Paper Producers Breathe a Sigh of “Releaf”
With their rich and vibrant colors, autumn’s leaves captivate people’s imaginations. Yet while many of us are marveling at autumn’s beauty, 21-year-old Ukrainian student-turned- entrepreneur Valentyn Frechka is busy calculating how much cellulose fiber he can extract from the tons of leaves that fill residential areas, city parks, and sidewalks every year.
Frechka stumbled upon a method for transforming cellulose from fallen leaves into paper during a high school experiment when he was 17. He later perfected the method working in a cardboard factory in western Ukraine, where he made what is believed to be the world’s first industrially produced paper from fallen-leaf fibers.
In 2021, he founded Ukrainian startup Releaf Paper, which produces cellulose from fallen leaves using the technology Frechka has patented.
Releaf then supplies the cellulose to existing paper mills and packaging producers in Ukraine who produce paper bags and wrapping paper from the fibers. The goods are then sold to customers like beauty giant L’Oreal and consumer-goods retailers such as Samsung Ukraine and Schneider Electric.
Using plants to make paper is nothing new. Materials like papyrus, hemp, cotton, straw, and jute have all been used, but most paper production today uses wood pulp from trees. According to Canopy, an NGO that campaigns to protect forests, some 3.2 billion trees a year, approximately 342,465 trees an hour, are cut down to make paper packaging.
Every ton of paper created from fallen leaves can save 17 trees, Releaf says. Paper made from fallen leaves produces 78% less carbon emissions than traditional methods and uses less hazardous chemical compounds. It also biodegrades more easily than paper made from wood pulp.
“We’re creating a new business infrastructure from an existing raw material,” says Frechka. “Fallen leaves [come from] a natural process. We don’t need to grow or cut down anything.” The fallen leaves Releaf Paper uses are collected from residential areas, city parks, and sidewalks, and can be transported to Releaf’s factory at no cost to the shipping party.
To finance small-scale production of extracting cellulose from fallen leaves, Releaf has relied on grants totaling more than $206,000 from the World Wildlife Fund, the European Bank for Reconstruction and Development, and the Google for StartUps Ukraine Support Fund. Releaf hopes to get a full grant from European Commission programs for developing sustainable startups before tapping banks, angels, and VCs for investment.
Frechka and co-founder Alexander Sobolenko, the company’s chief business development officer, spoke with This Is Capitalism about their plans for scaling Releaf Paper, and how capturing even a small percentage of the global eco paper market will enable them to have an impact on the environment.
TIC: Could Releaf Paper ultimately stop wood and other unsustainable products from being widely used in paper production?
Frechka: No, because the total world market for cellulose from wood is billions of metric tons. We cannot replace all of this as it is used not only to produce paper, but also for pharmaceuticals, hygiene, and other products. So, we are only focused on capturing 1% to 5% of the global market. It’s a very little percentage, but in tons it is huge. For example, to produce one ton of paper requires 2.3 ton of fallen leaves, which replaces the wood pulp from 17 trees. Just imagine if we have 10 fully automated factories producing more than 100,000 tons of cellulose from fallen leaves. The impact in saving trees is very visible.
Sobolenko: Currently, the global market for eco packaging is estimated at around $300 billion and will reach $470 billion by 2027. We will be glad if we earn just 1% of the market, but we will need at least 10 factories.
TIC: How did you two first meet?
Sobolenko: In 2021 I learned about Releaf Paper from the media. I’m a serial entrepreneur and had just sold my last company, which traded and exchanged smartphones, so I was looking for a new project. From the beginning I thought it should be my own, but when I learned about Releaf Paper I was so excited by the idea I wanted to be a part of it. I contacted Valentyn, but he did not respond for half a year.
I contacted his former partner and introduced my expertise. Finally, Valentyn responded. We met in Kyiv. He was 20 years old then, trying to run a potentially $1 billion company on his own. I said to him, “How are you going to do this?” His plan was to create an internet shop and handle selling and shipping himself. I said, “I have some experience. Let’s try and do this together because you will not succeed alone.” I took over the business part so he could concentrate on technology development.
Frechka: I know how to produce the technology, but Alexander knows how to sell it to investors and society, and explain why they need it.
TIC: How did you develop the idea for Releaf Paper?
