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Team Chemistry

Born of UM Research, Rivertop Renewables Aims to Change Chemical Industry

Story by Ginny Merriam
Photos by Todd Goodrich

Jere Kolstad likes to say that after forty years, Don Kiely is about to become an overnight success.

Kiely likes to say he’s just a chemist with an idea based on decades of research: Instead of making so many of the things we use in everyday life out of petrochemicals made of oil or mined minerals like phosphates, let’s make them out of green chemicals made from plants. They do the same work, then they break down and disappear once their jobs are done.

“You wear a diaper for three hours, and it’s in the landfill for 500 years,” Kolstad says. “It’s crazy.”

Kiely is founder and chairman and Kolstad is president and chief financial officer of Rivertop Renewables, a four-year-old progressive chemical company based in Missoula. The company has taken Kiely’s chemistry and is poised to share it with the world—in dishwasher detergents, water systems, and road deicers.

Along the way to that “overnight” success, The University of Montana has nurtured and incubated the research and the company. Private investors and grants have kept Rivertop growing, and a team of professionals has taken it from the scientists’ bench toward the global market. Today, it provides exciting professional jobs for fourteen people who might otherwise have left Missoula for Seattle or other cities known for their startup-company environments.

That’s the blessing and the continued challenge, says Mike Kadas, Rivertop’s director of special projects.

“The complexity of the detergent industry, what goes on, is remarkable,” he says. “You need top-level people. We have to convince investors you don’t have to be in the Bay Area to do this. And you have to attract Ph.D.-level scientists.”

But first, the chemistry.

Kiely, who’s now proudly seventy-four years old, became a leader in carbohydrate chemistry during his twenty-nine years on the faculty at the University of Alabama at Birmingham. In 1997 he joined UM as professor and director of the Shafizadeh Center for Wood and Carbohydrate Chemistry, where he stayed until 2008.

The holder of twelve patents on his work, Kiely studied glucose, the fundamental building block of up to 70 percent of all

plant material. It’s readily available in the corn-refining industry.

“When you talk about renewable resources, the most dominant one is glucose,” Kiely says. “It’s converted into different products that people are interested in. It’s available, it’s cheap, and the whole infrastructure to use it is there.”

Kiely’s research applies to glucose simple chemistry that’s more than 100 years old but has never been tamed or developed. It creates glucaric acid. Glucaric acid can become the building blocks in long chains of molecules called polymers that are used to make things. Think of pearls in a necklace, Kiely explains.

“What glucaric acid did was it provided me with a way to make a whole range of new polymers which were new and different from anything done before,” Kiely says.

The chemical business today—worth $2 trillion a year worldwide—bases the polymers used to make plastics, pharmaceuticals, polyesters, and other products on petroleum. That includes, for instance, disposable diapers, polyester blouses, nylon book bags, polyethylene trash bags, Capilene long underwear,

plastic bottles, and polystyrene cups.

Other products, such as flame retardants and anticorrosive agents, are based on phosphate mined from the Earth. Phosphates have long been an ingredient in dishwasher detergents, but they’re being banned state by state, including in Montana, to protect watersheds.

Products made from glucaric acid can do the same jobs without polluting and without the complexities of the oil market. And glucarate is identified by the U.S. Department of Energy as one of the top twelve renewable chemical building blocks, showing vast economic promise.

Next, the business.

Kiely knew that they were a long way from making glucaric acid in small quantities on the laboratory bench to producing it wholesale in quantities of thousands of pounds at a time, but he thought it could be done. He’s a chemist, not a business entrepreneur, and he wanted his ideas to be preserved and used. Five years ago, with the help of UM’s Office of Technology Transfer, he registered a company with the state of Montana. The company, which he first called Montana Renewable Alternatives, licensed the intellectual property Kiely developed at the UM lab.

Enter Don Kiely’s son, Jason Kiely. Jason, who’s thirty-nine, grew up listening to his dad’s chemistry and understood its promise. He was working in environmental organizing in Missoula.

“At that point, Jason came to my assistance,” Don says. “He was the key person to connect the science, the University, and the business community.”

Jason joined up and is now vice president of marketing and administration. With a small team, they launched Rivertop Renewables—the name refers to its position at the headwaters of renewable chemistry—in 2008. They wrote the business plan at Break Espresso in downtown Missoula and spent hundreds of hours developing the vision.

