Stas Zinchik has proved that his company could turn nonrecyclable plastic into small pellets that can be burned to generate a surprisingly clean source of electricity. Now, the founder of Calumet, Mich.-based ZiTechnologies Inc. is meeting with potential investors to raise the money he needs to ramp up production and make the process profitable.
In May, ZiTech was one of 51 early-stage companies that exhibited before a national audience of venture capitalists at the annual Michigan Growth Capital Symposium, which was held remotely this year. And about a year ago, he began consulting with Arcadio Ramirez, a longtime technology-business consultant with the Michigan Small Business Development Center, a statewide network funded in part by the U.S. Small Business Administration and the Michigan Economic Development Corp.
ZiTech's pellets are produced through a process called torrefaction, which removes chlorine from plastic. When plastic containing chlorine is burned, it produces hydrochloric acid and dioxins, extremely toxic byproducts that, until now, has prevented power companies from exploring the use of plastics to reduce their reliance on coal. ZiTech's process produces small solid cylindrical black chunks about half an inch by two inches that are far cleaner than coal, on par with natural gas.
ZiTech is a tenant in the Advanced Power System Research Center in the industrial park at the Houghton County airport, a Michigan Technological University facility.
Ramirez, who is based in Ann Arbor, Mich., said one selling point for ZiTech is that about $8 million has been spent over the last seven years on torrefaction research at Michigan Tech. The money has come from utility companies, private investors, the state of Michigan and the National Science Foundation, including a $256,000 Phase I grant for ZiTech last year from the NSF's Small Business Innovation Program, which was matched by $25,000 from the state.
"Waste incineration has been practiced for some time and brings operational difficulties and high emissions ... Torrefied waste is significantly low in hazardous components and can be pulverized, enabling application as a solid renewable fuel," read the NSF grant announcement.
ZiTech hopes to get a much larger Phase II grant later this year or next, in the $1.5 million range, based on hitting goals in the first grant.
With help from Michigan Tech Enterprise Corp.'s Tech SmartZone, Zinchik began the process of commercializing the technology he licensed from the school in March 2020 — hardly a good time. Suddenly unable to go knock on doors with possible strategic partners or drive to meetings with potential investors because of COVID restrictions, Zinchik said he and his small team of three could concentrate on improving their processes in the Power System Research Center.
Ramirez said another selling point for ZiTech is the rising cost of putting plastic in landfills.
"Plastics in garbage is a huge issue. Now, most plastics aren't recyclable, and tipping fees at landfills are increasing dramatically," he said. "Stas knows his technology really well. He's a scientist, not a business person, but he's willing to listen and talk to people about what he doesn't know."
Ramirez consults with companies statewide and is close to Ann Arbor's venture-capital community. He can help bring to the attention of VC firms investing in clean energy that they might want to meet Zinchik.
Zinchik says his company can produce 200 pounds an hour of material that can be burned to produce electricity, but the cost involved at that scale makes it unprofitable. He said he needs to get to the range of three tons an hour to be profitable, which will require an influx of funding.