AC-COOL project provides bioplastic products (food containers, bottle, zip bag, etc) made from biowaste (corncob, straw, coconut shell, etc). Our products are 100% bioplastic, eco-friendly and safe for health. Our innovation is a new catalyst AC-COOL. With AC-COOL, we reduce production cost by about 140 times. Our quality is approved by experts from several well-known universities (HNUE, HUST, VNU, etc).
World’s capacity will increase by 25%, reach 2.6 million tonnes in the next five years (Europeans Bioplastics 2018). Accompany with people’s awareness of health and environment, AC-COOL project will contribute a significant part to living condition improvement in the future.
- BUSINESS MODEL CANVAS
I. BMC BLOCKS DESCRIPTION
- SOCIAL VALUES PROPOSITION
We start with social value since it is the most important factor to distinguish social business with normal business.
We simultaneously solve 2 social problems, which are petroleum plastic pollution and agricultural biowaste pollution, with one combined process. The key idea of the process is to convert agricultural biowaste into bioplastics to replace petroleum plastics.
Firstly, the business aims at reducing environmental pollution caused by improper treatment by means of introducing an alternative method of resolving agricultural bio-waste. Through our process, agricultural biowaste is gathered from farmers in rural areas and then converted into bioplastic instead of being burnt or buried. Therefore, this technique is highly environment-friendly compared to the traditional method.
Secondly, the output of our manufacturing process is bioplastic, which is proven greener than healthier existing plastics made from petroleum. Bioplastic can be utilized in various category to create containers made from bioplastic, i.e the production of food box, bottle and zip bag, etc. “Bioplastic containers” is has been demonstrated to significantly create positive impacts on customers’ health and well-being.
- BENEFICIARIES – SOCIAL VALUE CUSTOMERS
Our beneficiaries are the society and farmers.
If people are using more and more bioplastics instead of petroleum plastic, the environment as a whole will be significantly improved. Bioplastics have a unique advantage over conventional plastics in terms of reducing the dependency on limited fossil resources and reducing greenhouse gas emissions. On the other hand, while petroleum plastic is not biodegradable and up to 1000 years to decompose, bioplastics can be biodegradable in about 3 months (depending on the purposes, bioplastics have different duration of time to biodegrade). Therefore, bioplastics contribute to a cleaner living habitat, which fixes the error of approximately 400 million tonnes of plastics released each year.
We also use biowaste from farms and fields as a source of input for our bioplastics manufacturing process. At present, burying and burning residue from agricultural activities are common sense, which directly releases CO2 to the atmosphere, damage soil quality and groundwater. For example, Vietnam agriculture discharges around 7.8 million tonnes biowaste per year. By utilizing them, we help reduce the amount of improperly treated biowaste and upgrade the conditions of the land, air, water in the countryside.
Furthermore, we consider social investors as our customer for this social value of AC-COOL project. Concerned about social problems, including environmental issues, these are the people who will also benefit from the positive outcome AC-COOL creates for the society. They invest to make our business developed when their desires are satisfied.
- KEY RESOURCES
The society is the market where the finished products are sold and consumed. Specifically, Vietnam plastic market has grown sustainably with an annual growth rate of 16-18% and a market value of 7.1 billion USD in 2017 (Vietnam Plastic Industry Report, 2016) . Since the petroleum plastic is already proved to be very harmful to our environment in many ways, the substitution – bioplastic is created to have none of the former’s drawbacks. When society adopts the bioplastic, a large market will open up for this innovative material.
Meanwhile, farmers provide input for the production process with agricultural waste. Each year, approximately 94 Mt of rice residue is produced in ASEAN countries, a large amount of which is treated improperly. Considering Mekong Delta in Vietnam specifically, the local residents produce 21 Mt of rough rice and an estimated 24 Mt of straw (dry weight) annually, approximately one-fourth of which is burnt on the field area . These would be cheap, proper and environmentally friendly input for the production of bioplastic. In addition, farmers also could act as supporters in our factories.
Another essential resource is the invention of newly introduced catalyst AC-COOL owned by Mr. Le Minh Hieu. Based on this technology, we produce unique bioplastic products with a lower price (140 times cheaper than other process using enzymes as a catalyst) and harmless effect to the environment (no toxic chemical discharged to the surroundings throughout the process).
