UM research launches environmentally friendly chemical company
Everyone likes good chemistry. Take the sizzling kind between two people in love, or the brainstorming among co-workers that generates brilliant ideas. When it comes to Rivertop Renewables, the hottest sustainable startup business coming out of Missoula, good chemistry is the key to success.
Start with pragmatic chemist and inventor Don Kiely, who retired from The University of Montana in 2008. Add a team of Ph.D. chemists with strong ties to Missoula and Kiely’s work. To run the new company, invite a motivated community organizer, who happens to be Kiely’s son, Jason. Find a talented company president specializing in startup companies. Mix in high-level support from UM, the Missoula business community and U.S. Sen. Max Baucus, who played a key role in securing millions in financing for the new company to grow in Missoula.
The result? Rivertop Renewables is on its way to becoming a globally significant force making clean, green chemicals to replace phosphates that pollute waterways and petrochemicals that show up in everything from plastics, paints and flooring to aspirin, clothing and electronics.
Within the next year consumers will start reaping the rewards of the new progressive technology in sparkling clean glassware and effective de-icers on roads. The secret lies in the wondrous properties of glucaric acid and its related polymers, both made from glucose, one of the most available and environmentally benign resources around. Corn is the No. 1 glucose source in the U.S.
The reason Rivertop is on a fast track to commercial success stems from Kiely’s patented oxidation technique to make glucaric acid that is efficient, inexpensive and wastes nothing. Glucaric acid is listed by the U.S. Department of Energy as one of the top 12 chemicals of the future made from renewable resources.
“If you’re going to do something on a large scale, you want to find a material that’s the cheapest, the most available and a resource you can count on,” says Kiely, who at age 74 is lean and lanky, with a friendly demeanor and the patience to explain complex chemistry to the layperson. When he tells the story of the research leading to Rivertop, it’s clear he has long been a chemist ahead of his time. Kiely saw the flaw in traditional chemistry that makes long-lasting chemicals, allowing tennis shoes to sit 600 years in a landfill before decomposing. He focused instead on short-lived chemicals that would be renewable, biodegradable and harmless in watersheds and soils.
For Joe Fanguy, director of UM’s Office of Technology Transfer, the big news is that University research has led straight to high-paying jobs in Missoula. And those jobs are in a company that’s offering sustainable solutions to worldwide problems. Today, Rivertop Renewables has 16 mostly local employees. That should double over the next two years and continue to rise.
“The economic development piece excites me the most,” Fanguy says. “The general taxpayer wants to know, where is my payback on research?”
Each year, UM brings in about $70 million in research funding, with about $50 million coming from federal sources. When research leads to a new business with growth potential in Missoula, the payback is clear, Fanguy says. UM stands to gain, too, both from the royalties it will receive as the company turns a profit and in the educational opportunities for students who can serve as interns and be part of something big.
“Rivertop is a wonderful example of a company built upon the transfer of ideas from a University laboratory to the private sector,” says UM President Royce Engstrom, who happens to hold a doctorate in chemistry. “This is exactly the kind of business development and job creation we need in Montana.”
In spring 2011 the then-3-year-old company attracted a U.S. Economic Development Administration grant awarded to the Montana Technology Enterprise Center (MonTEC), which houses Rivertop and several other startup businesses. Former Missoula Mayor Mike Kadas and Baucus stepped up to help secure the grant. The University committed $1.75 million as a required match to tally $3.5 million.
The grant funds the expansion of MonTEC as a semi-works facility for Rivertop to produce glucaric acid, as well as advancing its related polymer technology. The company will contribute up to $2.5 million in private funds to equip the facility.
The grant is a win-win result for UM, Fanguy says. “Rivertop needed to grow, and MonTEC needed a new business plan.”
In November, Rivertop also secured a $1.5 million investment from Cultivian Ventures, an Indiana-based venture capital fund focused on technology opportunities in food and agriculture. Cultivian co-founder Ron Meeusen has joined the Rivertop board, bringing 30 years of experience in taking new technologies and products to market.
Behind the capital improvements and the hoopla over new jobs lies that good chemistry – from the sustainable solution to the people who are taking it forward. The story begins with Don Kiely’s arrival at UM in 1997, after 29 years as a professor at the University of Alabama in Birmingham, where he specialized in carbohydrate chemistry.
Kiely attracted several doctoral students, including Tyler Smith, who today directs research and development for Rivertop Renewables. Smith points out that many chemistry graduate programs are theoretical or dedicated to pharmaceutical drugs, a field that didn’t interest him.
“I was drawn to Don’s research by the real pragmatism,” Smith says. “He wanted to make commercially relevant and environmentally friendly products that could turn into a business.”
