(From the Aug. 22, 2011, issue of Rubber & Plastics News)
AKRON—What's harder than trying to take an idea and turn it into a profitable company? Not much in this business.
Two companies—Lehigh Technologies Inc. and Vystar Corp.—give interesting and differing examples of how that can be done. They hope.
The firms do share several characteristics. They both are suppliers to the rubber manufacturing industry, using innovative technology. Each started operations in 2005.
Lehigh Technologies is as green as they come in the rubber business. Its forte is a micronized rubber powder produced from tire chunks and scrap polymer. The company has won acceptance of its product from five of the world's 10 largest tire makers, and is hard on the path to get the other five as customers. Additionally, it is selling to various industrial rubber goods makers, and has entered the plastics and other sectors.
None of this has come easily. Just over two years ago new venture capital firms came in as a new source of investment, and the old management team went out.
The key for Lehigh, according to its CEO, is to get its product into the customer's comfort zone, so they are confident of its performance and the supplier's stability. It's coming, but slowly.
The successful end game for Lehigh will be when the venture capitalists can cash out, via a sale of the firm or an IPO. That's a way off, but the firm is making headway.
Over at Vystar, the innovation is a natural rubber latex that significantly reduces antigenic proteins found in NR latex. It, too, has found that creating a useful and superior product doesn't automatically result in instant success. Customers didn't flock to the high-end product.
Vystar two years ago started emphasizing sales and marketing. It won important deals with Pioneer Balloon and MedicaMetrix, then last month announced it would merge with another customer, EcoGlove Asia Pacific Sdn. Bhd.
It's been a tough haul for Vystar, which remains in the red. Recent increased financing arrangements, its new contracts and the pending merger are what the company believes are needed to get it over the hump.
Lehigh and Vystar both demonstrate a truism for start-ups in the rubber business: the long view is the only way to see success.