 Vietnam Plastic Industry Report by Vietcombank (2016)
 Garivait, S., Bonnet, S. and Kamnoed, O.(2008). Air Pollutant Emissions from Paddy Residues Open Burning and their Potential for Bioenergy in the Greater Mekong Sub-Region (Cambodia, Lao PDR, Thailand and Vietnam). GMSARN International Journal.
- KEY PARTNERS
Since our main advantage is bioplastics production process, we need machining outsourcing partners to make bioplastic products, which are food box, bottle and zip bag.
Our value chain includes a lot of logistics activities, therefore partners that provide logistic service are very crucial.
Experienced and professional distribution partners are also required for delivery so that our eco-friendly and healthy bioplastics products can reach all the end customers.
Considering the social values our business model brings, we suppose the local authorities are interested in our business. Cooperating with the local authorities is essential in terms of building a relationship with farmers for input and boosting the popularity of bioplastic products among rural residents.
- KEY ACTIVITIES
First, conducting research & development in order to continuously innovate better bioplastics manufacturing processes
Second, collecting agricultural waste from farmers for the materials of the system
Third, producing bioplastics, which is then used as the material for making bioplastic products in our partners’ factories.
Finally, selling bioplastic products to end customers.
- VALUE PROPOSITION
With the key resources received from our partners, along with our key activities, we declare our business value proposition as below:
We realized the pains our customers are struggling are problems with their health in their daily lives. Some of which are caused by petroleum plastic, also known as normal plastic we are using frequently every day. In a research in 2018, Ram Proshad and his co-authors have indicated that petroleum plastics components of principal concern have been associated with a number of health problems such as ovarian chromosomal damage, decreased sperm production, rapid puberty, rapid changes in the immune system, type-2 diabetes, cardiovascular disorder, obesity, etc. Some studies have also claimed that these components increase the risk of breast cancer, prostate cancer, pains, metabolic disorders, etc. They also cause issues to women and impaired health, including obesity, endometrial hyperplasia, recurrent miscarriages, sterility, and polycystic ovarian syndrome 
 Ram Proshad 1, Tapos Kormoker, Md. Saiful Islam, Mohammad Asadul Haque, Md. Mahfuzur Rahman, Md. Mahabubur Rahman Mithu, 2018, Toxic effects of plastic on human health and environment: A consequences of health risk assessment in Bangladesh.
The heart of our business model is the value proposition, which solves the health troubles caused by conventional plastics. This value is the key to generate our revenues.
The final products consumed by public consumers are the bioplastic goods made from the above resources. At the initial phase, we focus on food boxes, bottles and zip bags. The reason is that they are common, must-have items in our daily life. Also, they directly affect the food and drink we consume so this material-improvement will have a remarkable impact on people’s health. Moreover, at the early stage, we choose items with simple shapes so that we do not waste our resources. These are the perfect solution for people’s pains of using harmful products.
AC-COOL’s value proposition is to serve customers who are concerned about the health conditions of themselves and their family and indeed they are also aware of the harmful effects of petroleum plastics on human health and environment.
- CUSTOMER SEGMENTS
Who are the people benefiting from our value proposition and willing to pay? According to Hoang Van Hai and Nguyen Phuong Mai (2013), they investigated consumers’ intention to buy eco-products and it is proved that the intention to buy eco-products depends on the levels of education. The results presented 66.7 percent of postgraduates report that they always intend to buy eco- products while only 14.4 percent of secondary school graduates have the same intention .
Based on this research and our own analytics and understanding of Vietnamese customers’ characteristics and behaviors, we choose the segment of adults aged 25 – 50. These are the people who are financially stable and have a high awareness of social benefits and long-term values. They are people who are highly concerned about the health conditions of themselves and their family. Besides, they are people who regularly use social networks, update information and have the ability to influence the habits of their families and communities.
In addition, the subjects from 25-50 is a very large customer base and they are also the main consumers of products related to family health. According to Government Statistic Office of Vietnam, the percentage of people aged 25 – 50 nationwide in 2007 is 42,9% .
 Hai, H. V., & Mai, N.P. (2013). Environmental Awareness and Attitude of Vietnamese Consumers Towards Green Purchasing. VNU Journal of Science: Economics and Business.
 General Statistics Office Of Vietnam.
- CUSTOMER RELATIONSHIP
We interact with our customers in several ways:
With plastic products users, we use the sales method, which helps them better understand by introducing further information than what marketing tells them, thus close more deals, and create profits for both sides.
