From beakers to reactors: a perspective from small-scale suppliers

By Nicholas Zeman | September 18, 2009
Posted October 14, 2009

Small-scale suppliers developed their business as they watched the mega-scale biodiesel plants go broke or sit idle. They don't just sell plastic cones and rubber hoses to garage-based brewers anymore. They sell everything from standalone processors for personal production to lab and testing equipment for commercial facilities.

Utah Biodiesel Supply in Syracuse, Utah, offers a plethora of products-everything from beakers and filters to wash tanks and self-contained processing units. "My business philosophy has been different than the majority of home-brewing companies," said Graydon Blair, founder of UBS. "Many had a one-size-fits-all solution that tried to pigeon hole everyone into their equipment. I wanted to service them all. I sell equipment to everyone from home brewers to bona fide biodiesel factories that need testing materials-beakers, filters, etc.-for their laboratories."

Companies like UBS have observed the trend of moving away from centralized plants and returning in some measure to the grass roots model of modest production volumes built around a local or community-based plan. Another of these companies is Biodiesel Experts. Ernie DeMartino is a mechanical engineer with decades of centrifuge experience. He's been a consultant and supplier to the biodiesel industry for about five years, and now owns and operates Biodiesel Experts headquartered in Pearland, Texas. "The only biodiesel plants that are staying successful are the 2 MMgy to 3MMgy plants," he said. "These are little guys that work little deals in their local area, pick up feedstock, and sell biodiesel."

"What people failed to consider or manage was the logistics- everybody knows when the mega plants centered on refined vegetable oils started to have problems," DeMartino said. "They started going broke and didn't have enough to retool for multi-feedstock processing. It hasn't worked unless you're Tyson or Cargill where you have the source right next to a large plant. Even the smaller guys who put all their eggs in refined oils couldn't make a living."

Home-based brewers, small farms and now cooperatives are still the largest sector of customers for suppliers like UBS and Biodiesel Experts, but DeMartino said an untapped market is sitting out there ready to take off. "Municipalities are really what my system is geared for," he said. "These have thousands of vehicles and mandates to use renewable fuels. If they find a way to get the logistics to work, their fuel cost is zero, they might even be able to make money with the credits they receive."

Initially servicing the needs of home-based fuel makers, Blair eventually became very well acquainted with the commercial industry selling chemicals and ASTM testing gear. "I've been moving into products that all my customers need. Even if they buy one of the BioPro processors, they're still going to need equipment to collect, filter and store grease," Blair said. "Other accessories like a methanol pump-everybody needs a methanol pump."

Because of his expertise, DeMartino started fixing problems related to maintenance and processing at the bigger plants, too. "We've been trying to convince customers that biodiesel is more about chemistry than it is equipment, and that's where their focus needs to be," he said. Not only does DeMartino serve as a vendor and consultant to industrial-scale plants, Biodiesel Experts also manufactures its self-designed Precision line of stainless steel, industrial grade biodiesel processors, which are assembled both domestically in Pearland, Texas, and abroad in Columbia, he said.

The ability of the biodiesel manufacturing process-whether personal or commercial-to compete with the cost of petrol diesel is the most vital component to generate sales, profit and interest. "Last year, we couldn't answer the phones fast enough," Blair said. "When diesel is above $3-per-gallon or $3.50-per-gallon, we get a large interest from a wide range of people. Interest was intense after Katrina when the price of diesel spiked, but since then we've seen it drop back off."
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