmers. Seeing is believing.  NFFM introduces the farmers to RBF and assists them in preparation of their proposals to meet their need of drying problem.” – Mr. Nay Oo, Managing Director and Founder of NFFM shared about how the social enterprise engages farmers in the production.

      NFFM also has an verbal agreement with Ayeyarwaddy Farmers Development Bank to provide farmers SDDs with hire purchase basis for 3 years. A link has been established among SMEs, farmers, farmer cooperatives, NGOs, and some corporations to market their products.

      In the effort of opening a pathway for Myanmar’s exported goods, NFFM have received visitors from JGC Corporation (Japan), Daesang (South Korea), and Metro (Germany) to see our SDD as well as our products of dried chilly.

      At the moment, NFFM shows the chilly market that we can overcome the fungus (Aflatoxin) problem by a proper drying process and reducing the moisture content after the harvest. It draws public attention and motivates people from outside of chilly industry to invest in chilly business.

      “Our biggest challenge is to cope up with the rate of growth of the business in terms of 3M - men, material, and money.” – Mr. Nay Oo also said.

      NFFM believes that SDD technology is a basic but essential for all due to several reasons:

      1. Now, food security and safety is the headline in Myanmar daily newspaper. SDD will contribute to providing clean, hygienic, and healthy food.

      2. High-quality and locally produced products by NFFM can compete with imported foreign products and will reserve our rare foreign earnings. In the long run, they can export back to foreign countries with good and quality foods.

      3. Due to value added products and better drying efficiency, income of farmers and farmer cooperatives will certainly increase.

      4. By employing the SDD in post-harvesting process of chilly, jobs can be created in specific areas and people are trained with better knowledge to use equipment and new processing methods.

      The drop in post-production wastage

      Every summer in Vietnam, if one opens local news outlets, one would often see a wide range of media coverage on the government’s effort in having to bail out many farmers because of the large surplus of their produce. To name a few, there are pineapples, turnips, shallots, bananas, etc. If the government does not intervene, most of the perishable produce will go to waste and farmers who do not manage to at least breakeven with their sales will go bankrupt. This particular problem has been persistent for a number of years despite the government’s continuous efforts in warning the farmers about overproducing and exceeding the market’s demands for certain commodities.

      What’s the matter?

      According to a 2018 survey by CEL consulting on post-harvest loss in Vietnam, the fruits and vegetable group account for the worst food loss percentage (32% of production). This represents approximately 7.3 million ton of fruits and vegetables lost per year. In the fish and seafood group, losses represent 12% of production (about 804 thousand ton per year)

      CEL’s survey also revealed that “a large majority of farmers lack access to credit that would facilitate investments in improving currently poor production and harvesting conditions (e.g. more efficient tools that reduce food damage during harvesting, appropriate storage facilities)”. The same conclusion had also been reached in FAO’s 2017 Overview of Food Security in Asia and The Pacific as they looked at food security issues in the region.

      Undeniably, Vietnam is not the only country facing this problem of food loss but it is a common problem in the region as well. In Asia, in total 28.7 % of the food is lost and wasted. Of this volume, 31% of the food loss is found during the harvest phase and 34% in the postharvest phase, while 35% is found in the processing, packaging, distribution and consumption phase.

      Even though Asia and the Pacific have an incredible capacity in producing food, 51% of the world’s population residing in this area is still on the edge of food insecurity. Inefficient and inappropriate postharvest management leads to 20%-50% losses along the postharvest value chain in ASEAN. This is equivalent to over 100 million tons of food production lost, or a value of USD 5 billion.

      According to FAO, there are many causes of food loss and waste, some of which are “harvesting at an incorrect stage of produce maturity, excessive exposure to rain, drought or extremes of temperature, contamination by micro-organisms and physical damage that reduces the value of the product.”

      Reduction of food loss and waste is now part of the 2030 Agenda under SDG 12, which seeks to “ensure sustainable consumption and production patterns.” Target 12.3 under this goal is “for halving per capita global food waste at the retail and consumer levels and reducing food losses along the production and supply chains, including post-harvest losses, by 2030”. The FLW reduction goal was also included as one of the five targets in the Zero Hunger Challenge launched by the UN at the Rio+20 Conference in 2012.

      The Minister of Vietnam’s Ministry of Agriculture and Rural Development, Mr. Nguyen Xuan Cuong, announced in January 2018 that even though the annual average production of horticulture products (fruits and vegetables) was 22 million tons per year, only 9% of the total products was processed. The rest was either consumed fresh or lost (>25%) due to their perishability.

