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August 15, 2016 Issue

CEOCFO MAGAZINE

 

Safe, Easy to Use Stabilized Alkali Metals for the Oil & Gas and Industry – Increasing Recovery and Reducing Production and Development Timelines

 

 

Michael Lefenfeld, M. Phil.

President & Chief Executive Officer

 

SiGNa Chemistry, Inc.

www.signachem.com

 

Interview conducted by:

Lynn Fosse, Senior Editor, CEOCFO Magazine, Published - August 15, 2016

 

CEOCFO: Mr. Lefenfeld, would you tell us about Smart Science™ at SiGNa?

Mr. Lefenfeld: At SiGNa, Smart Science™ is how we live life – something ingrained within us. When you are performing Smart Science, you consider all of the key metrics of the circular economy, all of the metrics of green chemistry in order to make products and processes that are better for the environment, safer for employees and deliver value for users of our technology. If you commit to performing in a very cost-effective and rigorous fashion, you can be an advantageous and flexible company that delivers great change to an industry. We make sure that everyone within our organization – from top to bottom – embodies the Smart Science approach in everything we do.

 

CEOCFO: What are stabilized alkali metals and what is the process you have developed?

Mr. Lefenfeld: If you think back to chemistry class, there was usually a demonstration where your teacher took sodium metal, which is an element on the left side of the periodic table, and threw it in water – and that usually resulted in a fireball!  Whether you were good or bad in chemistry, it’s the sort of thing that people remember. The reason for that explosion is because when sodium reacts to water, it generates heat and it releases a flammable gas called hydrogen. The hydrogen gas catches fire and you get a fire ball. What stabilizes our reactive metals is the removal of that ignition (hydrogen) and the removal of reactivity to oxygen…or the oxidation of the chemical. 

SiGNa does this by dissolving the reactive metal within a nanostructured support, which allows the material to take on a different form while retaining all of its reactivity. Importantly though, this also gets rid of all the dangers for scale-up, all of the handling dangers, the safety and environmental difficulties that come along with reactive metals. This allows these elements – the reactive species that was discovered over a hundred years ago – to be used in a much grander form. Most industries have never been able to use these metals at large scale before because of the safety limitations.

 

CEOCFO: Have people been looking for a better way all these years, or did people think it was impossible so just did not bother?

Mr. Lefenfeld: Scientists are researching new things and new processes all the time.  In the past, reactive metals were primarily looked at to increase their reactivity. The reaction was where the focus was.  Not many people looked at ways to distribute the heat to avoid ignition of the hydrogen (which is what’s catching fire) and oxidation. That single electron at the heart of these reactions is very active, and it really wants to go somewhere to react. What we’re doing to stabilize these reactive metals isn’t something that was thought to be possible, so when we found this system we were very surprised ourselves.

 

CEOCFO: What was the reaction from people? 

Mr. Lefenfeld: Scientists tend to be skeptical by nature. We like to see proof and prefer to find that proof ourselves. It’s a very hands-on profession, and I am a technical person by degree and by nature. Even though there is always disbelief in how our products operate, once people see them in the field – in oil fields and refineries, in the fine chemicals and specialty chemicals industry, or pharmaceutical applications – that’s when people get very excited by their versatility and what they can allow them to achieve.

 

CEOCFO: What are some of the areas where you offer products and some of the applications?

Mr. Lefenfeld: Our business is separated into two main verticals - oil and gas recovery, and industrial chemical applications. 

In oil and gas, our product is injected into the well where the oil is contained. Most people think that an oil well is just a hole in the ground that’s filled with oil. However, oil wells are mostly rock, sand and different natural formations that hold the oil in the ground. It’s very difficult to get it out. In fact, most oil wells around the world, some of which have been abandoned, still retain 50% to 90% of their oil. Our chemical goes into the oil well and reacts with water to generate heat to make the oil flow better – going from the thickness of syrup to flowing like water. 

At the same time, energy is also generated within the well from the reaction, so the now-flowing oil is pushed towards the production well. Our environmentally friendly by-product is known as sodium silicate, a very common material found within the earth’s crust and the main ingredient in toothpaste, helps the oil to move more easily toward production by making it more soluble in water.

So our product combines three benefits – heat, pressure and alkalized silicate – to increase the production of trapped oil in older wells. By using this product, we are able to tap into wells that were thought to be ‘dry’ and we do it with a sustainable and green methodology. This not only applies to old wells, however, it can be used in new wells, too. This makes the opportunity very large for SiGNa.

On the industrial chemistry side, our materials are used in refineries to make gasoline, to remove sulphur from gasoline products, for example. It’s also used in many chemical transformations – or catalysts – in the specialty chemical and paper industry. We also have further applications in energy, in the lubricant industry and in the pharmaceutical fine chemicals market.

