Kubik, a startup with offices in Kenya and Ethiopia, transforms recycled plastic waste into interlocking building materials, including bricks, beams, and columns. Recently, the company has commenced operations in Ethiopia, where it is targeting the affordable housing market. The country currently faces a housing deficit of around 1.2 million units, with a need for 381,000 new housing units annually. In contrast, only 165,000 units are produced each year.
Established in 2021, Kubik is the brainchild of co-founders Kidus Asfaw and Penda Marre. The company’s founding traces back to 2018, when Kidus, a former employee of Google, Accenture and the World Bank, was working for UNICEF. During a conference in Prague, Kidus received a call from his friend, Aboubacar Kampo, the then head of UNICEF in Côte d’Ivoire.
Kidus was urged to immediately travel to Côte d’Ivoire following the conference. Upon arriving in Abidjan, Aboubacar promptly chauffeured him from the airport to a local elementary school.
Initially puzzled by the ordinary-looking structure before him, Kidus soon learned that what stood in front of him was not simply a classroom, but five tonnes of repurposed plastic waste.
In the subsequent months, Kidus, along with Aboubacar’s team, supported the outfit that produced these plastic bricks. They set up a factory in Abidjan, and secured the government’s commitment to build over 500 classrooms using these recycled materials. Also working on the project was Penda Marre, Kidus’s future co-founder, who had left her successful construction company in Texas to help support UNICEF’s plastic-to-schools project in Côte d’Ivoire.
However, from the moment the project took off, Kidus wondered how this technology could scale beyond Côte d’Ivoire and classrooms. He concluded that only a profit-driven company could achieve this. While several entities in Africa – including the one that UNICEF supported in Côte d’Ivoire – transformed plastic to building materials, none had managed to scale significantly. Some operated as non-profit organisations relying on donor grants, while others focused on exporting to regions like Europe, rendering the product too costly for African markets. Many set their prices higher than conventional building materials.
It was this realisation that motivated Kidus and Penda to strike out on their own.
Targeting real estate developers
Kubik primarily caters to real estate developers. According to Kidus, convincing builders to adopt this nascent building material hinges on competitive pricing, quick construction times, and structural integrity. Developers are also looking for a product that allows them to finish walls, in terms of painting and plastering, according to their own preferences. Kidus states, “They are not looking for fancy products, they’re actually looking for super boring products.” He says the fact that the bricks are made from recycled plastics, and has a significantly lower carbon footprint than traditional materials, is usually the last detail shared with potential buyers.
Kidus reveals, “We spent the majority of our time really thinking through a business model that can allow the price of our product to be very competitive compared to cement [and] at the same time caters to real estate developers’ needs.” He says Kubik’s building materials sell for over 40% less than traditional cement bricks.
There’s an immense housing deficit in Africa, amounting to over 100 million units. Kidus highlights that Ethiopia’s market for low-cost housing materials is worth over $3 billion annually. On a larger scale, the value of this market across Africa exceeds $700 billion.
Working with waste collectors
The Kubik team consciously steers clear of direct involvement in waste collection, viewing it as a separate industry already well-established in many African countries. Instead, it focuses on incentivising collectors to sell their plastic waste to them.
Strategically, Kubik uses plastics not typically in high demand among other recyclers. This creates a new market for waste collectors, allowing the company to avoid competition for more popular plastics like PET, commonly used for water bottles.
Plastic sorting and manufacturing
Upon procurement, Kubik’s team sorts the collected plastic waste into various types. The sorted plastic is then transported to the company’s factory, situated in an industrial park on the outskirts of Addis Ababa. Here, the plastic undergoes a thorough cleaning process. Post-cleaning, the plastic is converted into flakes or pellets. These are then put through an extrusion process to create the building materials.
Navigating funding obstacles
In June, Kubik revealed that it had secured $3.34 million in seed funding from a string of investors, including Plug & Play, Bestseller Foundation, GIIG Africa Fund, Satgana, Unruly Capital, Savannah Fund, African Renaissance Partners, Kazana Fund, Princeton Alumni Angels, and Andav Capital.
However, fundraising was still a challenge, according to Kidus. He states that venture capitalists are typically hesitant to finance capex-heavy businesses like Kubik, which operates a factory. On the flip side, those investors who do support manufacturing ventures usually prefer more established businesses.
The construction of the factory represents Kubik’s largest investment to date, Kidus notes.
He predicts that Kubik will achieve profitability next year. “It’s a very profitable business. And our business model is really focused around how we can then reinvest a lot of that profit into making this technology better.”
Kubik CEO Kidus Asfaw’s contact information
Contact details are only visible to our Monthly/Annual subscribers. Subscribe here.