      Among many solutions proposed by experts to reducing postharvest loss of horticultural crops in developing countries including Vietnam, a compelling one is to invest and develop postharvest technology which helps with lengthening the shelf life of the products. Depending on each commodity, it could be a cold storage solution or drying the perishables when the price drops below breakeven point.

      According to Dr. Nguyen Van Phong, Head of Postharvest Technology Department, Southern Fruit Research Institute, processed products development under dried forms may be considered more effective as the product can be preserved for a longer period of time and diversified in many types for various use purposes.

      What could be done?

      The Minister of Vietnam’s Ministry of Agriculture and Rural Development, Mr. Nguyen Xuan Cuong, announced in January 2018 that even though the annual average production of horticulture products (fruits and vegetables) was 22 million tons per year, only 9% of the total products was processed. The rest was either consumed fresh or lost (>25%) due to their perishability.

      Among many solutions proposed by experts to reducing postharvest loss of horticultural crops in developing countries including Vietnam, a compelling one is to invest and develop postharvest technology which helps with lengthening the shelf life of the products. Depending on each commodity, it could be a cold storage solution or drying the perishables when the price drops below breakeven point.

      According to Dr. Nguyen Van Phong, Head of Postharvest Technology Department, Southern Fruit Research Institute, processed products development under dried forms may be considered more effective as the product can be preserved for a longer period of time and diversified in many types for various use purposes.

      A humble proposition

      As a part of our corporate’s sustainability strategy, about five years ago, Covestro Inclusive Business (IB) started building business models revolving the low-income segment of the market with the solutions made from Covestro’s materials.

      One of the solutions that Covestro IB has been promoting in ASEAN is solar dryer dome (SDD) which takes advantages of the sunlight to dry agriculture produce in a closed space with the greenhouse effect principles. Moving the drying process into a closed space has strongly proven to be an effective solution to reduce postharvest loss.

      Tan Binh Agriculture Cooperative is situated in an isle of Thanh Binh District, Dong Thap Province, Vietnam. The cooperative’s members produce about 2,000 tons of fresh chili (bird’s eye chili) per season (6 months). For the past few years, the impacts of climate change have been as present as ever with the unusually high level of flood and extended period of dry season to the point of severe draught. The heavy rain during this season resulted in the loss of dried chili in the conventional method: on the ground out in the open air. Whenever the rain comes, the chili must be gathered and stored temporarily inside some storage space without being spread out. This exposes the chili to contamination such as insects, diseases, parasites and mould. The final products are deformed and the original color is drastically faded together with vitamins and minerals. The deputy director of the cooperative, Mr. Nguyen Van Son, confirmed that during rainy season, the loss after drying chili is 25% of every batch which is about 1 ton. The loss was reduced to only 10% after using the SDD.

      Having conducted tests and measurements with several commodities using the SDD since the middle of 2017, Dr. Phong is optimistic with this drying solution for the Mekong Delta region. Solar greenhouse technology has convincingly proven its advantages in regard of energy consumption and product quality.

      In Vietnam, the SDD is being disseminated through closed cooperation between Covestro and Center for Application of Science and Technology Progress (Agitech), An Giang. Agitech’s engineers have received a complete training course from Dr. Serm Janjai, the inventor of the SDD, at Silpakorn University, from the theory and scientific research results behind the SDD’s design to fabricating and installing demonstrations.

      The localization of the SDD’s manufacturing has reduced the cost significantly compared to importing the whole kit from Thailand as before while still ensuring the exact same quality.

      And more information on other benefits of the SDD can be found here.

      Comfortable and energy-efficient housing that is affordable: why not?

      As the world is quickly moving to a stage where we take environment into consideration in all of our activities, housing solutions are no exceptions. More and more initiatives have been taken to ensure a more sustainable way of living: reducing energy consumption with energy efficient housing designs, and yet, keeping it affordable. That definitely sounds like an impossible game to win. But, believe it or not, the consideration of innovative materials is a game changer.

      Be Curious!

      I remember a decade ago, the concept of “affordable housing” was emerging around developing countries as an effort of the governments in addressing the housing shortage for the increased population in urban areas, mostly the urban poor. The concept sounded like a novelty that was hard for people to grasp. It also raised concerns about the quality and safety of the so-called “affordable houses”. Projects were launched but people weren’t convinced.

      However, we are truly living in the age where we believe that challenges can be overcome as long as we persevere and collaborate. For quite a few years, Covestro’s Inclusive Business ASEAN has been investing tremendous effort in search for such like-minded partners in developing an affordable housing solution from Covestro’s materials. The challenges were strongly present when the stories were shared. Not the typical problems one would come across in business development because inclusive business is nowhere close to “being typical”. But in the end, the conclusion from Soo Mei our country manager for Malaysia and Philippines: “Still, I have to move forward.”

