Segetis gets deep-pocketed investors

  • Article by: NEAL ST. ANTHONY , Star Tribune
  • Updated: September 2, 2012 - 12:50 PM

"Green chemistry" pioneer based in Golden Valley is looking for a second plant to manufacture cleaning solvents and plasticizers.

CEO Atul Thakrar of Segetis is a chemist and a veteran of a quarter-century in the chemical industry.

Segetis, one of the country's emerging "green chemistry" companies, is poised for significant growth thanks to recent customer acquisitions and additional capital.

"With the customers and funding we now have, we can ramp up production and market development," said CEO Atul Thakrar, a chemist and 25-year veteran of the chemical industry. "Our goal is to grow and become cash-flow positive.''

Segetis develops and manufactures plant-based resins that supplant the petroleum used in cleaning solutions, plastics and synthetics.

"We deliver performance first,'' said Thakrar. "Our product works better, and it takes less of it to do the job. And then, I say, 'OK, by the way, we're also bio-based' and for many customers that helps them position themselves in a 'greener' light."

In recent weeks, Golden Valley-based Segetis has:

Quietly raised $25 million, its fourth and largest round of capital, led by Saudi Basic Industries Corp. Ventures (SABIC) and participation by existing investors Khosla Ventures, Malaysia Life Science Capital Fund and Royal DSM. The company has raised a total of $60 million over several years.

Started to look for a second manufacturing plant so it can increase its capacity beyond the 3 million pounds annually of cleaning solvents and plasticizers it makes from biomass materials like corncobs and wood chips that go into name-brand manufactured products. Segetis plans to increase employment in Golden Valley and at a small plant in rural Wisconsin by 20 to 36 percent over the next few weeks, even before it acquires or builds another plant, probably by early 2013.

Struck a deal with big Georgia Gulf Corp., the maker of chemical compounds and building materials, to develop renewable materials to help customers meet their sustainability goals through a flexible vinyl compound based on Segetis-developed "bio-plasticizers."

Hans Kolnaar, managing director of SABIC Ventures, said "Innovative materials are critical to the evolution and success of the specialty chemicals and polymers industry. Segetis has game-changing technology with the capability to deliver those breakthrough solutions to the market."

William Doherty, vice president of vinyl compounds at Georgia Gulf, said: "The addition of the specialty bio-based plasticizers from Segetis expands our sustainable product portfolio and underscores our commitment to offer a range of solutions ... that are free of phthalates and heavy metals."

Phthalates are chemical softening agents that have been banned from products such as children's toys and teething rings because of leaching.

The Segetis bio-based plasticizers are rooted in cellulosic-based chemistry, considered nontoxic, and function just as well or better than the oil-based plasticizers they replace, according to Thakrar, a chemist and veteran business manager who joined Segetis in 2009.

Segetis also has struck a partnership with Seventh Generation, a maker of environmentally benign cleaning and paper products, and is expanding its partnership with San Francisco-based Method Products, which produces cleaning and laundry products sold by 35,000 retailers, including Target stores.

Method laundry detergent says it requires only two or three sprays of its detergent to clean a full load of laundry as opposed to the cup or so of Tide or other traditional detergents.

"Method and we are growing together," Thakrar said. "It's cleaning clothes in a more sustainable way. And Method gives you more bang for your buck and it takes less liquid and shelf space for retailers."

Last month, BioFuels Digest, the bible of the green-fuels business, published an article describing several multimillion-dollar investments in recent months in Minnesota that range from Segetis to next-generation ethanol and biodiesel plants that are producing more fuel from less corn and from waste oils and other waste products.

Meanwhile, last winter BioAmber, another bio-based chemical company, raised $30 million and announced collaborations with other producers to make catalysts for fuels. And BioAmber and Minnesota-based NatureWorks, which is rooted in Cargill Inc., announce plans for a joint venture to bring new bio-based polymers to the commercial market.

These and other ventures, rooted in our innovation and home-state feedstocks, have meant several thousand new jobs in oil- and gas-poor Minnesota.

BioFuels writer Jim Lane said the state's commitment to alternative fuels and bio-chemicals, combined with the cooperation of the agricultural and forest industries, has accelerated growth in the sector.

Neal St. Anthony • 612-673-7144 • nstanthony@startribune.com

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