CoalTek benefits from Rebirth in energy funding
The Company at a Glance:
CoalTek uses its proprietary process to provide environmentally acceptable, fuel-efficient, and cost-efficient coal to electric utility companies and companies in the industrial generation market.
Number of Employees: 15
Location: Tucker, GA; Boston, MA; and Calvert City, KY
Funding: $18 million
Funders: Braemar Energy Ventures; Draper Fisher Jurvetson; Element Ventures; Technology Partners; WarburgPincus.
Ownership and control of intellectual property often is a problem for early-stage technology companies, but Tucker-based CoalTek is in the enviable position of owning and having developed all of the many patents in its portfolio.
“We own 100 percent of all our IP,” says CoalTek President and CEO Christopher Poirier. “Dr. Jerry Weinberg (CoalTek’s co-founder along with Chief Geologist Neil Ginther) has developed all of them – some with the help of other staff members. The first of our patents will probably issue in late 2007.”
Having total in house control over all of its intellectual property is part of the sub rosa culture at CoalTek. But, according to Poirier, there is a good reason why he has not been available to the press and why the company has been flying under the radar.
“We don’t just talk about what we want to do. We demonstrate that we can do what we say. We focus on execution. Execution is what drives our business. Too many companies in this space have not performed the way they said they would. We have to do what we say we will do,” Poirier said. “With our processing facility in Calvert City we have proven that what we said we could do actually works. We are selling our product.”
Poirier is keeping CoalTek’s customer relationships confidential, but he will say that the Company’s current customers are large electric utilities and other companies in the Mid-West. And he is happy to talk about CoalTek’s growth and the potential market for its product.
The Company was incorporated in January, 2004, after six years of research and development that culminated in CoalTek’s “clean coal” technology being ready for commercialization.
“Now, less than three years later, we have customers and revenue that will only grow,” Poirier points out. “Both the US and global markets are huge. Five billion tons of coal are used each year – most for generating electricity.
“Because of what we are offering, there is an unbelievable demand on us now. The market momentum has been overwhelming. We are being careful in how we analyze and execute opportunities.”
What CoalTek offers its customers is coal that has a high degree of per-unit efficiency; that has reduced levels of pollutants such as sulfur, ash, and mercury; and that is cost-effective.
This last attribute seems to have generated some controversy based on an article saying that Larry Monroe of Southern Co (parent company of Georgia Power) “investigated the technology but decided CoalTek’s… products were not cost-effective.”
“This came as a great surprise to me,” says Poirier. “No one from Southern Co has ever reviewed our cost basis data. We never provided them with any proprietary information on our process or our costs.
“We must operate within a value boundary. Our customers can lower their fuel costs with our product. We can’t go to potential customers and say ‘here it is, it’s great, and it will cost you 50 percent more than what you are paying now.’ We provide our customers with a product that makes sense financially.”
The environmental aspects of CoalTek’s product appear to be very clear cut.
“Our process provides coal that is much better for the environment than the alternatives. It’s also a highly efficient coal. Historically, superclean, environmentally- compliant coals lose yield during processing. Our coal is superclean and compliant while providing a higher energy density than other processed coals.”
The process itself also is environmentally compliant. All effluent or byproducts are captured, filtered, and separated. They meet the same level of Environmental Protection Agency standards as agricultural water for disposal into holding ponds.
Looking back over the past three years in this industry, Poirier notes that “it was difficult then to secure venture capital backing for a coal-related venture, but all that has changed now. VCs are now looking for anything coal-related.”
Poirier leveraged his personal and professional relationships in the industry to overcome the VC community’s initial skepticism of CoalTek’s plan. Then he had to face the challenges of the engineering and deployment problems of developing the world’s largest industrial microwave processing system – CoalTek’s Kentucky facility. Strong relationships with partners who had the necessary resources, a good supply chain system, a very focused team, and access to capital helped solve that problem.
The current challenge Poirier is facing is building a bigger team for CoalTek.
“We need good people,” he explains, “but it has to be the right fit. We need very specialized experience sets. We know they are out there, and once we find them the people are very easy to recruit because of the challenging, multidisciplinary environment that we have at CoalTek.”
Southeast Venture Conference, February 29 – March 1, 2012 at the Ritz Carlton in Tysons Corner, VA – Where Smart Money Meets Smart People.
www.seventure.org
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