With the community, we collaborate with them so as to create the steady unity, which means raise people’s awareness about how much danger petroleum plastics brought to the environment and to everyone’s health so that they can tell others and others.
With farmers, we nurture the relationship in many ways. Some of them are giving away presents from our production process, holding small meetings to talk about the environment and health, joining them on their lands and fields. The main purpose is to provide them with the necessary knowledge about this aspect as well as to maintain a stable material source for manufacturing.
For end-users who directly use our plastic products, we deliver the final product to them through direct retail online and retail distributors.
For the customer group who are farmers, the value we deliver to them is the process to help them handle the agricultural waste. We persuaded them to provide agricultural waste to us through government and local organizations like agricultural cooperatives.
In order to convey value to the community and attract investment from social funds, we will reach them through online mass media as well as fundraising events.
- REVENUE STREAM
Firstly, cashflow comes from customers who buy our final products (bioplastic boxes, bottles and bags). Concerning the increasing demand for plastic and the large market size of customer segments, this is defined to be the primary and sustainable revenue stream of AC-COOL project.
Secondly, revenue is gained from social investors who believe and invest in our business with considerable funds. We call for funding from several NGOs and companies and we hold a strong belief that the values we share with these parties will appeal them to invest in our social enterprise. The investment forms might vary from financial support to labored support and material/chemical support.
- COST STRUCTURE
We divided the cost into two categories: fixed cost and variable cost.
Fixed cost includes infrastructure, R&D activities. Our project has a big expenditure charging by factories and manufacturing operations. Therefore we need to invest a lot of resource in building facilities, purchasing machines. Moreover, we also have to continually improve scientific technology in the laboratories.
Variable cost includes labors, materials and inbound logistics. In terms of production, AC-COOL project has to spend capital for 3 of the above purposes. Depending on the scale of the factories, those 3 factors might be changed. Therefore, the labors to work in the factories, the materials of all steps in the process and the inbound logistics to deliver goods from one step to another are all changeable figures.
In general, we have 3 innovative points in our business model:
1, New social value proposition:
We make use of biowaste problem to solve the plastic problem, by converting biowaste into bioplastics to replace petroleum plastics.
2, New business value proposition:
New bioplastics products, which is 100% made of bioplastics, is introduced. At the early stage, we might not be able to compete with products’ appearance. Therefore, we use our material and benefits for health as our unique selling point when introducing to our customers.
3, New key resource:
We have a newly presented catalyst, which is a key to unlock the power of the whole process. Its name is AC-COOL. AC-COOL not only reduces the cost of manufacturing but also prevents harmful chemicals from being released to the environment and incurring even more troubles.
III. COMMERCIAL POTENTIAL
According to European Bioplastics’ annual market data update, the bioplastics market will grow about 20% in the next 5 years. The capacity in 2018 was 2.11 million tonnes and is expected to raise up to 2.62 million tonnes in 2023. Although bioplastics market only represents only 1% of the total market, with its continuously fast growth, it will reach a higher number in the near future.
Bioplastics are used in an increasing number of markets. Among them, packaging remains the largest field of application for bioplastics with almost 65 percent (1.2 million tonnes) of the total bioplastics market in 2018. Therefore, our product portfolio mainly consists of packaging products such as food containers, bottles, zip bags,…
Furthermore, Asia is a major bioplastics production hub. In 2018, 55 percent of bioplastics were produced in Asia, which gives Asian enterprises more chances to innovate and have a good position in this bioplastics market.
According to 483 surveys we have spread recently, when being asked about the factors affecting their purchase decisions, 41.6% of the answers are “really affect” and 45.8% are “affect” for the option “protect health”, showing that people care the most about health when choosing goods, especially goods related to foods and drinks. Also, “eco-friendly” ranks second in this question with 29.2% “really affect” and 33.3% “affect”.
In another question about the features they prefer of plastic products, the top answers relate to these features in sequence starting from the highest one: stability, force resistance, heat resistance, biodegradable, etc. The numbers are as follows respectively: 79.2%, 75%, 70.8%, 54.2%.
Through the survey results, people’s awareness about bioplastics and their characteristics, as well as conventional plastics’ disadvantages, is very significant. This means that our target customers do have desires about new material to replace hazardous petroleum plastics and are willing to approach to new products as long as the quality is authentically good. Therefore, we do have opportunities to develop bioplastic items with these supportive customers in the near future.