Cleaning up overseas
Big business abroad could boost local environmental sector
Chris Richards / Staff
Prabhu Dayal, Tucson co-chairman for Arizona's ETIC, holds a light that is powered by a renewable energy fuel cell.
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By Paola Banchero
ARIZONA DAILY STAR
Tucson's environmental technology firms, from recyclers to handlers of industrial waste, are looking to expand their horizons overseas as the demand grows there for clean, affordable energy sources.
It's growing faster than in the United States, industry representatives say, so capitalizing on it by providing products and services can help the industry bring Tucson more of the well-paying high-tech jobs it craves. Today, only 9 percent of Arizona's $2.2 billion in environmental technology sales are made overseas, which puts the state's industry 28th in the nation.
"Other countries are interested in U.S. technology," said Prabhu Dayal, co-chair in Tucson of the 200-member industry group called the Environmental Technology Industry Cluster. "They are more adaptable to using smaller technologies and technologies from renewable energy sources than we in the United States are.
Dayal is on a trade mission to Sri Lanka and the Maldives in the Indian Ocean this week to promote Arizona's industry cluster in meetings with government and business leaders. He is also meeting with international organizations working to provide electricity to developing nations without damaging the environment.
Arizona is primed to help fill the growing global demand, with help from special financing now available for such projects, said Doug Aiken, a trade specialist with the state Department of Commerce.
"You've got to go where the money is and there are a lot of grants for environmental technology projects in developing nations. The money will help cluster members generate sales for U.S. companies," said Aiken, who has helped the cluster prepare for the mission.
Electric opening
An example of a global opportunity for Tucson firms is bringing electricity to the developing world. International groups are helping by granting money to projects with environmental technology at their core. These organizations include the Global Environment Facility, which is affiliated with the World Bank, and the United States-Asia Environmental Partnership, which promotes environmentally sustainable development in Asia.
"Two billion people in developing countries don't have electricity. That's a third of the world's population," said Eric Martinot, climate change program manager for the environment facility. "We're trying to overcome the barriers to electrification and reach a sizable number of people."
The facility is expanding the market for solar home systems, which sell for about $400 in Sri Lanka. That's enough electricity to provide lighting and a few hours of television every night.
Because Sri Lanka has a well-developed banking sector, the facility has established a microcredit program for Sri Lankan consumers to borrow money to buy the systems. These programs, which lend small amounts of money, give companies that otherwise would shy away from the market an incentive to invest in renewable energy. Rather than placing the burden of financing the purchase of the systems on companies, the microcredit program allows Sri Lanka's banks to lend to consumers. Shell Renewables, part of Royal Dutch/Shell, has entered the market, as a result.
World history
Tucson has always driven the international efforts of the statewide industry cluster, beginning in 1995 - three years after the cluster was founded.
A third of the more than 200 companies in the cluster are based in Tucson. The group has three co-chairs, in Phoenix and Flagstaff as well as Dayal in Tucson.
Tucson's first co-chair, Richard Carter, helped the cluster win $121,000 in federal seed money to tap into the Taiwanese market. The effort, which included a fact-finding mission to Taiwan and follow-up visits, yielded an estimated $20 million from Taiwan in sales and services for local companies during a five-year period.
Now, the state cluster boasts a number of companies that do business abroad. Most environmental technology companies are small outfits with fewer than 10 employees, but the cluster helps them sell themselves as a collective unit with more than $2 billion in sales and diverse expertise.
Dayal is actively pursuing business opportunities in Asia and elsewhere. He worked 15 years for Tucson Electric Power Co., developing environmental protection programs such as the collection of methane gas from the Los Reales Landfill for burning in microturbines to produce electricity. The project reduced the use of coal and cut emissions at the Irvington Road generating station.
Dayal left TEP in January to work on the consulting firm, C*Trade, that he launched in 1998. C*Trade is involved in projects like microturbine technology and carbon "credits," a feature of the Kyoto accord signed last week by 178 nations.
The goal of the accord is to cut greenhouse gas emissions linked to global warming. It allows countries to earn credits for areas like forests and farmland that pull carbon dioxide, a greenhouse gas, from the air. Dayal advises countries interested in using the credits, and his work has taken him to Singapore and Argentina.
Quiet cluster
Environmental technology may be the quietest of the six Tucson industry clusters.
"The cluster is better known in Washington, D.C., and among organizations that know international trade than it is here," the Commerce Department's Aiken said.
One of the well-hidden companies in the cluster is Zeta Corp., run by entrepreneur Michael Pitts. Pitts makes half his sales in international markets, and says other small tech companies could do the same.
Zeta Corp. sells a technology that causes harmful bacteria to disintegrate cheaply and without chemicals. The product can be used in cooling towers at oil refineries and power plants, which are prone to bacterial contamination.
Zeta's products are available in Taiwan, Singapore, Mexico, Canada, the United Kingdom, France, Spain and soon, Pitts hopes, mainland China.
"The United States is technology-rich," he said. "If you come up with another technology, everyone says ho-hum unless you have tremendous marketing abilities - typically what small companies don't have. If you take your product overseas, it's a different story. People want to hear what you have to say."
Besides the Sri Lanka trade mission, the cluster is working on a project in Malaysia. A center of semiconductor production in Southeast Asia, Malaysia is interested in pollution-control processes that Tucsonan Mic Fuhrman developed for Motorola.
Tucson showcase
The state cluster will showcase its international trade efforts next month at a conference in Tucson. The Aug. 29 event will focus on renewable and sustainable energy and how the cluster can sell such technology to developing nations.
Representatives from the Global Environment Facility, the Asian Development Bank, the Arizona Department of Commerce and cluster members plan to be there to hear about the cluster's work and to get the ear of U.S. Rep. Jim Kolbe, chairman of the House Appropriations subcommittee on foreign operations.
"We've been the best at using available resources to give Tucson and Arizona environmental technology companies exporting opportunities," said Jeff Tye, vice president of operations at Intersect Technologies and the former cluster co-chair for Tucson. "The conference is only going to help us shine more light on our activities."
* Contact Star Business reporter Paola Banchero at 573-4237 or banchero@azstarnet.com.
