Anchoring envirotech
From SCAN's Print Edition

If the Ottawa region is to play Doyle%2C%20Denzil-120X185.jpga meaningful role in the environment industry, it will have to produce the equivalent of a Mitel or a Cognos or a Newbridge somewhere along the way. Such companies not only serve as important role models to entrepreneurs and investors, they also provide anchors for the industry in much the same way that large retail outlets provide anchors for shopping malls. While it is difficult to identify such a company at this time, there are some indications of what the most promising technologies are likely to be. A safe bet is rapid thermal processing (RTP), which is the technology being exploited by Rod Bryden’s Plasco Energy and by Bob Graham’s Ensyn Technologies. It is based on the principle of exposing waste products to very intense heat that converts them into their component parts, namely liquids, solids, and gases. The liquids and the gases can be useful byproducts, while the solids usually take the form of a small amount of ash. In the case of Plasco, the input is garbage, while in the case of Ensyn, it is any form of biomass, such as the bark of a tree.

What is so exciting about RTP is that it can produce many different products and those products can address many different markets. In the case of Plasco, the initial product will be energy, while in the case of Ensyn, plants are already in operation in the U.S. that produce such products as food flavouring (yes, from the bark of a tree) and several marketable chemicals. A portion of Ensyn was sold to Ivanhoe Energy a couple of years ago to develop a system for reducing the viscosity of heavy oil so that it can be transported in conventional oil pipelines.

The other part of Ensyn recently built a plant in Renfrew to take waste products from the Ottawa valley forest products industry and turn them into phenol for manufacturing plywood. While such plants will not create large numbers of jobs, the jobs that they do create will be very technology-intensive and the potential for upstream and downstream supply opportunities will be enormous. The economic development people in Renfrew would be well advised to keep an eye on the operation.

The interesting thing about both sides of the Ensyn operation is that they are really energy companies that just happen to solve environmental problems as well. As I stated in an earlier article, it is very difficult for investors and entrepreneurs to find information on the environment industry because there is no such thing in the North American Industry Classification (NAIC) system. This makes it difficult to deal with such issues as the impact that a new environmental government initiative is likely to have on a particular company. Unfortunately, we live in an era where everything has to be identified and quantified before money is placed on the barrelhead and this could be a problem in building a Canadian environment industry.

The people who insist upon such quantification should remind themselves that there were no NAIC codes around when Computing Devices of Canada was launched in 1948 or when Mitel was launched in 1974. The entrepreneurs may be better advised to go after angel investors as opposed to venture capital companies for their early stage capital, because VC companies insist on precise industry data. Hopefully there are enough angels around who can assess the ability of entrepreneurs to succeed and, as an environmental industry develops, the venture capital industry will re-tool itself so that it either accumulates its own data or learns to live without it.

Guru in one guise, angel in another, Denzil Doyle is a member of the Order of Canada, a professional engineer, former CEO of Digital Equipment Corp. in Canada, company director, mentor, consultant, investor and author of the best-selling ‘Making Technology Happen’. He can be reached at ddoyle@doyletechcorp.com.

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