Sanergy: Converting Waste to Profit

One social enterprise is tackling three global issues by manufacturing high-quality and low-cost sanitation facilities for urban slums in the developing world. Sanergy, the for-profit/nonprofit hybrid founded by five MIT students in 2011, is addressing the sanitation crisis, producing organic fertilizer and renewable energy and generating a profit to boost the local economy. With the purpose of “turning human waste into human welfare,” Sanergy is transforming simple toilets into rewarding business opportunities.
David Auerbach, one of the co-founders and young entrepreneurs behind the company, witnessed the lack of basic sanitation – hygiene, accessibility and affordability – while working in rural China. Auerbach observed as the locals walked miles to utilize the pay-per-use unlined pit latrines. Even worse, the ground was covered with “flying toilets,” plastic bags used as toilets, tied off and thrown outside.
“Going to the bathroom isn’t a popular topic that comes up at the dinner table in the West,” said Auerbach to Forbes. “It’s flush and forget for us. That’s not the case in much of the developing world.” Finding a place to relieve oneself is an open issue in many countries, whether it be in rivers, roadsides or holes in the ground. But while water and sanitation development projects have been implemented in poor countries, few solutions have proven to be effective as the sanitation crisis continues to worsen.
According to the World Toilet Organization, 2.5 billion people worldwide lack access to toilets and are faced with the indignity of defecating in the open. Poor sanitation leads to diarrhoeal diseases that claim more children’s lives than AIDS, malaria and measles combined. Current progress shows that the U.N. Millennium Development Goal’s target for sanitation is particularly off-track, with one third of the world’s population deprived of improved sanitation. While clean and safe toilets are basic human rights and prerequisites for health, privacy and education, they are also frequently overlooked.
This problem is particularly critical in slums with high population density, poor infrastructure and lack of physical space or resources. In Kenya, the eight million slum residents are forced to rely on unsanitary options while their overflow of waste is discharged into waterways or fields, damaging the environment and the residents’ health.
Auerbach and the Sanergy team began to execute their efforts to transform sanitation in Kenya. The solution they proposed was “Fresh Life Toilets,” 3’ x 5’ units made out of thin shell cement that collect waste in 30 liter containers and are designed for 100 uses per day. Each toilet is locally produced for $200. Sanergy then franchises the toilets to a network of “Fresh Life Operators,” local residents who purchase and operate the sanitation facilities with a charge of $0.06 per use. The operators are essentially the company’s franchise partners – they are given financial training and marketing support and keep the revenues they make through the toilets.
Sanergy’s Fresh Life Team also consists of 100 members in an area with a 40 percent unemployment rate, providing them with contracts, pensions, and medical and life insurance. The company has helped more than 200 residents start Fresh Life businesses which has created employment opportunities for neighbors who run their daily toilet operations.
But Sanergy discovered a way to maximize their own revenues while still solving global problems and improving lives. The team recognized that human waste can be converted through anaerobic digestion to produce fertilizer or electricity. Waste is collected on a daily basis and sent to a centralized facility to be converted into useful by-products. Sanergy’s organic fertilizer is in high demand as 1.2 million tons of synthetic fertilizer is imported to East Africa each year, causing challenges of high transportation and tariff costs for farmers. On average, Kenya’s farmers use only 35 kilograms of fertilizer per hectare of arable land which is only a fraction of what is used in other developing countries. In addition, areas of East Africa face considerable energy shortages and are actively in demand of renewable sources.
The company has opened 455 Fresh Life Toilets in informal settlements, provided affordable access to hygienic sanitation for 18,000 people each day and collected about 2,050 tons of waste in the past two years. The waste from each toilet generates revenues of $1,250 per year. According to Forbes, the waste from 10 million toilets could potentially generate $178 million per year.
While this may seem far off, Sanergy has received much support from other organizations and businesses. The enterprise won MIT’s $100K business plan competitions which provided them with start-up funding and attracted the attention of multiple Silicon Valley venture capitalists. Sanergy has also recently partnered with USAID, The Bill and Melinda Gates Foundation and others corporations from both public and private sectors.
Within five years, the company hopes to provide toilets to more than half a million Africans and generate 11,000 tons of fertilizer and 7.5 million kilowatt-hours of electricity annually. As shown by their swift success, Sanergy has uncovered a promising new market: converting human waste to revenue.