Vadxx Building Plant to Make Plastic Waste into Fuel
AKRON, Ohio -- Every day the world’s oil reserves get smaller as the demand for energy grows. Vadxx Energy LLC, about to begin operating what it says will be the first-of-its-kind plant to run 24/7, sees that as an opportunity, not a problem. Petroleum might be a resource that can be exhausted, but plastic trash is seemingly inexhaustible.
The technology Vadxx has developed converts plastic waste to synthetic oil. “We’ve tested everything from tires to auto shredder residue, to sterilized hospital waste,” says Russell Cooper, Vadxx vice president of supply chain and marketing.
Cooper has spent the last three years lining up the feedstock for his company’s first plant. He’s found enough plastic waste -- 60 tons a day -- for the plant to be successful.
The plant is under construction on Waterloo Road in Akron. The city, foreseeing job creation and tax revenues, donated the vacant five-acre site.
Vadxx, which broke ground last summer, expects to make its first liquid next May or June. Once Vadxx reaches full production, 60 tons a day of plastic will be fed into the front of the plant and 12,000 gallons of synthetic liquid petroleum will come out the back.
“It’s like a well,” Cooper says. “But unlike wells, this never depletes.”
Asked if he foresees Vadxx building a second plant within the next five years, Cooper answers, “No.” But he’s quick to make management’s plans clear. “If this plant proves itself out in 2015 -- and we’ll know by the end of 2015 -- then we think five years from now you’re looking at 10 to 20 of these plants up and running.”
Vadxx feedstock comes through partnerships it has formed with recycling centers and companies that produce plastic waste. A company engaged in metal recovery that used to throw away the plastic jacketing would ship that scrap to Vadxx. “Sixty to 70% will be industrial waste,” says Cooper. The rest is ordinary trash.
Sixteen technicians and a smaller number of salaried staff will be employed at the plant. “Our head of operations would describe [a typical employee] as a high-level operator/low-level technician,” Cooper says.
The investment in the project is $20 million. Venture-capital firm Liberation Capital of Charlotte, N.C., is the sole funder.
To assure Liberation of the soundness of its business plan, Vadxx turned to Rockwell Automation, the world’s largest company devoted entirely to automation.
“From a Rockwell perspective, we were almost getting paid to vet Vadxx,” says Dave Knowles, an account manager at Rockwell. The relationship began three years ago when a Rockwell distributor was making the rounds at the Business Accelerator in Akron and bumped into someone from Vadxx.
The distributor left the Business Accelerator well aware that to proceed, Vadxx needed an engineering, procurement and construction management firm, a role Rockwell was happy to fill.
Rockwell studied Vadxx’s designs, made adjustments and helped the firm prepare an investment proposal.
“We had two years and three opportunities to say this was a bad deal,” Knowles recalls. But as time went on, he and his team became convinced the Vadxx business plan was viable. “We all felt confident about the Vadxx design,” he adds.
With Rockwell on board, Liberty Capital was reassured and it signed an agreement with Vadxx last Dec. 31.
The technology Vadxx is using was secured by its founder, Bill Ullom, an environmental consultant from Canton. “It was originally developed by the University of Wyoming and Amoco and at that stage was being abandoned,” Cooper says.
Ullom began testing various materials and finding ways to scale up the original bench-top apparatus. The best plastics, he found, are those made from pure forms of polyethylene and polypropylene. Seventy-five percent of both can be converted to synthetic oil.
“At the end of a 60-foot closed reactor, it will go through seven different zones,” Cooper says, where the plastic is “cooked, cleaned and cooled.” The melted plastic is converted to a vapor, which is condensed and cooled back to a liquid.
“Our target market is 85% to 90% diesel fuel --ultra-low-sulfur diesel fuel,” Cooper says. The only waste is a compacted carbon char and synthetic gas, “which we capture and recirculate back around to heat the process that runs the rotary reactor,” he says. The Ohio Environmental Protection Agency has given the plant its best rating for lowest possible emissions, he adds.
So why aren’t more such plants being built, Cooper is asked. “The reason these aren’t popping up everywhere yet, and I say ‘yet,’ ” Cooper replies, “is because historically here in the U.S. the cost of disposal has been pretty low. In Europe, where the cost is higher, this type of plant is more common.”
The next step for the company was finding buyers. Vadxx has letters of interest from Marathon Oil and the Akron-based Burch Thomas Oil Co.
“We’ve got an opportunity here,” confirms Sandy DiFiore, president of Burch Thomas, and the fuel’s low cost will allow him to lower prices. “Plus it’s recycled. There’s nothing better.”
Pictured: Sandy DiFiore and Russell Cooper stand in front of the Vadxx Energy LLC plant under construction in Akron. DiFiore is president of Akron-based Burch Thomas Oil Co., a potential Vadxx customer. Cooper is a vice president of marketing of Vadxx.
Copyright 2014 The Business Journal, Youngstown, Ohio.
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