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From Recycled Magnets to Polymers, New Materials Take off in San Marcos, Texas

A tour of manufacturing in and around Texas State University highlights product innovation born from research.

During a visit to San Marcos, Texas, last month, I visited four diverse manufacturers, both in size and product type. Three of the four are developing products using new materials—examples of the spillover of technology research related to the Materials Science, Engineering and Commercialization (MSEC) program at Texas State University.

Here is a look at where we visited, who we talked with and the exciting mix of technology and manufacturing we saw, from recycled rare earth magnets to polymers for Formula One race cars.

Urban Mining Company is still in Austin, waiting to relocate to San Marcos later this year, when their 100,000-square-foot building is ready. CEO Scott Dunn, a graduate of the U.S. Naval Academy and the University of Southern California, started the company in 2015. Urban Mining produces high-performance magnets from recycled rare-earth materials.

In the early days of the company, Dunn spent a lot of time in China building relationships, so he could buy down time from factory owners that had overcapacity.

In the meantime, he sought investors from around the United States “because we wanted to be able to commercialize our technology very quickly. Out of 90 to 100 investor groups [that were interested in the business], only a few fit our bill.”

In June 2016, the company secured $25 million in first-round venture capital funding to build a rare-earth magnet manufacturing facility in the U.S. “After careful consideration, we chose San Marcos because it offers the skilled workforce and infrastructure needed to support our fast-growing operation,” Dunn said.

Once the facility is complete, Urban Mining expects to add more than 100 manufacturing and technology jobs to the region.

Urban Mining also spent a lot of time and money initially protecting its intellectual property with patents. “We knew that we had original technology and had to be able to protect it,” Dunn said.

The factory relationships that Dunn has built in China have gone a long way toward supplying components—including hard disks and motors—to use for recycling the rare-earth material.

Urban Mining is the only company producing Neodymium Iron Boron (Nd-Fe-B) rare earth permanent magnets, said Dunn. The recycling process uses zero chemical inputs and wastewater.
The magnets are used in technology development and applications across the consumer, medicine, defense, aerospace, clean energy, and industrial sectors. Urban Mining is working with companies including Tesla, GM, Ford, Raytheon, Northrop Grumman and Boeing to develop products for the commercial and military/defense industries.

“I believe that reusing rare magnets is critical to a cleaner future, and we have created a closed loop supply chain to upcycle these materials into products that can have a positive impact,” said Dunn.

“Most people don’t understand the ubiquity of magnets,” added Dunn.

Availability of high-performance magnets became an issue in 2010, when the only rare earth mine and production facility in the U. S., MolyCorp Inc., went into bankruptcy, and the assets were bought by Chinalco’s subsidiary, Shenghe Resources in 2011. The equipment was dismantled and moved China.

“It’s critical that we develop this technology because China has the goal of controlling the supply of rare earth products by 2025,” said Dunn. “If they succeed, then they could control the world. “

Paratus Diagnostics, a firm that specializes in medical devices for point-of-care diagnostics, was one of two manufacturers we visited at STAR Park, Texas State University’s incubator.

Paratus CEO John C. Carrano founded the company in 2012, and it moved to the incubator 2 ½ years ago. The company is developing a handheld medical testing device called PreparedNow that delivers results quickly, allowing clinicians to make decisions during patient visits that could improve outcomes. The first diagnostic test available on the device will be a periodontal test where there is “zero competition in the market,” said Carrano. Results, displayed on a smartphone with color bar graphs, are available in six minutes.

“We are well past the startup phase and are about 18 months away from being cash positive,” Carrano said. “It’s a long and complex product development cycle for medical devices. Medical diagnostics is not viewed by investors as a get-rich-quick kind of venture, but it is going to be a $10 billion industry in the future. “

Carrano has deep military, technological and research expertise that includes 24 years in the Army. An electrical engineer with a bachelor’s degree from West Point and a doctorate from the University of Texas at Austin, he was a program manager at DARPA, where he led several major Defense Department programs related to bio-sensing after the 2001 anthrax attacks in Washington. Before founding Paratus, he was vice president of research and development at Luminex Corp., a medical device company, and developed an implantable device to diagnose a medical threat.

Having raised $5 million in private equity from angel investors, the company has 26 full-time employees and will probably be up to 37 by year’s end. “We also have grants and plan to launch the product into the marketplace in about 18 months,” said Carrano.

