August 22, 2005
Melting rocks | A new Baileyville company sees lots of promise in products made from volcanic rocks called basalt
By Taylor Smith
In early August, voters in Baileyville approved a $2.5 million bond package to fund the startup of Ecomelt, a new company founded by Meddybemps resident P.J. Wooding. The company's business is rocks ˆ specifically, volcanic rocks called basalt, which Ecomelt plans to melt into a variety of products, including a replacement for fiberglass and a material for use in the automobile industry. The bond package, according to Ecomelt spokesman John Wakin, will be used to get the manufacturing process up and running in the former Louisiana-Pacific mill in Baileyville.
Wakin, who covered for the press-shy Wooding during the town meeting preceding the Baileyville vote, says he can't answer questions directly related to the manufacturing process thanks to the proprietary nature of Wooding's design. But he's forthcoming about what he says are the product's many uses, and the environmentally friendly end product. And he's also willing to divulge certain details ˆ but not too many ˆ about the company's industrial contracts with companies such as Toyota and Honda.
According to Wakin, all that's standing between Ecomelt and many millions of dollars in fulfilled contracts is the site where the basalt will be melted. Negotiations between Ecomelt and Nashville, Tenn.-based Louisiana-Pacific for the latter's oriented strand board mill, which shut down in late 2004, are ongoing. To grease the wheels, Ecomelt garnered the support of Baileyville Town Manager Scott Harriman, who in early August wrote a letter to L-P asking the company to expedite its decision on the plant's fate. As this issue of Mainebiz went to press, there was no word on what L-P planned to do with the property.
Mainebiz scheduled a chat with Wakin shortly after the Baileyville vote to discuss the startup's plans. The following is an edited transcript of the conversation.
Mainebiz: So the big news is that the town approved the lending package. Was it difficult to convince Baileyville residents that the project was worth backing?
John Wakin: That's conduit financing, so we're using the town's credit rating [via the Finance Authority of Maine] to get lower loans in the three- to five-percent range. Ecomelt would be fully responsible for repaying the bond. With the prime rate going up ˆ the prime rate is above five [percent] ˆ that means a higher amount on your loans. So that saves us quite a bit right there. We wanted the town's backing, and also for them to put a little pressure on Louisiana-Pacific in order to sell [the building] to us.
What kinds of questions did you field at the town meeting? What were people concerned about?
Well, people wanted Baileyville people to be hired first. What I said is we are going to hire people qualified for the job, we can't discriminate and just hire all [the employees] from one town. You know, I was being honest with them about that.
Some of the other questions were whether there would be any environmental impact in the area. I said no, this is a clean and closed system and there's no toxic fumes or environmental [problems]. Basalt rock is a form of volcanic granite, and it is a natural-based product.
People [also] didn't understand the bond package, and didn't understand what conduit financing was. That confused a lot of them. In fact, Scott Harriman had to keep repeating it about six times to people that [the bond package] would not affect Baileyville in any way. Ecomelt would be fully responsible to repay the bond.
How many people total do you expect to employ at the facility?
We're keeping the numbers small; we're saying 400. We could see a lot more [jobs], but we don't want to put out false information or stuff. But we have so many orders in hand that once serious production is started, we have to start phase two, because we haven't got enough production capacity in phase one to complete the orders we have.
What does the product look like when it's complete?
This [product] can be woven into fabric form. I'll give you one example: The heat resistance of this product [means] it can be used in the inside of airliners. We've got automotive applications: Starting in 2005 in the European Union and also in Japan, at the end of an automobile's life cycle, you have to have products that are not harmful to the environment. Basalt rock is a natural product and there is no chemical reaction or anything. This is going to be replacing a lot of things in automobiles. We have contracts with two big automobile makers now, Toyota and Honda.
It is also going to be used for concrete reinforcement. This basalt fiber is resistant to acids and alkalis, sort of like fiberglass. It is a natural rock, and we have some orders now for concrete reinforcement for bridges. In the Northeast, where you use a lot of salt, it breaks down your steel rebar. Now our bridges last for 10 years; theoretically [the use of basalt] could allow for 10 times the length, and possibly more.
How many orders would you say the company has in hand?
Well, I can tell you we've got eight big orders right now, and they're in the millions of dollars ˆ more than enough to cover the loans for the startup and to get phase one going. We have orders for automobiles, passive fire protection, also emissions filtration. And soil stabilization ˆ we have orders in that category too, but I'm not familiar with that side of it because I haven't seen the contracts.
Basalt sounds like one of those miracle products advertised on T.V.
