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DDS Technologies USA is
offering a technology for converting
any organic waste material into marketable products for the animal feed and ethanol
Waste Reclaimation/Organic Material Processing
DDS Technologies USA Inc.
150 Palmetto E. Park Road
Boca Raton, FL 33432
Phone: 561 750 4450
Spencer L. Sterling
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
May 5, 2005
Spencer L. Sterling, President and CEO
Spencer Sterling was born in Los Angeles, grew up in South Africa and had a highly
successful 37 year career in the Motor Industry, with the Ford Motor Company and Anglo
American Corporation. He joined Ford South Africa in 1957 as a Graduate Trainee and
retired in 1994 as CEO and Chairman of the Board, to start a new career.
Mr Sterling graduated from
high school in 1951 and from University in 1956 with a BSc degree in Metallurgy and
Mechanical Engineering. In 1974 he participated in the Executive Development Program at
the countrys leading Business School and subsequently completed an MBA.
His career with the Ford Motor
Company included appointments to progressively more senior executive positions in South
Africa, Australia, Taiwan, Canada, Europe and the United States. In 1982 he resigned a
senior management position with Ford in Detroit, to take up the position of Managing
Director of the Sigma Motor Corporation, a wholly owned subsidiary of the Anglo American
Corporation in South Africa.
In 1985, Sigma Motor
Corporation was merged with Ford South Africa to form the South African Motor Corporation
(SAMCOR) and Mr. Sterling was appointed Group Managing Director and Chairman of
subsidiaries. In 1992 he was appointed Chairman of the main board and a Director of The
Anglo American Industrial Corporation (AMIC).
In March 1988 he was elected
President of the National Association of Automobile Manufacturers of South Africa, a
position he held for an unprecedented four years, and in the same year was awarded an
Honorary Professorship by the University of Pretoria. Two years later he was elected to
the Council of the University. In 1992, he was elected President of the South African
Federated Chamber of Commerce and Industry
In March 1994, Mr. Sterling
retired from the Motor Industry to start a new career as an entrepreneur and international
consultant. In August 2003 he was approached by the founders of DDS Technologies USA Inc.
to take up the position of President and CEO and joined the Company in Boca Raton, Florida
the following October.
Sterling, what attracted you to DDS Technologies?
Mr. Sterling: What attracted me to DDS was the
technology. The fact that it was a radical departure from the existing technologies in the
same field, all of which were chemically based. This is a physical technology and I was
highly intrigued by the theory. When I saw demonstration on the prototype machines in Italy,
I became convinced that there was a significant commercial potential.
does the technology do?
Mr. Sterling: What it does is take organic materials, suitably prepared, and it
introduces the material, ground down to a reasonable particle size, not micro, but
something of the order of , depending on the specific gravity of the material; anything
from about 300 microns to 3 mm. in size. The material is introduced into an air stream,
which carries the material through a series of processes, which impact the particles with
one another in specially designed circuits. This achieves two things; one is the
micronizing of the material down to very small particle sizes and the other results in the
splitting of the bonds between molecular clusters in the materials with the result that
certain constituents inherent within the compound are liberated. What that means is that
one can take a material that has a certain level of protein, starch or cellulose, and you
can produce a material that has a much higher percentage of a particular element, by
simply splitting away the other constituent elements of the compound. The real commercial
application is to take waste organic material, which must be dry and ground to suitable
size, and then introduce it, so that a waste material can be converted into a saleable
animal feed or fertilizer base and many other applications, by simply splitting into three
fractions of base material. One fraction will contain a high concentration of a particular
element and a second fraction will contain the concentration of another element.
said that it is done chemically now and it will be done physically; what is the advantage
to your process?
Mr. Sterling: The advantage our system is enormous
because our competition, which is based on chemical processes are which either very slow,
very expensive or both. They have a tendency in many cases to impact disadvantageously on
the base material. For example, materials today, which are micronized for the animal feed
industry, exhibit a loss of nutritional value relative to the base material. In our
system, which operates at ambient temperature and under negative pressure, we preserve and
in many cases enhance the nutritional value of the base material. That is a huge
advantage. The material can be processed much faster and cheaper than in a two-chemical
which stage are you in having the process utilized?