Frechka: I was 17-years old and had a very ambitious chemistry and biology teacher. In 2018, my teacher and I were trying to find some interesting projects which we could present and develop at the Junior Academy of Science of Ukraine.
In one chemistry lesson we learned about cellulose polymers. We didn’t start out thinking we want to produce paper from fallen leaves. First, we tried to convert the wheat straw biomass into a fiber and then produce paper from it. But this technology already existed. So, one day I offered to my teacher to use grass. When we collected the grass for this experiment, I said to my teacher, “Why can’t we use fallen leaves?” At the time it was autumn, and near our school big oaks were growing. We collected fallen leaves and started to do some experiments, turning them into a fiber, and boiling it in different chemical re-agents.
To get the first cellulose sample took three months of experimenting in my kitchen at home and in the laboratory at school. When we got the first fiber from the fallen leaves, I did some open-source research to see if any other scientist had isolated this type of fiber. I couldn’t find anything. It was at that point I thought, “Wow, we can be the first in this field.” I thought that the Junior Academy of Sciences of Ukraine would give me some opportunities to present this not only in Ukraine, but abroad.
In 2019, I presented the project at [school science] Olympiads in Tunisia, Kenya, the U.S., South Korea, Poland, France, Serbia, and Canada. When people heard about it, someone said, “Do you think this research work could be transformed into a startup?”
I just was focused on the research and thought that I’d be a scientist, not a businessman. But after all these Olympiads I decided to find people who thought the same as me and who could help me develop it into a startup. I want to do something that can help make this world a better place, but also earn money doing it.
TIC: How challenging has it been to transform your science project into a successful business?
Frechka: It was difficult. We were in a country where the paper and cellulose industry is not developed to a very high level. The industry in Ukraine is just recycling wastepaper into new paper. But we are a company with a full-cycle production, from the biomass [leaves], to the fiber, and the final product. It was very difficult to find equipment for the laboratory and pilot production tests. We spent more than two years just to confirm all the stages of our technology.
Then it was difficult to explain the idea. We had a lot of haters. They said, “Why do you need this? We have paper produced from wood and it is fine.”
Also, raising money where you need to spend a lot of time developing the first prototype, finding the client, and selling it to them – it’s very difficult to find someone that believes in you. But I always say I am doing what I know, with what I have, and where I am.
TIC: How did you get your first customer?
Sobolenko: L’Oreal heard about us on the radio and found our website. They wrote to Valentyn, but he did not respond. Fortunately, I got access to his mailbox and found this request from L’Oreal Ukraine’s operational director. We arranged a meeting. They loved our idea and wanted to buy something from us. We offered them wrapping paper. After this Schneider Electric contacted us. They wanted paper bags to use for corporate gifts.
Currently, we have about six main customers for our online products. Our turnover for 2021 was €165,000, but for most of 2022 our local customers had other issues to deal with due to the war in Ukraine. So, we started to think about European markets. We launched our internet shop for the EU and the UK in September. We have a warehouse in Slovakia for shipping Releaf paper bags. Any retailer is our potential customer, especially if they care about sustainability.
TIC: What are your plans for growing and scaling the business further?
Frechka: We have two models for scaling the business. The first is where we have a pilot production line, outsourcing production of the paper and collaborating with cities which supply us with the fallen leaves.
The second model is a joint venture where we collaborate with existing paper producers, but we establish near their main production our factory, which produces for them just the cellulose.
We are looking to establish a pilot production line with the capacity to produce 10,000 tons of cellulose a year. We currently produce cellulose, but on a very small scale. We have some customers in Europe waiting for us to produce larger quantities.
To establish the pilot production line will cost around €3.5 million ($3.6 million). The equipment to do this does not exist already so we need to develop it. We produced some of the equipment in a laboratory pilot in Ukraine where we tested our technology before registering an international patent. But the €3.5 million will cover the cost of personnel, equipment, water, electricity, and all other expenses for establishing this type of production.
TIC: What advice would you give to other young entrepreneurs looking to develop their idea into a business?
Frechka: If you want to do something, do it, irrespective of what other people tell you. In setting up Releaf a lot of people told me, “Stop doing this. Stop wasting your time.” In my Ukrainian University, my professors tell me I’m focusing too much on Releaf. But it doesn’t matter. You need to do what you want.
I want to create something for the world. Releaf is the place where I can do this. In my free time, on weekends, I’m continuing my research.