Basalt continuous filament is similar in nature to fiberglass; however, its mechanical properties include tensile strength and thermal tolerance that are 60% improvements over fiberglass. How many boats, especially in Maine, are made of fiberglass? And I don't know who you talk to, but different stories are out that say fiberglass is a cancer-causing agent or has been known to have been associated [with cancer]. [Basalt] is a clean product. We'll be working with probably the University of Maine through the research and development [program] to market this or get a patent on it.
Who says that basalt is stronger and more heat resistant than fiberglass?
These tests have been done. They've been around. We've got copies that are in our business plan that we'll be presenting to the state.
Basalt isn't something you hear about every day. How big is the basalt industry?
Right now, world production is 2.3 tons per year. It's very small, and the reason is that you've got 17th century technology. [Manufacturers are] using square, open hearths. All the plants are in the former Soviet Union or satellite [states] like Georgia. They're using these open hearth furnaces that are only 20% efficient. So you can see why the production is so low; most of their energy is going right up through the stack.
The system that P.J. has designed ˆ and it's been proven ˆ is going to be running at 90% efficiency, and it's a closed system. We're using electricity to melt the basalt rock. If you lose complete power when you're in operation, it takes 10 days for the furnace to cool down. That's how efficient it is. So there's going to be close security on this because [Wooding] hasn't patented this.
Why hasn't he patented the process?
I'll tell you why: because it would be stolen by the Chinese or the Russians. Any time you patent something, some of these other countries, they steal the design. They go in the patent office and get everything done and steal it. Mr. Wooding, he has 23 U.S. patents, but he has worldwide patents too.
Could he get a worldwide patent to protect the process?
The problem is, it would still get stolen. There's no safeguard when you patent something because your whole design and details are in the patent, and they steal them. He's had some of his other technologies stolen before. And you got all these other countries that don't adhere to our rules, and you lose it.
Can you tell me what other technologies have been stolen from P.J. Wooding?
I can't. He doesn't like to talk about them. But I can tell you that the Boeing 747 landing gear was designed by him.
So where does the basalt come from? It seems that a natural product with so much demand might be tough to find.
The basalt is going to be coming from Grand Manan Island [in New Brunswick]. Grand Manan is a volcanic island and is just about all basalt. We've had product tested from there to make sure of its purity and stuff like this, and we had it sent over to one of the operating basalt facilities in one of the former satellite countries of Russia. They ran some tests and it came out 90% pure. There's enough product at Grand Manan to supply us that we'd never run out.
We also had a geologist survey done on rocks in the state of Maine. Basalt is all over the coast ˆ heavy ˆ in the state of Maine. What we'd have to do is find it. We had [Thos.] DiCenzo, [a Calais-based contractor] who works on Route 9, bring us some samples. We haven't had a chance to have them analyzed yet, but Maine is loaded with [basalt]. We just have to get it tested and make sure it's going to run alright. We won't be doing that until we get into production.
What kind of jobs will be available at the Baileyville facility?
We're going to have weavers, we're going to have quality control people. As this thing comes out of the processing machine, it's rolled in spools. A lot of this is electronic, automated, but you need people to watch the spools. And a lot of the product won't be put on spools to be shipped out; it'll be in a thicker form and chopped up and put in mashed form that can be used in reinforcement in different materials. We have different thicknesses coming out at different times, so that means we have different applications and different people for each one. We plan to run [the facility] 24/7, so we're going to have to have constant production people. We're going to need mechanical engineers, electrical engineers, chemical engineers, CAD people.
Are you worried about finding enough skilled workers in Washington County to fill the kinds of jobs you're talking about?
If you're familiar with Domtar, they hire people from all over Washington County who drive to the mill, and we expect the same thing to happen. It's going to be a non-union plant, and we'll have health benefits and profit sharing.
What was attractive about locating Ecomelt in Washington County?
That was one of the factors that we went to the state on, because it's such a depressed county. They were willing to help us, providing we were going to have so many jobs. The reason Baileyville interested us is because of Louisiana-Pacific mothballing their plant. We can use one section of it to do phase one without doing anything. But for phases two and three, [L-P] has got their press and their equipment there, and they still haven't moved out. Under the terms that we're negotiating, we'll give them up to 15 or 16 months to get their equipment out of there.
What we'll be doing in phase one, we'll be doing more than the world capacity [of basalt] is producing now. We'll be doing 5,000 tons in phase one. That's talking three phases and more down the line in order to meet all the orders.
How are negotiations going with Louisiana-Pacific?
Since we've gotten press out on this, they're having the plant appraised this week. We're looking [to strike a deal with L-P] within three months because you've got winter setting in.