As director of UM’s Shafizadeh Rocky Mountain Center for Wood and Carbohydrate Chemistry, Kiely was able to take the pivotal step in his research using simple sugars and converting them into their diacids, particularly glucaric acid. Chemists have known how to make glucaric acid from glucose using a nitric acid process since the late 1880s.
“The patent literature for glucaric acid gives you a sense of the potential,” Kiely says. “There are hundreds of variations, but they were never realized on a commercial scale.”
Kiely wanted to invent a new process for making glucaric acid that would take the genius substance off the shelves of academia and into the marketplace. As far as patents, he’s got 12 of his own.
The question that guided his UM work was this: “Could I delve into the oxidation technology and design a process that would be transferable to a commercial scale?” He pursued the answer and attracted funding, University support and excellent graduate students.
And he solved the problem.
The old way of making glucaric acid was both wasteful and expensive. For every 100 pounds of glucose, only 59 pounds of glucaric acid resulted. To produce it took large quantities of nitric acid, with very little recycling.
“Now, we’re putting oxygen into the process,” Smith explains. “We regenerate our nitric acid as it is being consumed in the same pot as the oxidation. We are left with a product mixture that is glucaric acid and the nitric acid we started with. We have a process to remove the nitric acid and use it again.”
Instead of 59 pounds of product, they can generate 144, starting with just 100 pounds of glucose. Kiely patented the process and a second related effort in polymer technology.
Glucaric acid is the starting material to create new polymers (large molecules with repeating structures) with various combinations of A molecules connecting to B molecules.
“When you have four or five of the A component and a dozen of the B component, you can mix them into any combination that you want in effect,” Kiely says.
The key green quality is that the glucaric acid segments come from sugar, so they help the polymers biodegrade in the environment. Those polymers have promising applications for short-life applications that replace petrochemicals, from better adhesives and absorbents to fertilizer delivery agents.
After UM patented the oxidation and polymer processes, it was time to license the technology. That’s where UM’s Office of Technology Transfer has played a vital role, starting with Fanguy’s predecessor Tony Rudbach, who suggested Kiely start a company.
“My intention was to retire at 70, not start a company,” Kiely says, “but there wasn’t a choice. So we came with the platform and the platform technologists. If they hadn’t come we could never have done it. We all had the same vision.”
So much has happened that Kiely says it feels like 20 years, not four. His son Jason was soon joined by businessman Jere Kolstad, who became the president and CFO. Kolstad came to Missoula via Seattle, but hails from Glasgow.
“I’m a startup guy,” says Kolstad, a large garrulous man with a ready laugh and a barrel full of enthusiasm. “It’s really rare to see the kind of potential this company has, and that’s why we are attracting venture capital.”
He points out that industrial companies won’t pay more for green products, so the key is to be competitive.
“If you get the same performance at the same cost, the tie will go to the green product,” Kolstad says. “We have to win the cost battle and we are there.”
It’s also rare to see how fast the product is going to market. Kolstad expects Missoulians will benefit from the product next year every time they twirl a wine glass between their fingers at a restaurant or pick up a shiny plate in the University cafeteria.
Detergents likely will be the first major application of glucaric acid as a replacement for phosphates. The target market will be automatic dishwasher detergents for consumers – a multimillion dollar industry.
The timing couldn’t be better. Phosphates now are banned from dishwasher detergents, and for the past year companies have scrambled to find an affordable substitute that will work as well. Until now, they have failed.
Glucaric acid is the ideal cleaning agent, Smith explains. It serves as a builder that captures magnesium and calcium found in hard water and then prevents them from forming soap scum.
“We spend a lot of our research time washing dishes,” Smith says with a grin. The laboratory has three dishwashers that test various levels of hard water and how well the glucaric acid performs.
The other key market for Rivertop is in the field of corrosion inhibitors. That may sound less jazzy to consumers, but not when you consider that one application is in de-icing – whether at the level of highway departments salting roads or residents salting their sidewalks.
Salt melts ice, but it rusts vehicles and bridges. To combat that problem, industries have switched from rock salt to a brine solution combined with a corrosion inhibitor. The problem lies in the inconsistency and handling expense of corrosion inhibitors available today. Now the company has contracted with the Montana Department of Transportation to supply 110,000 gallons of a bio-based corrosion inhibitor.
Rivertop, once again, is showing its product works efficiently, cheaply and without any negative impact on the environment. And that’s the beauty. The results come from a process that’s straightforward, relies on one of the most common substances around (glucose) and can be produced on a large scale. It sounds easy, but the success today is a result of countless hours in the laboratory.
“The most challenging research you can do is to make something as simple as possible,” Smith says.
That might serve as a good reminder for anyone in search of that elusive “good chemistry.”
— By Deborah Richie
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