Cathie Anderson: Micromidas plans to turn cardboard into oil substitute

02/05/2013 12:00 AM

02/05/2013 8:00 AM

Chemical engineer John Bissell is preparing for the day when the people of Chindia consume plastic bottles, polyester clothing and other goods the way that everyone in the United States does.

Just where is Chindia, you might ask? It's China and India, a portmanteau name believed to have been coined by a member of the Indian Parliament. It's often used when describing the economic and political force of these two fast-growing, rapidly evolving neighbors.

The countries are home to roughly one-third of the world's population. Can current raw materials meet their surging demand?

"The quantity of oil is dropping, but more significantly, the demand for products made from petroleum, natural gas and those sort of things is increasing dramatically, and it's not going to stop, " the 27-year old Bissell told me, adding later, "There's huge upward demand pressure and there's upward supply pressure. That's where we would like to come in with our product."

Bissell's company, West Sacramento-based Micromidas, has pioneered a process that takes corrugated cardboard and converts it into a chemical that is used to make plastic bottles.

This chemical, known as paraxylene, normally comes from oil. Consumer products companies such as Procter & Gamble or Coca-Cola can tell you that demand for it is already causing huge price swings.

"Consumers don't feel it yet, but they will because eventually these guys are going to have to start passing along their price increases," Bissell said, "so there's a lot of demand by consumer products companies right now to have new technologies which particularly can reduce the volatility in the prices of these products that they use."

"Coca-Cola, last year," he added, "they reported losing something like $800 million just in unexpected (price) volatility, so they'd projected for a certain amount of volatility, and the volatility in excess of that cost them a billion dollars. Even for Coca-Cola, that's a lot of money."

Bissell and his partners Ryan Smith and Casey McGrath began working on their conversion process while students at UC Davis. They have raised about $23 million from venture capitalists who think the $40 billion paraxylene market is ripe.

By year's end, Bissell said, Micromidas hopes to have its first demonstration plant online. Micromidas must prove that its lab process can produce tons of paraxylene each day.

Screen-age retail tactics

The sign at the cash register inside It's a Grind gave Folsom's Bonnie Williamson a chuckle, and she had to share it with me: "Cell phone use at register will open the trap door you are standing on."

Williamson, a retired teacher, arrived at the coffeehouse on Blue Ravine Road in Folsom right after she stood in line beside a distracted cellphone user at another store.

Technology is a double-edged sword. Retailers say customers miss questions and cues while fiddling with their cellphones. Prom dress retailers note that teenagers try on dresses, then order them online.

Author and consultant Robert Spector, who wrote "The Nordstrom Way," "The Mom & Pop Store" and 18 other books, talked to me by phone from his office in Seattle about these trends.

"We like all that technology is, all that it gives us, but on the other hand, we don't like all the stuff that it gives us," Spector said. "The thing that I always tell my clients is put yourself in the place of the customer. If you were a customer standing in line at your place of business, what would you want to see that would keep the customer from going right to the cellphone?"

Definitely use humor and empathy. Connect with customers to fight "showrooming," visiting stores for the hands-on experience but then buying online.

List how your prices compare with online retailers. Ask customers you rescued from online disasters if they will write a letter and pose for a picture to accompany it, and then post it in a dressing room. Also, use letters to let customers know how many employees and contractors benefited from their local purchase.

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