We feel that we have a time limit on these contracts. Like a lot of contracts, if you're not in operation or doing it by a certain amount of time, the contracts cease to exist. We want an answer [from L-P] hopefully within the next 30 days. And if we don't, then we'll build our own steel building and go that way. But then you're starting in the winter, and winter can be harsh up here.
Wakin, who covered for the press-shy Wooding during the town meeting preceding the Baileyville vote, says he can't answer questions directly related to the manufacturing process thanks to the proprietary nature of Wooding's design. But he's forthcoming about what he says are the product's many uses, and the environmentally friendly end product. And he's also willing to divulge certain details ˆ but not too many ˆ about the company's industrial contracts with companies such as Toyota and Honda.
According to Wakin, all that's standing between Ecomelt and many millions of dollars in fulfilled contracts is the site where the basalt will be melted. Negotiations between Ecomelt and Nashville, Tenn.-based Louisiana-Pacific for the latter's oriented strand board mill, which shut down in late 2004, are ongoing. To grease the wheels, Ecomelt garnered the support of Baileyville Town Manager Scott Harriman, who in early August wrote a letter to L-P asking the company to expedite its decision on the plant's fate. As this issue of Mainebiz went to press, there was no word on what L-P planned to do with the property.
Mainebiz scheduled a chat with Wakin shortly after the Baileyville vote to discuss the startup's plans. The following is an edited transcript of the conversation.
Mainebiz: So the big news is that the town approved the lending package. Was it difficult to convince Baileyville residents that the project was worth backing?
John Wakin: That's conduit financing, so we're using the town's credit rating [via the Finance Authority of Maine] to get lower loans in the three- to five-percent range. Ecomelt would be fully responsible for repaying the bond. With the prime rate going up ˆ the prime rate is above five [percent] ˆ that means a higher amount on your loans. So that saves us quite a bit right there. We wanted the town's backing, and also for them to put a little pressure on Louisiana-Pacific in order to sell [the building] to us.
What kinds of questions did you field at the town meeting? What were people concerned about?
Well, people wanted Baileyville people to be hired first. What I said is we are going to hire people qualified for the job, we can't discriminate and just hire all [the employees] from one town. You know, I was being honest with them about that.
Some of the other questions were whether there would be any environmental impact in the area. I said no, this is a clean and closed system and there's no toxic fumes or environmental [problems]. Basalt rock is a form of volcanic granite, and it is a natural-based product.
People [also] didn't understand the bond package, and didn't understand what conduit financing was. That confused a lot of them. In fact, Scott Harriman had to keep repeating it about six times to people that [the bond package] would not affect Baileyville in any way. Ecomelt would be fully responsible to repay the bond.
How many people total do you expect to employ at the facility?
We're keeping the numbers small; we're saying 400. We could see a lot more [jobs], but we don't want to put out false information or stuff. But we have so many orders in hand that once serious production is started, we have to start phase two, because we haven't got enough production capacity in phase one to complete the orders we have.
What does the product look like when it's complete?
This [product] can be woven into fabric form. I'll give you one example: The heat resistance of this product [means] it can be used in the inside of airliners. We've got automotive applications: Starting in 2005 in the European Union and also in Japan, at the end of an automobile's life cycle, you have to have products that are not harmful to the environment. Basalt rock is a natural product and there is no chemical reaction or anything. This is going to be replacing a lot of things in automobiles. We have contracts with two big automobile makers now, Toyota and Honda.
It is also going to be used for concrete reinforcement. This basalt fiber is resistant to acids and alkalis, sort of like fiberglass. It is a natural rock, and we have some orders now for concrete reinforcement for bridges. In the Northeast, where you use a lot of salt, it breaks down your steel rebar. Now our bridges last for 10 years; theoretically [the use of basalt] could allow for 10 times the length, and possibly more.
How many orders would you say the company has in hand?
Well, I can tell you we've got eight big orders right now, and they're in the millions of dollars ˆ more than enough to cover the loans for the startup and to get phase one going. We have orders for automobiles, passive fire protection, also emissions filtration. And soil stabilization ˆ we have orders in that category too, but I'm not familiar with that side of it because I haven't seen the contracts.
Basalt sounds like one of those miracle products advertised on T.V.
Basalt continuous filament is similar in nature to fiberglass; however, its mechanical properties include tensile strength and thermal tolerance that are 60% improvements over fiberglass. How many boats, especially in Maine, are made of fiberglass? And I don't know who you talk to, but different stories are out that say fiberglass is a cancer-causing agent or has been known to have been associated [with cancer]. [Basalt] is a clean product. We'll be working with probably the University of Maine through the research and development [program] to market this or get a patent on it.
