U.S. Microbics Inc.
President:
Robert C. Brehm
Employees:
19
Revenues:
$18,900 for the fiscal year ended Sept. 30, 2000, at a net loss of $2.6 million
Headquarters:
5922-B Farnsworth Court, Carlsbad
Business:
Environmental biotechnology firm using its proprietary microbial technology and bioremediation patents to process microbes
When tourists arrive on France’s Atlantic coast this summer, they’ll be greeted by a familiar ambiance of white sand and beachside caf & #233;s.
And yet it was only 16 months ago that a river of heavy oil from the shipwrecked tanker Erika covered these beaches, rocks and the sea.
So what happened? A miracle? Hardly.
The contaminated sand was trucked away, the rocks were cleaned and ports of the region got a makeover in time for tourist season.
Meanwhile, Robert Brehm, president of U.S. Microbics Inc., an environmental technology provider in Carlsbad, is bidding to clean the 200,000 tons of sand the French government has stored away.
The idea is to dump U.S. Microbics’ proprietary microbes , a bacterial concentrate with an appetite for oil , onto the sand.
Bruce Beattie, president of U.S. Microbics’ Sub Surface Waste Management, Inc. unit, said the industry term for this complex process is “bio-remediation.”
It’s like washing dishes , “the act of cleaning up and bringing it to the original state,” Beattie said.
This low-impact form of biotechnology is highly effective, said Hans Nyhuus, owner of Nyhuus Environnement SARL in Nice, France. The firm specializes in finding solutions for environmental problems.
“We (have) sent the sand to U.S. Microbics to develop the right recipe for biodegradation,” said Nyhuus, referring to the process of cleaning the sand. “They brought down the pollution 56 percent in four weeks (in a laboratory study).”
Showing Merits Of Technology
Now Nyhuus is working to convince French officials of the merits of U.S. Microbics’ technology.
The cleanup of the oil-drenched sand could translate into a $5 million contract, he said.
And that would be welcome news for the 4-year-old Carlsbad “bug” producer.
During the fiscal year ended Sept. 30, U.S. Microbics reported sales of $18,900 at a net loss of $2.6 million.
But Brehm said since its 22,000-square-foot production plant in Carlsbad is now operational, he can focus more attention on marketing products.
So far, U.S. Microbics secured contracts worth $4 million this year, he said.
Applications for the bugs are ample. They include breaking down oil, diesel, arsenic, toxic waste and other water and soil contaminants.
For the technology’s original owner, Mery Robinson, however, this is the second time she has attempted the bug business.
Robinson ran a private firm called Xyclonyx. At the time, Brehm held a defunct public firm named Global Venture Funding.
Brehm acquired Robinson’s technology in July 1997 and created publicly held U.S. Microbics.
Bugs Applied To Oil Spill
Robinson herself inherited the patents for the bugs from her late father, George M. Robinson.
He developed the bugs in the 1960s and made headlines when he applied them during the 1969 cleanup of the massive oil spill of the coast of Santa Barbara.
After his death in 1983, Mery Robinson, a trained scientist, kept the bug business alive.
In 1992, she founded Xyclonyx but shortly after decided to shut it down to care for her mother, who had cancer.
The business partnership between Brehm and Robinson began in 1996 during a wine tasting.
When Robinson told Brehm she wanted to restart her bug business, he recognized there was money to be made.
It was simple, Brehm said: “I had a company and needed a technology. She had a technology and needed to get into business.”
A $6 million private placement got the firm started on building its plant, Brehm said.
In 2000, the year the plant began operation, Brehm hired a team of four engineers to sell solutions and services for U.S Microbics and its five subsidiaries.
Veteran engineer Beattie who heads Sub Surface Waste Management specializes in consulting services and product sales.
West Coast Fermentation Center is the production unit selling technology to the other units; Bio-Con Microbes manages service sewage treatment and the agricultural market; Wasteline Performance Corp. specializes in wastewater clean-up; and Xyclonyx owns the technology.
The bugs can be applied to treat pollution in three areas: “in-situ,” or inside the soil and in the groundwater; in “open waters;” and “ex-situ,” above the ground, Beattie said.
Someone Must Pay
Bottom line, he said, in this country pollution is against the law and someone is going to pay.
“(So) if you pollute one gallon of contaminants in a landfill and you are the only one found who did it, you end up paying for the whole landfill cleanup,” Beattie said.
The culprits are many, from big oil and utility firms to property owners to the government, he said.
Sometimes, it’s a new developer footing the bill to clean up the old mess. No one knows this better than Stephen Hopkins, president of Hopkins Real Estate Group in Newport Beach.
The shopping mall developer has hired numerous firms to clean up things like asbestos, gasoline and dry-cleaning fluids lurking beneath vacant lots.
Hopkins said he opted to work with Sub Surface Waste Management’s Beattie, because he specializes in “consulting services and offers solutions.”
“If you have a consultant that can (only) identify the problem, it’s more time-consuming and costly to do a cleanup (hire another firm),” Hopkins said.
Expertise Offered
Nyhuus added U.S. Microbics also offers expertise and good service.
“When I need bacteria, U.S. Microbics makes them fresh,” he said. “Others (rivals) have dry bacteria you need to mix them with water and grow them again.”
The firm’s proprietary “Bio-Raptor” treatment uses a machine that sprays oil-infested sand with a secret food source, then dumps the mix onto the ground.
The bugs eat the oil, and hopefully in about nine months’ time the 200,000 tons of sand will be cleaned, Nyhuus said.
U.S. Microbics is hardly alone in applying bugs to bio-remediate contaminants.
“This is a powerful technology,” said UCSD professor Julian Schroeder. “Microbes are used effectively to degrade organic toxicants into normal compounds.”
Another professor, however, contends that laboratory-grown bugs aren’t always the best solution for oil and gasoline spills.
Barbara Hemmingsen, an SDSU professor of biology, admits she isn’t a big fan of using laboratory-grown bugs.
“I haven’t seen scientific proof that it works,” Hemmingsen said of bugs that are grown in a controlled environment.
Results With Nutrients Slower
She has found that by adding nutrients to oil-degrading or gasoline-degrading bacteria, one can break down toxicants quite successfully. The drawback is that process takes years and people don’t want to wait that long, she said.
U.S. Microbics and Shell Global Solutions, the giant oil company that does its own bug research, know their clients demand fast and cost-effective solutions.
Beattie predicted that one of the largest environment problems will be the clean up of Methyl-Tertiary-Butyl Ether, or MTBE, a common gasoline additive that has been detected in groundwater.
The problem is so severe that MTBE will be banned from gasoline sold in California starting Jan. 1, 2003 according to a spokeswoman from the California Air Resources Board. However, so much contamination has been done it could keep U.S. Microbics’ bugs working for years, he said.
For now, though, the firm must raise capital to maintain its ongoing operations, according to a December 2000 filing with the Securities and Exchange Commission.
Last week, the company’s stock was trading below $1 on the OTC bulletin board.
Brehm is confident he’ll raise an additional $5 million this year. He also wants to buy more engineering firms with established clients to buy U.S. Microbics’ technology.
If all goes as planned, the firm will be profitable by September 2002, Brehm said.
Still, Beattie admits, as he points to several recipes of bugs mixed with sand from France , it takes time and effort to find the right mix.
That also goes for growing a company.
