Honkajoki CONCEPT Presentation SHORT 1

Growth by Recycle

Honkajoki Oy

6. Clean Water and Sanitation 8. Decent Work and Economic Growth 9. Industry, Innovation and Infrastructure 12. Responsible Consumption and Production 17. Partnerships for the Goals

Overview

The main innovation of Honkajoki is to get different companies in an area to work together to collect raw materials from food production and then refine them to other products, so that none of the resources are wasted in the process. They are also exporting this knowledge and education to other places and continents, which helps them tackle more SDGs. The innovation helps to target the following SDGs: 6: Clean water and Sanitation, 8: Decent Work and Economic Growth, 9: Industry, Innovation and Infrastructure, 12: Responsible Production and Consumption, and 17: Partnerships for the Goals.

Authors

N Belda

N Belda

Sara Tabrizizadeh

Sara Tabrizizadeh

Minja Ahonen

Minja Ahonen

Martin Ritter Schubert

Martin Ritter Schubert

School

Hanken School of Economics

Hanken School of Economics

Professor

Jouni Virtaharju

Jouni Virtaharju

Innovation

Even though people might eat different things in different countries, the challenges regarding the waste of meat production are roughly the same. However, in many countries knowledge about how to manage waste in meat production is lacking. Honkajoki’s innovation is selling expertise about this topic to actors in such countries. The approach Honkajoki has taken is not to see waste only as a byproduct that is harmful to the environment, but rather as raw material containing lots of energy and nutrients that can be used for new, profit-generating products. As Honkajoki is focused on selling expertise about the topic, they do not sell equipment or manage the waste for other actors. Instead, the aim is to support actors in learning how to manage their waste in a sustainable way themselves.

The development of the innovation took a big step forward in 2017 when Honkajoki founded a subsidiary called GMM Finland. Since then, GMM Finland has been the biggest driver in finding partners to work with and exporting knowledge and concepts to their clients. GMM Finland is also doing most of the design and architecture work for the types of industrial processes that are needed for the clients. The goal for the innovation is to get companies all over the world to invest in sustainable meat production side stream management, with Honkajoki selling expertise and knowledge to clients trying to start their recycling businesses.

Growth by Recycle

Inspiration

Honkajoki already manages 75% of all animal byproducts in Finland, and therefore there has long been a need to expand to new markets. As Honkajoki started to research other markets, they quickly realized that there is a lack of knowledge about managing the waste in meat production. With Honkajoki’s innovation, Reetta Nevala, the Head of Business Development at Honkajoki, wants to fill this gap.

“As long as people eat meat, we need proper solutions to solve that challenge [waste in meat production].” (Reetta Nevala, 2021)

One big issue with waste in meat production is its harmful effects on the environment. However, Honkajoki wanted to take the innovation one step further. Instead of only managing the waste in an environmentally friendly way, Honkajoki helps their clients to find ways to make use of the byproducts. This way, Reetta Nevala hopes to open up eyes for the clients that recycling can also be a profitable business.

“[the idea is] not to look at waste as an issue, it is more raw materials for us.” (Reetta Nevala, 2021)

Overall impact

Honkajoki’s innovation is all about the creative ways of avoiding waste and managing proper waste management. The byproducts of the meat industry are rich in minerals and nutrients, and by being able to put them back to use, they are using fewer natural resources than the imported soy from outside the EU’s borders would use, which is commonly used as animal feed. Efficient waste management helps to create economic growth, through creating new products of the industry side streams and byproducts. On top of that, they also help to create new jobs since the idea is to involve the locals of the target area in the process.

The innovation also helps to create a circular economy for products, which would otherwise be considered waste. In addition, it creates different business opportunities and helps to change minds and how we look at the raw materials. Instead of looking at them as waste, Honkajoki helps clients to realize that the byproducts can be useful and even profitable while returning them to circulation. Since the raw material already exists as a byproduct, it is only smart for the companies to utilize them as resources that can be used in other parts of the same industry. The fact that Honkajoki made a profit of over 3 million euros from their recycling business during 2020 proves that the business model Honkajoki is now exporting is very viable.

Business benefit

As Honkajoki already controls 75% of the market in Finland, there is not much room to grow. The innovation helps with Honkajoki’s goal of expanding to new markets, which has several benefits. It provides a new stream of revenue for the company, which even has led Honkajoki to found the subsidiary GMM Finland. The innovation also helps Honkajoki to get a presence in new markets, which can be beneficial for the future. The company estimates that the need for meat products in sub-Saharan Africa and Southeast Asia will nearly double by 2050. This means that there will be an increasing demand for solutions in animal waste processing.

Furthermore, the innovation helps Honkajoki expand their knowledge about the topic as a whole. This can also support their existing recycling business in Finland. Reetta Nevala sees the innovation as a way to update and strengthen the brand of Honkajoki as a leading sustainable recycling company. The innovation helps to create jobs for engineers, designers, and other experts both in Finland and abroad. Since the idea is to sell intelligence and knowledge about more efficient waste management, it is scalable. There are a lot of areas which would benefit from this solution. When meat is consumed or produced, the byproducts have to be placed somewhere, and instead of placing them in a dumpsite, they can be recycled or refined, which can generate profit.

Social and environmental benefit

In contrast to Finland, in many other countries, it is legal to dump waste from the meat production directly to dumpsites. As the waste often contains e.g., viruses and bacteria, it can lead to diseases spreading. The waste can also harm the environment in other ways, like for example polluting the ground and the groundwater. As Honkajoki’s innovation improves the management of waste from meat production, it has a positive impact on the environment. These relate strongly to the following SDGs: 6: Clean water and sanitation and 12: Responsible production and consumption.

The innovation also creates more work, both for people in Finland as well as in the target countries. Honkajoki also aims to improve the awareness and knowledge overall around the recycling business - therefore supporting other companies in finding new growth opportunities. They are also aiming to get companies all over the globe to get committed to recycling. In this way, Honkajoki’s innovation relates strongly to SDG 8: Decent work and economic growth, and SDG 9: Industry, innovation, and infrastructure. In Finland, a big part of Honkajoki’s customer base use the byproducts from meat production to produce biofuel. This is also relevant for Honkajoki’s clients in other countries that are looking to develop their recycling business. They also support and create North-South partnerships for knowledge-sharing to encourage creating sustainable business in developing countries. Therefore, SDG 17: Partnerships for the goals, relate to Honkajoki’s innovation.

Interview

Reetta Nevala, Head of Business Development

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Honkajoki Oy

Honkajoki Oy

Honkajoki, FI

Business Website: https://www.honkajokioy.fi

Year Founded: 1967

Number of Employees: 51 to 200

Honkajoki is a 50-year-old company, and for them, the business idea has been the same the whole time: to collect animal byproducts from meat production and then process them for industrial use. The raw material collected and processed by Honkajoki is being used in products such as fertilizers, fuel, pet food, and even cosmetics. They are the biggest player in Finland processing three-quarters of the animal byproducts produced in the country. Through their subsidiary, GMM Finland, Honkajoki have now started to export their knowledge to new markets.