Employees First

If there ever was a truly homegrown enterprise, Mankato-based Phenix Biocomposites is it. The company grew out of a science project by Mankato elementary schooler Molly DeGezelle. In 1991 the 11-year-old set out to make a useful product from newspapers. The enterprising youngster added glue and baked the mixture in a microwave. The result, a material tough enough to withstand seven dishwasher cycles, attracted the interest of another local group, Rho-Delta.

The group, whose name used Greek letters to represent research and development, consisted of former science and engineering professors from Mankato State University. Rho-Delta took the product under its wing, substituted soy flour for glue, attracted $275,000 in grants from soybean research groups and a $100,000 loan from the Minnesota Agricultural Utilization Research Institute (AURI) and developed a remarkable new material called Environ.

Looks Like Stone, Works Like Wood

One and a half times harder than oak and similar in appearance to granite, Environ can be easily sawed and sanded (“Looks like stone, works like wood” was Phenix’s initial slogan). Environ has the modest structural properties of medium density fiberboard, but as Workbench magazine has observed, ىts main feature is good looks, not brawn. Composed of about 50 percent recycled newspapers and about 50 percent food-grade soy flour, Environ panels come in 16 rich colors, ranging from their standard colors like Sunset, Midnight and Green Agate to other custom colors like Lapis, Mocha Granite and Santa Fe. The material ranges in thickness from 1/8 inch to 1 inch and can be used for:

• furniture
• displays
• wall paneling
• flooring
• cabinetry
• plaques
• other various office accessories

Environ is now bringing manufacturing dollars to agricultural communities. A $1 million investment from USDA’s Alternative Agricultural Research and Commercialization (AARC) triggered private investments of $4.5 million. In the fall of 1995, a 21,000 square foot, full-scale production facility was established in St. Peter, MN. In the small town of under 10,000, the generation of new jobs for the facility was welcome. Fifty employees work in the building, with a capacity to manufacture one million square feet of panels per year.

Virtually all the raw materials used are collected or harvested within 50 miles of the manufacturing plant. The company estimates that for each ton of newsprint used in the construction of Environ, 3 cubic yards of landfill are spared. It also leads to important reductions in energy use and air pollution.

Cutting Edge Environmental Technology

At the facility in St. Peter, Phenix continues to develop cutting edge environmental technology. Dakota Burl, a unique composite made from old sunflower seed hulls, is the newest in their product line. Making use of an agricultural waste product, Dakota Burl has a fascinating look, combining the yellow and brown tones of the sunflower fibers. Like Environ, it can be used for a number of applications as a common substitute to wood.

When it came time to build a larger manufacturing facility, Phenix again used a local solution by starting a cooperative. Several hundred soybean farmers invested some $15 million toward a new $23 million facility to manufacture BIOFIBER panels. The producers involved jointly own the manufacturing arm and can thus ensure better process for their product and share in the Phenix’s profits. Opened in Mankato in late 1998, the 148,000-square-foot plant is capable of annually manufacturing 45 million square feet of product, and employs roughly 150 people.

Phenix also touts BIOFIBER’s environmental attributes as an alternative to logging and believes it is a superior product to wood. Their studies show that it is lighter in weight, has smoother surface characteristics, has greater moisture resistance and is formaldehyde-free.

Nurturing the Economy

It will be an economy that nurtures equally those resources in their backyard and those on other continents. And this “enlightened capitalism”, as Chuck calls it, will be profitable for all concerned. Chuck’s insistence that the glass is half full has served them well to date. While customers, employees, and the environment have been well served, so have the owners as the business has grown and profited.

The link between the cooperatively owned manufacturing facility and investor-owned research and development and marketing company may be as innovative as the products themselves. Phenix Manufacturing will sell its product at cost to Phenix Biocomposites and share 50-50 in the profits from this and other product sales. The manufacturing cooperative also owns a significant percentage of Phenix Biocomposites. Thus Phenix Biocomposites benefits from lower cost products from the manufacturing cooperative, and the farmers benefit from current and future research and development efforts of the investor-owned firm.

Phenix combines a strong environmental ethos with a fierce competitive edge. The company has grown substantially over a short 10 years and has entered into partnerships overseas to boost their marketing and distribution potential. Seeing the large potential in foreign markets, Phenix continues to search for ways to expand overseas and find new partnerships. Remember Molly, who inspired a couple of scientists to found the company? Molly and her father still own shares in the company and if the company goes public as planned, she may be able to pay her way through college and then some. Good works are indeed often rewarded.