Blueshift Materials, also in the STAR Park incubator, was founded in 2013 by Tim Burbey, now the company’s president, and Garrett Poe to commercialize polymer aerogels. In 2014, Blueshift became an affiliate of pressure-sensitive film product manufacturer FLEXcon,

In 2015, Blueshift launched its AeroZero product line—an aerogel similar to foam that consists of 85% air. The products were designed to meet customer demand for a clean, lightweight, small footprint insulation material that can easily be incorporated into composites. They are made in a batch rather than continuous process.

“It starts out as a polyimide resin and through a proprietary process, it is transformed into the various aerogel products,” said Burbey. The new manufacturing process will take only minutes vs. weeks, “which will greatly reduce cost and open new markets.”

Burbey showed me several different shapes and styles of the products they can make now, from blocks to film to powder. The material has good properties for thermal management. Since it is 100% plastic, it is very good for incorporating into composites. The products have applications in the aerospace, cryogenic, membrane separation, radio electronics and automotive industries.

“We make a film for a Formula One race car by adding it to Kapton,” added Burbey. “We work with a lot of electronics and RF product companies. Our materials have RF transparency, so will allow signals to go through, but they also provide thermal management.”

The aerogels can also withstand temperature extremes from -200 to 300 degrees Celcius, and have a high strength-to-weight ratio.

Blueshift moved into the STAR Park incubator in the fall of 2016 , and also has an applications engineering lab facility in New Braunfels, Texas, about 20 miles southwest of San Marcos. The company polymerizes its own materials from polyimide at our facility in San Antonio, TX.

Blueshift has good relationship with the Materials Science, Engineering, and Commercialization (MSEC) program at Texas State University and has hired graduates, said Burbey.

Research and development projects include teaming up with a Palo Alto research company to “look at using different polymers besides polymide.” and, thanks to a $3 million Department of Energy grant, developing transparent and thermally insulating Aerogel for single-pane windows “as part of a project to restore historic windows in the Northeast.”

Bautex Systems LLC is focused on providing builders and architects with smarter, stronger, more versatile building materials and solutions. Bautex President Paul Brown is a serial entrepreneur with an MBA from Duke University. He has enjoyed a diverse career working in industries ranging from technology and telecommunications to construction products.

The company manufactures the Bautex Wall System, a proprietary cement mixture and expanded polystyrene for interior and exterior walls for commercial and residential construction. It combines structure, enclosure, continuous insulation and air and moisture protection in a single, integrated assembly that can be installed by a single contractor—saving time, effort and cost. The system provides 26% more energy savings than what new building energy codes require.

Bautex moved back to Austin during the dot.com bust and was involved in a VOIP company. But he wanted to build houses, and found a technology very similar to Bautex. He invested in the company, but wanted to do manufacturing in the right way, and that company needed a better manufacturing process.

In 2008, Brown and business partner Oliver Lee found the right machine in Europe, so had some custom molds made and took them over to Europe. They rented factory time for two weeks and replaced the wood filler with polystyrene to make blocks.

“We mixed the ingredients together and poured it into the mold,” recalled Brown. “It was an expensive and slow process. We added sand to the blocks and reduced cycle time to 30 seconds to make four 32 X 16-inch blocks in the mold. We had a goal of a weight of less than 50 lbs.”

They then spent a couple of years doing R&D before moving the operation to San Marcos. In 2013, they started shipping products and now have six plants along the I-35 corridor.

Brown thinks the U.S. needs a new paradigm for construction. “The process has to be better,” he said. When you analyze building construction, 90% of the work to build a house is non-value-added. We need to reduce the costs of construction, and the buildings need to perform better. We had five buildings that were within five miles of Hurricane Harvey, and they did well.”

Six of the ten fastest growing U.S. counties are in Texas, Brown said, “but the access to labor for the construction industry is not here. There is a shortage of masons in Texas. Panelization in construction is appealing to a new generation of contractors,” but the industry has not yet embraced new technology.

In 2020, a new building code will take effect, and each code changes pushes the bar higher.

“We are now building one- to three-story buildings, and we can build faster than traditional construction methods,” said Brown. “We have been nearly 99% commercial, but now we are going after residential work."

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