78.5 F
San Fernando
Wednesday, Dec 6, 2023

Kentucky Firm Steps in When Kreido Funds Dry Up

Kreido Biofuels appeared to have everything going for it. The devices designed and made by the Camarillo company could be used to make biofuels and contribute to the search for alternative fuel sources. As venture capitalists realized that clean technology firms moved from niche industries into the mainstream their investment dollars became more plentiful. With each announcement, Kreido appeared to ride a wave of commercializing its devices to reach the goal of 100 million gallons of biofuel at a North Carolina production plant. Then through a variety of factors, the least of which was the struggling economy, Kreido began to lose momentum. When $20 million in needed funds never materialized, work stopped last June on its production facility. Then there was no news from the company through the rest of the summer and as summer turned to fall and fall into winter. Then word came that a Kentucky company bought Kreido and the Camarillo offices would close. Commercializing the “spinning tube-in-tube” devices would be left to Four Rivers BioEnergy Inc., which had the money, the land and the interest. “Not everything works the way you want it to no matter how good it is,” said Kreido CEO Ben Binninger in the days following the announcement of the sale. Still an advocate of the company’s devices, Binninger summed up what went wrong with Kreido as the dilemma of starting construction in a trough a period when funding was no longer available to reach the next peak. Creating fuels from biostocks, however, is a commodity driven business, regardless of how good the technology used to create the fuels is. Kreido, like other companies creating biodiesel and ethanol, faced rising prices in raw materials. Other production plants shut down or went idle due to difficulties in generating a positive margin between cost of materials and the end use. Kreido originally planned to build its plant in the Chicago-area and later settled on Wilmington, N.C. The company received its permits and approvals but missing was an additional $20 million that its investors insisted come from other sources. By mid-2008, it was virtually impossible to get funding for a novel technology. “Now it’s hopeless,” Binninger said. In a 13-year period, Kreido racked up a net loss of $46.1 million, according to a quarterly filing with the U.S. Securities and Exchange Commission in November. From that came the “spinning-tube-in-tube” technology that speeds up chemical reactions with versatile uses for making pharmaceuticals, specialty chemicals and biofuels. Biofuels were chosen as the first use of commercialization because of the lower capital needed; fewer byproducts left over by the process; and it being a high profile area with interest by investors. Now the technology belongs to Four Rivers (or 4Rivers, according to the company website), an over-the-counter traded company building a biofuel production plant in Calvert City, Ky., with a completion date in 2010 and capacity of 130 million gallons of bioethanol and 35 million gallons of biodiesel fuels. Attempts to reach Four Rivers President and CEO Gary Hudson to ask about the interest in Kreido’s device were not successful. The press release on the sale quotes Hudson as saying acquiring the Kreido technology is part of the company’s expansion plan and provided flexibility to use a variety of vegetable feedstocks. Since Hudson didn’t want to talk, why not give the last word to Binninger, whose future plans once the Kreido sales goes through is to stay active in a board or advisory role with another energy company. “In some respect, Four Rivers might be coming in at just the right time, buying us low and investing for the time when the market, the economy and the government will be ready for it,” Binninger said. The Valley is Flat Here’s an example of the global business reach of the Valley a Chatsworth ball bearing manufacturer owned by a Japanese company that is the world’s leading supplier of miniature bearings will oversee the operations of a German company that was recently acquired. Despite being in the land of palm trees and surfing and earthquakes, that manufacturer holds onto the name showing its New England roots New Hampshire Ball Bearings. When the name is pointed out to company President Gary Yomantas, he lets out a laugh and explains that having the company headquarters in Chatsworth is not at all unusual since parent organization Minebea Co. Ltd. has long had a presence in Southern California. “It is easy for me to fly to Japan or fly to Europe from here,” Yomantas added. Minebea acquired myonic Holding for its technology and European market share and will incorporate the company into the NHBB business unit. The German company excels at high-precision bearing technology used in the medical and dental markets. Yomantas doesn’t foresee the distance between the Valley and Leutkirch, Germany, to present any challenges, as the NHBB and myonic product lines are complementary. “We did buy the company as a standalone,” Yomantas said. “We feel the management team currently operating the company is very capable, and that is part of what we wanted to purchase.” New Hampshire Ball Bearings also manufactures in the Valley and recently completed an expansion. The company worked with Los Angeles City Councilman Greig Smith’s office for assistance to fast track the permitting process for the expansion. “We are cemented into this part of the country as well as New England,” Yomantas said. Staff Reporter Mark Madler can be reached at (818) 316-3126 or by e-mail at mmadler@sfvbj.com . He’s never been to New Hampshire. Correction (March 2) The manufacturing column above mistakenly identified myonic Holding as the world’s leading producer of miniature bearings. Parent company Minebea Co. Ltd. holds that distinction.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

Featured Articles

Related Articles