“Jason is the behind-the-scenes glue,” his father says. “He’s the one who holds all the pieces together.”

Among Jason’s early charges is raising money for the capital-intensive business, and he found financial friends for Rivertop in Montana.

“There are very few venture capital firms here,” Jason says. “But there are people who want to invest in the right idea.”

Investors like the idea of a Missoula-based company that helps employ educated Montanans, and they like supporting the development of green chemistry.

“They like the idea that we want to do something big in Missoula,” Jason says. “The thing about Montana is it’s a great state to grow in because it’s big enough, but it’s small enough that you know everybody.”

The team grew. Kadas, a former Missoula mayor who’s a UM-trained economist, connected Rivertop with a home at the business and technology incubator MonTEC, the Montana Technology Enterprise Center, on East Broadway in Missoula. He also recently assisted the University in securing a U.S. Commerce Department Economic Development Administration grant, with the help of U.S. Senator Max Baucus. The EDA grant was matched by UM to total more than $3.5 million.

Kolstad came along by accident. Based in Seattle, he had just finished a startup software company that sold and was on his way to Glasgow to start a wind farm on his family’s land. He stopped in Missoula to visit a friend from school who knew the Kielys. Kolstad was “completely sidetracked.” It was clear to him that all the ideas needed was someone with the ability to execute them. With seventeen years of experience in startups and a strong financial background, he joined up, too.

“You know they say, ‘Success has 1,000 fathers, and failure is an orphan,’” the Glasgow native says. “Doing something great, something environmentally great, it’s a cool place to be.”

Don Kiely also brought along the firm’s first three chemist employees, all from UM.

“They all worked with me for a number of years,” he says. “These people were engaged from the time they walked in the door. Before there was a door to walk in.”

Research chemist Kylie Presta never thought she’d be knee-deep in concrete and road salt, but she’s now the lab manager at Rivertop.

“I’m interested in what this company represents—greener living and keeping toxic products out of the home,” she says. “It’s good to support that and work in it.”

Ph.D. chemist Tyler Smith came to Missoula by chance, fleeing a doctoral program at the University of Texas that was too big and impersonal for him. A meeting with UM Department of Chemistry Chairman Ed Rosenberg during a visit to Missoula reeled him in. He wound up working for Don Kiely at UM and earning his doctorate. He believed in Kiely’s ideas of short-life chemicals and loved studying in a department where education is still the foundation, he says.

“I had a wonderful experience at The University of Montana,” he says. “The chemistry program is very tight-knit. And the faculty really cares about the students and about turning out the best chemists possible.”

Smith, now Rivertop’s director of research and development, is still astonished at the opportunity to be in on an innovative company from the beginning.

“I believe in Don and what he’s doing,” he says. “I love Missoula. I love the outdoors, and Missoula is an amazing place to raise children.”

And, he says, it’s easier to work in a field that helps preserve the natural world when the mountains surrounding the Missoula Valley are right out the window.

Without Rivertop, he likely would have had to leave Montana for a postdoctoral position in a larger city.

“That’s part of what Rivertop represents in my mind from an economic development point of view—fourteen employees now, the potential for twenty-five more,” says Joe Fanguy, director of technology transfer at UM. “That represents jobs that would not be here otherwise.”

Rivertop’s principals all say, “Without UM, we wouldn’t be here.” But the company is equally valuable to UM, the managing force behind MonTEC.

“They will continue to do a lot of research in partnership with UM as the company’s Missoula operation grows,” Fanguy says. “That’s an enhancement for the University’s research enterprise.”

The company will continue to provide education for UM students through internships and eventual employment. And it’ll bring investment dollars to Missoula.

“Those are all things that we’d like to continue to duplicate,” Fanguy says.

The patents on Kiely’s chemistry are royalty bearing, and when Rivertop turns a profit, UM will get a piece back.

Rivertop also is poised to embark on an expansion that will remodel the MonTEC building and establish the company as the anchor tenant. The EDA grant funds will be used to renovate the business incubator and construct a shell for a pilot plant, called semi-works, which will be funded by Rivertop. The remodel will cover the east half of the building, where space opened recently following the move of Missoula’s convention and visitors bureau to downtown.