Mr. Sterling: We are currently doing research with a
number of companies. We have signed agreements on our first commercial venture in an
industry in which we did not originally anticipate we would participate. However, it does
demonstrate the flexibility of the technology. We are going to sell machines to a company
in Alberta, Canada, which is going to apply the technology to the purification of
contaminated sulfur. This sulfur, which results from the cleansing of natural gas, lies in
huge dumps and has become an environmental hazard. The government of the province of Alberta
has decreed that these dumps must be cleaned up in five years. I think that is over
ambitious, but our technology has been applied to the process and is bound to be
effective. The first contract has been signed and we are looking at a second contract in
that field. At the same time, we are doing research with three other companies all in
completely different fields where there appears to be very definite application and
potential for our technology to meet their needs.
is the revenue plan?
Mr. Sterling: We remain flexible with respect to the
model. We look at it on a deal-by-deal basis. The model we have developed for our first
commercial venture is a satisfactory one. We will sell machines to the company that is
going to process the sulfur and we will earn a royalty on every ton processed. We think
that is the best of both worlds. If we lease the machines, the advantage is an annuity
type income but we achieve that to an extent with the royalty anyway. The disadvantage is
that if we remain the owners of the machines, we would have to carry significant liability
insurance. If something happens for whatever reason and there is a calamity in the form of
significant property damage or injury or death, even though we are thousands of miles
away, as the owners of the machines, we could be liable. We like the model we have
CEOCFOinterviews: How do
you stay focused on your goal, given all the other possibilities?
Mr. Sterling: It has taken awhile for us to clarify our
thinking in that regard. It comes from the fact that have taken a number of products and
tested the capability of the technology with respect to that particular product. With some
products, we are able to achieve commercial fractions much easier than others are. We need
to do a significant amount of R&D in order to specifically meet the needs both of the
customers and of the ultimate marketplace into which he is going to sell the product. We
choose our priorities through very careful evaluation of specific products and
opportunities. This is time consuming and expensive and that is what we have been busy
with for many months. We have set ourselves a time objective of another three to six
months before we really launch our first commercial ventures in the organic product field,
which is primarily animal feeds, human food supplements and stuff like that.
you tell us how you will manage to fund your projects?
Mr. Sterling: We have very carefully evaluated our
funding needs. We have designed our approach to funding equally carefully. We have just
completed a round of incremental funding, which will be announced soon. Consequently we
are now adequately funded to take us through the R&D program that we have laid out for
you give us an idea of the opportunity for your particular type of technology?
Mr. Sterling: There is no question; nobody is going to
operate with a monopoly other than De Beerss Diamonds for very long. We recognize
that we have to get into the marketplace and show success, and at the same time, we must
have a continuous and aggressive R&D program to upgrade the technology to the next
level. In that context, there are many other technologies, which are in the process of
development, especially in the U.S. Every time we come across one or someone approaches
us, we find that the technology is more likely to be complimentary than competitive. We
are working with a number of companies who are in the throws of proving out new technology
with the objective of combining the two in certain applications. However, there is no
doubt that eventually we will be faced with direct competition. We intend to get in first
and stay ahead.
closing, how do you characterize your company and why should potential investors be
Mr. Sterling: You have the same conditions as with any
start-up venture. There are certain types of investors that will look at a start-up
venture and there are many of them in the United States. I field phone calls at the rate
of two to six a day from these types of people and institutions. We are a start-up
venture; we are bringing a new technology to market with all of its inherent problems and
issues. That is the first thing that someone must understand; the professionals do.
Secondly, we have a technology, which is applicable to such a wide range of accepted and
established sectors in industry. That alone, is a real attraction because people
understand that the animal feed industry for example is a huge industry; the ethanol
industry is going to grow into one of the biggest industries in the country. Just the
ability to micronize down to small particle sizes of below 20 microns, in a distribution
band that is very narrow, is an industry of its own. The work that we are doing on
disaggregation or separation of molecular structures, gives us potential for application
in any field where there is organic material. There is the possibility of applying our
technology to enhance or accelerate the processing of organic materials or, more
significantly, find an income stream from the waste of those processes, which today is a
cost in terms of disposal and is becoming increasingly more so, as environmental
legislation becomes more onerous. We have enormous potential, but we do not underestimate
the time, cost and the effort required to establish the technology as an accepted
commercial process. We still have work to do but we are in the final stages and the
potential will open up in the course of this year. We will probably launch into a number
of projects as the year progresses and certainly going into 2006, we should be a truly
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