Who says that basalt is stronger and more heat resistant than fiberglass?
These tests have been done. They've been around. We've got copies that are in our business plan that we'll be presenting to the state.
Basalt isn't something you hear about every day. How big is the basalt industry?
Right now, world production is 2.3 tons per year. It's very small, and the reason is that you've got 17th century technology. [Manufacturers are] using square, open hearths. All the plants are in the former Soviet Union or satellite [states] like Georgia. They're using these open hearth furnaces that are only 20% efficient. So you can see why the production is so low; most of their energy is going right up through the stack.
The system that P.J. has designed ˆ and it's been proven ˆ is going to be running at 90% efficiency, and it's a closed system. We're using electricity to melt the basalt rock. If you lose complete power when you're in operation, it takes 10 days for the furnace to cool down. That's how efficient it is. So there's going to be close security on this because [Wooding] hasn't patented this.
Why hasn't he patented the process?
I'll tell you why: because it would be stolen by the Chinese or the Russians. Any time you patent something, some of these other countries, they steal the design. They go in the patent office and get everything done and steal it. Mr. Wooding, he has 23 U.S. patents, but he has worldwide patents too.
Could he get a worldwide patent to protect the process?
The problem is, it would still get stolen. There's no safeguard when you patent something because your whole design and details are in the patent, and they steal them. He's had some of his other technologies stolen before. And you got all these other countries that don't adhere to our rules, and you lose it.
Can you tell me what other technologies have been stolen from P.J. Wooding?
I can't. He doesn't like to talk about them. But I can tell you that the Boeing 747 landing gear was designed by him.
So where does the basalt come from? It seems that a natural product with so much demand might be tough to find.
The basalt is going to be coming from Grand Manan Island [in New Brunswick]. Grand Manan is a volcanic island and is just about all basalt. We've had product tested from there to make sure of its purity and stuff like this, and we had it sent over to one of the operating basalt facilities in one of the former satellite countries of Russia. They ran some tests and it came out 90% pure. There's enough product at Grand Manan to supply us that we'd never run out.
We also had a geologist survey done on rocks in the state of Maine. Basalt is all over the coast ˆ heavy ˆ in the state of Maine. What we'd have to do is find it. We had [Thos.] DiCenzo, [a Calais-based contractor] who works on Route 9, bring us some samples. We haven't had a chance to have them analyzed yet, but Maine is loaded with [basalt]. We just have to get it tested and make sure it's going to run alright. We won't be doing that until we get into production.
What kind of jobs will be available at the Baileyville facility?
We're going to have weavers, we're going to have quality control people. As this thing comes out of the processing machine, it's rolled in spools. A lot of this is electronic, automated, but you need people to watch the spools. And a lot of the product won't be put on spools to be shipped out; it'll be in a thicker form and chopped up and put in mashed form that can be used in reinforcement in different materials. We have different thicknesses coming out at different times, so that means we have different applications and different people for each one. We plan to run [the facility] 24/7, so we're going to have to have constant production people. We're going to need mechanical engineers, electrical engineers, chemical engineers, CAD people.
Are you worried about finding enough skilled workers in Washington County to fill the kinds of jobs you're talking about?
If you're familiar with Domtar, they hire people from all over Washington County who drive to the mill, and we expect the same thing to happen. It's going to be a non-union plant, and we'll have health benefits and profit sharing.
What was attractive about locating Ecomelt in Washington County?
That was one of the factors that we went to the state on, because it's such a depressed county. They were willing to help us, providing we were going to have so many jobs. The reason Baileyville interested us is because of Louisiana-Pacific mothballing their plant. We can use one section of it to do phase one without doing anything. But for phases two and three, [L-P] has got their press and their equipment there, and they still haven't moved out. Under the terms that we're negotiating, we'll give them up to 15 or 16 months to get their equipment out of there.
What we'll be doing in phase one, we'll be doing more than the world capacity [of basalt] is producing now. We'll be doing 5,000 tons in phase one. That's talking three phases and more down the line in order to meet all the orders.
How are negotiations going with Louisiana-Pacific?
Since we've gotten press out on this, they're having the plant appraised this week. We're looking [to strike a deal with L-P] within three months because you've got winter setting in.
We feel that we have a time limit on these contracts. Like a lot of contracts, if you're not in operation or doing it by a certain amount of time, the contracts cease to exist. We want an answer [from L-P] hopefully within the next 30 days. And if we don't, then we'll build our own steel building and go that way. But then you're starting in the winter, and winter can be harsh up here.
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