      Possessing that very same spirit led Soo Mei to an invaluable opportunity to cooperate with United Panel System (UPS) in our affordable housing initiative.

      Since its establishment in 1978, UPS has been specializing in the production of injection polyurethane (PU), polyisocyanurate (PIR) and polystyrene (PS) insulated panels for walk-in cold rooms. They initially planned to penetrate the construction sector as well with their PIR panels and were exploring the market. Covestro came in timely to present an opportunity to build a kindergarten with them. A Memorandum of Understanding solidifying the cooperation between UPS and Covestro on October 2017.

      Embarking on the quest

      Approached by the local government, Covestro IB was asked if we could apply our technology to refurbishing a kindergarten in Kuching, on the island of Borneo, called KG Kudei Kindergarten. After a recent flood, the building was severely damaged and the local government was trying to ensure that the children were not left behind.

      The school runs 2 sessions daily; 7.30 – 11.30am & 12.00 – 4.00pm. With the climate in this part of the country, during days when the temperature was high, the classrooms felt like an oven, making teaching or studying unbearable for both teachers and their young students. It was a heart-wrenching image to ponder upon. In collaboration with Ministry of Sarawak, Ministry of Works, and UPS, Covestro IB was therefore determined to give these teachers and students a better school with our innovative housing solution.

      The affordable housing model that Covestro ASEAN has been promoting in the Philippines and Malaysia applies such innovative materials: PIR (polyisocyanurate) – a line of materials that Covestro proudly carries. PIR foam panels are commonly used in cold room or industrial refrigeration. They have excellent insulation properties and show resistance to moisture. Houses build from PIR panels keep the heat out and minimize the usage of air-conditioner and are resistant against mold. Prefabricated PIR panels are light-weight and therefore enable shorter construction periods and are less labor intensive. Less labor and faster construction time means houses can be around 35%~40% cheaper than conventional buildings. The PIR panels present the respective advantages:

      • Fast and simple construction process
      • Energy efficiency (Thermal insulation)
      • Precise prefabrication
      • High design flexibility
      • Smooth surface finishes
      • Minimum construction waste
      • Minimum tools and equipment required on site
      • High quality

      On 8th May, 2018, after roughly three months under construction, the kindergarten was inaugurated with the attendance of rejoiced teachers and students, relevant stakeholders and the local authority.

      Constructed with the PIR panels, the school is now much more spacious, brighter, and cooler. The teachers also commented that they could feel the difference in the temperature when they stepped into the PIR constructed kindergarten. It is easier for them to clean and maintain the school now. They also have more sturdy walls on which they can hang photos and visual aids for teaching.

      What does the future look like?

      Covestro IB thrives on three elements: People, Planet and Profit (3Ps). No matter what the agenda might be, “we have to be positive in two of the Ps and we cannot be negative in the third P”.

      This technology undoubtedly benefits first the People. The communities can certainly enjoy a homely living condition, comfortable and secured environment. The government can deliver their housing projects in a shorter time with much more durable and resilient results. The construction time and waste is reduced hence the saving on labor cost and materials. The technology allows high design flexibility as well as high quality finishing.

      Establishments constructed with PIR panels are proven energy-efficient, which means residents in warm tropical climate will be less dependent on fans or air-conditioners, hence save on energy consumption. This housing solution facilitates a way of life that is much friendlier to the environment.

      Using PIR panels in construction belongs to the Industrialized Building System (IBS) which is a faster method of construction applied by the government in Malaysia. IBS involves less manpower and wastage, providing a cleaner and safer work environment. And the quick rebuilding of the kindergarten after the flood did evidently shorten the duration that the children were left without a proper school to attend.

      “IBS is the key component under the productivity strategic thrust of the Construction Industry Transformation Programme (CITP) 2016-2020 which seeks double the construction industry productivity level.” – Mr. Fadillah Yusof, Works Minister, stated the merits of the IBS. This shows the awareness of Malaysian government about the importance of innovative solutions in improving its citizens’ quality of life.

      “Affordable housing should be a basic right for everyone. It’s not only a house they lived in, it’s a permanent home we want them to own and be proud of. In a long run, such technology is more environment-friendly and less labour intensive.” Stefan Koch, Head of Inclusive Business ASEAN

      A new route to the market serving low-income segment of the population has been opened in the front of affordable housing. This contributes to ensuring that no one is left behind in the path of achieving sustainable development. It is a solemn promise by not only the civil society to the UN’s SDGs but it is also a commitment of Covestro as a member of UN Global Compact, a community of private enterprises engrossing themselves in corporate sustainability initiatives.

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