 

CEOCFO: What is the competitive landscape?

Mr. Lefenfeld: We are the only company in the world that produces stabilized reactive metals. We have patents on the composition of the material – the actual chemical molecule itself. We have patents on the method for how it’s made, as well as for its use in a broad array of industries. But there are many diverse ways to do chemistry, and different paths to create solutions that deliver the results customers are looking for. Thus, there is competition in all the markets we serve. However, we feel SiGNa has a very attractive offering within many industries because of our price structure and the direct path that our materials offer, without the need for additional processing steps. We are pleased with our position and our product portfolio.

 

CEOCFO: Is environmentally-friendly important to your customers, or is it a nice side feature?

Mr. Lefenfeld: I think it is important to our customers that things are environmentally friendly. But, I do not believe that people are going to pay an extra five dollars for the green appeal – which means that suppliers must produce their products cost-effectively in order to drive market adoption. If there’s a green alternative in a similar cost range, I think green will be chosen almost 100% of the time. I believe there has been a much larger adoption towards better practices across many industries in recent years.

 

CEOCFO: Would you tell us about your new facility?

Mr. Lefenfeld: We have a new manufacturing facility in Rochester on the Eastman Business Park campus, and have been delighted to work and partner with the Eastman and Kodak teams. The nice thing about that facility is that it’s fully integrated into an ecosystem that Kodak built over decades to support their mass production of film. We were able to build into their rail network, their onsite generation of nitrogen, and the complete integration of services. It allowed us to operate in a much larger fashion out of the gate, rather than starting from a greenfield space. We have been very fortunate to have found that space.  It’s a state-of-the-art 25,000 square foot facility that is capable of servicing a large percentage of our oil and gas business. 

Early on, as SiGNa was growing, we manufactured many of our products using a third-party manufacturer. When a customer adopts a new chemical into their production process, it’s there for a long time and customers have to make sure that the chemical will always be available. So as a young company, we partnered with large industrial chemical manufacturers to help us build our early supply chain and reduce risk for customers. Later, as we became much larger, much stronger and a better known organization, we took manufacturing in-house so we could control logistics, planning and pricing in order to generate a global business. We now sell into most continents and we focus on making sure we can consistently service our customers on-demand needs.

 

CEOCFO: Where do you see growth potential?

Mr. Lefenfeld: It is an interesting time. With the recently lower prices of oil, we took the opportunity to buy oil wells. We knew we could sell chemicals to companies that are selling oil at a profit, so we decided to vertically integrate downstream and buy our own oil wells. Using this strategy, we’re able to generate a much larger return on the chemical investment, because we capture the profit of the oil as well as the chemical generation. In essence, the downturn gave us that ability to vertically integrate. That is a big focus for us now as we support our expansion in the energy space and work to drive value to our employees and shareholders. 

We see many opportunities in the industrial chemical space as well. Companies are deciding to streamline their businesses or shed certain assets. So there is a lot of opportunity there for us to look at key strategic acquisitions to obtain technology that is in line with our customer base to better service our users and our customers.

 

CEOCFO: What surprised you through the process of developing and growing the company?

Mr. Lefenfeld: Everything!  The biggest challenge for me in the chemical industry is that I have a background in technology entrepreneurship. I have been starting technology companies since I was eighteen, and the industries that I originally worked in are very collaborative, such as the biotech industry, medical devices, etc. You constantly hear of IT and dot.com businesses collaborating at their earliest of stages. 

The chemical industry, however, is much more conservative and they do not partner very easily. For example, a large chemical company may decide to invest $50 million in research dollars to improve a catalyst that is already selling a billion dollars a year. If they can improve its efficiency by only 0.1%, that turns over a large return very quickly because the chemical scale is so big. Getting companies like that to notice and partner with a startup – even one with a groundbreaking technology like SiGNa – has not always been easy.

So, while there is a lot of volume of chemical movement across the globe in many different markets, the lack of collaboration has forced SiGNa to be very creative in our growth structure. Luckily, we made it through the different downturns in 2008-2009. We made it through the oil depreciation as well. We have been very fortunate and have built a strong and diverse company to make sure we can survive the tougher times.  

I do think the chemical industry is becoming a little more open and partner-friendly, and we are starting to see more creativity in chemicals. We work with smaller companies all the time, but even the major top ten chemical companies are starting to seek partnerships – so that could produce more opportunities for us in the future.



 

“By using this product, we are able to tap into wells that were thought to be ‘dry’ and we do it with a sustainable and green methodology.”- Michael Lefenfeld, M. Phil


 

SiGNa Chemistry, Inc.

www.signachem.com

 

Contact:
Ashley Angello
585-340-1119

·         aangello@tippingpointcomm.com



 


 

 



 

 


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