Profile of a start-up company that has created a foam to spread over landfill garbage.
We're quickly running out of room for our solid waste,and innovative companies like Rusmar Inc. stand to get rich. But can this start-up first navigate through a maze of government regulations?
L et's talk trash. In fact, let's talk 160 million tons of trash -- the amount Americans throw out every year. And let's talk about an opportunity.
Anyone who remembers Long Island's vagabond garbage barge of a few years ago knows that the country is fast exhausting landfill space. In 1978 there were some 20,000 landfills. Since then nearly 14,000 have closed. Some got full; others were shut down by regulators. About 6,000 remain, and strict new laws will close 2,000 of those in the next decade. What's worse, so few new landfills are being built -- they're difficult and costly to site -- that national disposal demands may outstrip capacity by the late 1990s. Northeast and Great Lakes urban centers might run out of space by 1993. Speeding the crunch date is a regulatory requirement that landfills, each night, cover the day's trash with at least six inches of soil. The intent is sensible. The soil controls odors, litter, and vectors, landfill speak for insects and rodents. The trouble is, the soil consumes as much as 30% of landfill capacity. In some places soil itself is so scarce that landfill operators are buying farms just for their dirt. A landfill manager in Ventura, Calif., is actually trying to buy a mountain.
Enter Rusmar Inc., a West Chester, Pa., start-up aiming to replace all that soil with a patented, shaving-cream-like foam. If ever a product matched a need, you'd think, this is it. The foam is biodegradable, environmentally benign, and just as effective as soil in suppressing odor, litter, and vectors. In most cases it is cheaper than dirt and much easier to apply.
But most important, foam occupies virtually zero space. It breaks down to the landfill equivalent of bathtub ring. By reducing the need for soil, it can extend landfill longevity by years and thus increase profitability.
According to Rusmar's calculations, for instance, the average landfill requires at least 185 cubic yards of soil for daily cover, space that could generate about $5,800 in revenues if used for trash instead -- or more than $1.5 million a year. If soil must be purchased and transported, at costs of up to $12 a cubic yard, landfill expenses run even higher. As the crunch worsens and garbage-truck dumping fees escalate, the value of landfill space will rise, and the economics of using foam will grow more compelling still.
Yet however urgent the landfill problem appears, founder Paul A. Kittle stumbled on it almost by accident. In 1985, after pitching a plan to use foam to control odors at hazardous-waste sites, Kittle was approached by a listener. "If you do foams," he said, "why don't you invent one to cover landfills?"
Kittle was skeptical. He had come out of the University of California at Berkeley in 1963 with a Ph.D. in chemistry. Between stints with Rohm & Haas and ARCO Chemical, he'd worked at Apollo Technologies, a small specialty-chemical manufacturer in New Jersey, where he first became intrigued by foams. By the early 1980s he was a self-employed headhunter of technical talent. Foam technology, though, still fascinated him to the point that he'd obtained a patent for a foam to control coal dust and was working on one for odor suppression.
But landfills? Landfills would require a covering that holds up overnight, and foam doesn't last that long. At least not the foams in existence at the time.
But Kittle was convinced the landfill opportunity was real. He didn't mind the idea of holing up in a lab to tinker with the problems it presented. "I think if you are a well-trained Ph.D. chemist and you want to see if you can cut it, then you try to invent a technology and take it to the marketplace and make it a success," he says.
He rented a small space in West Chester and went to work. Methodically, Kittle mapped out the requirements. The material had to be a water-soluble, single-component product, so it could be sold as a concentrate and delivered by tank truck. It had to be so innocuous in its chemical composition that no one would question its safety. And it had to be so cheap that a landfill could cover a square foot of trash for 5¢ or 6¢. Ideally, there should be no question that if you used it, you'd save money.
Cut to September 27, 1988, Kittle's 50th birthday and the date his dream began to jell. On that day a group of five Philadelphia investors committed $1 million -- half in debentures, half in equity -- taking a 55% stake in Rusmar, named after Kittle's parents, Russell and Mary.
Over the previous few years Kittle had struggled with "hundreds of gremlins," he says, to invent and perfect a foam he called AC-645. When tested, it formed a complete barrier to odor and vapor emissions for up to 36 hours. And he'd managed to make it from environmentally harmless ingredients, chemicals commonly found in cosmetics, detergents, and shampoos. "You could eat this stuff," he notes, "and the worse that would happen is you'd get a case of the runs."
The capital infusion allowed Kittle to get serious. He moved into a larger facility in West Chester and hired Paul Russo, an energetic chemist he'd worked with at Apollo Technologies. Russo, then 36, had experience in management and sales, and would handle everything from strategy to marketing. "Most people thought this would be an instant success," Kittle recalls. And why not? The market looked like a natural. His business plan, projecting first-year sales of $3 million, practically oozed optimism. Rusmar, Kittle thought, was on its way.