Construction will start in January with a wrap-up date set for July. An atrium with skylights will bring light into the labs and take chemists’ offices out of them. Now, for instance, desks share the area where a bank of three dishwashers tests detergents’ ability to prevent spots on glassware.

The pilot plant is key to taking production from the lab to the large scale, says Kadas.

“We have to build a model and see how it works,” he says. “A commercial plant is a $20- to $30-million item. You can’t just go straight from the bench to that.”

In addition, Rivertop has found a contract manufacturer in Danville, Va., that has the equipment and the proximity to raw materials to start making Rivertop’s products. Rivertop’s natural chemicals will first show up as anticorrosion products for road deicers and water-cooling tanks. Then it’s on to dishwasher soaps and concretes.

Two significant events this past fall have further brightened Rivertop’s future. Cultivian Ventures, an Indiana-based venture capital fund focused on high-technology opportunities in food and agriculture, invested $1.5 million in Rivertop in November. Along with the investment came Cultivian co-founder and principal Ron Meeusen, who joined the Rivertop board and brings more than thirty years of experience in taking new technologies and products to market.

“They’re a really good fit for us at this point in our development,” Jason Kiely says. “It’s a big validation in the finance world. And it’s validation for potential customers.”

Also in November, Rivertop connected with one of those customers, contracting with the Montana Department of Transportation to supply 110,000 gallons of bio-based corrosion inhibitor for use with liquid deicers on Montana’s roads this winter. The corrosion inhibitor works to protect infrastructure, such as bridges, from damage by road salts and also offers protection for vehicles.

The contract is exciting because it gets a foot in the market for the Rivertop crew, giving them market experience while they formulate a related chemical.

“I’m always optimistic,” says Smith, “even though there are a lot of challenges. That’s exciting to me. And every day’s a different day here.”

MonTEC Helps Nurture Fledgling Companies

Rivertop Renewables is the perfect example of what’s possible at the Montana Technology Enterprise Center, Missoula’s business and technology incubator known as MonTEC.

Once the renewable chemical company reached a certain phase in its development, it needed a protected place where it had shared support staff and affordable rent. Now it needs to expand, and MonTEC is making that possible. In January construction was scheduled to start at the MonTEC building on East Broadway that will place Rivertop as the anchor tenant and allow it to create a pilot plant.

MonTEC’s existence keeps the company in Missoula, says Joe Fanguy, UM’s director of technology transfer. A federal economic development grant—secured with help from U.S. Senator Max Baucus—with a match from UM pushed expansion into the real world.

“I was excited, they were excited, everybody was so excited, but where were they going to go?” Fanguy says. “How were they going to expand? This has allowed them to stay here.”

UM began the MonTEC enterprise in 2002 in partnership with the Missoula Area Economic Development Corporation. MAEDC managed MonTEC for its first decade of existence, with a specific purpose of transferring UM’s intellectual property to the private sector.

Marcy Allen, executive director of the three-county, federally designated BitterRoot Economic Development District Inc., thinks of MonTEC as the pathway from the research lab to commercialized ideas.

“It’s connecting companies to the resources they need to grow,” she says.

It also helps young companies connect with one another, creating specialty clusters that enhance one another’s work and attract attention from venture capital firms and angel investors. Clean technology business shows special promise for Montana, she says.

In Rivertop’s new position as anchor tenant, Allen sees the company as a mentor to spin-off and smaller companies.

MonTEC has nurtured businesses such as Alter Enterprise, which developed tools and equipment for watching and studying wildlife, and Purity Systems, which pioneered a method of extracting metals from industrial waste for reuse.

Today, with the recent dissolution of MAEDC, MonTEC has its own nonprofit status, and UM has stepped into the management role of the incubator. A new five-member board is in place, with representation from UM, Missoula County, and the Missoula Economic Partnership, and plans to continue its vital role nurturing great-fit enterprises.

MonTEC proves that companies can capitalize on the Montana University System’s brain power to develop professional jobs that keep Montanans here and contribute to a high-level economy, Allen says.

“One of the opportunities we have in Montana is the quality of life this place offers,” she says. “We don’t have to be in Seattle. We can do business anywhere. One of the great things about MonTEC is it can capitalize on that.”

—Ginny Merriam

About the Author Ginny Merriam is a graduate of The University of Montana School of Journalism and worked as an award-winning reporter at the Missoulian newspaper. She writes from Missoula.

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