Soy Insulation Draws Rogers Entrepreneurs

Somewhere, a tree is sighing a breath of relief and soybean farmers are cheering. Why?r

Because every home built with recycled steel and BioBase soybean foam insulation uses an average of 20 bushels of soybeans, pulls six old cars out of a landfill and saves an acre of trees.r

Next Generation Industries Inc. of Rogers, along with sister company BioBased Systems of Spring Valley, Ill., have created a soybean-based polyurethane foam insulation that its owners say will save oil and decrease production costs while making homes 25 to 50 percent more energy efficient.r

And it has made believers out of investors and builders in Northwest Arkansas.r

BioBase 501 foam is 10 to 30 percent cheaper per SF than petroleum-based foam insulation and performs in similar capacity to petroleum-based foam insulation, said Grant Swede, spokesperson for BioBase.r

“Petroleum-based foam, at least at the time when I was looking at the product, was slightly more expensive because of the oil prices at that time,” said Joe Rogers, an architect with Mobley Architects in Fayetteville. He used BioBase foam during the construction of his 5,000-SF home in Washington County.r

r

Birth of BioBaser

Five years ago, Tom Kurth, now CEO of BioBased Systems, and Bob Turner, the former head scientist at Dow Chemical Co., received a $100,000 research grant from the United Soybean Board. The two developed a soybean polyal and obtained a patent. The research eventually led to the development of the company’s signature product, BioBase 501. BioBase is still a work in progress, with research and development of polyals continuing. BioBase 501 received national recognition when it won the Outstanding Green Product award from the National Green Building conference in Baltimore this year. r

The soy foam has sold mostly in Midwest markets and has a sales concentration in Northwest Arkansas, home to both the manufacturing process and several of the investors.r

In June 2002, J.B. Hunt, Ben Israel and other investors bought the former Emerson Electric Building in Rogers from the Emerson Charitable Trust to have a space to make steel framing and produce BioBase insulation. The group also bought out Mike Phillips’ seven-year-old steel framing business in Little Rock in 2002. The company offers environmentally-friendly products to its customers — from steel framing made from recycled steel, to petroleum-saving soy oil-based insulation, to transplanted trees.r

The Natural State is the largest consumer of the BioBase insulation since its introduction into the market nine months ago. r

Next Generation Industries Inc. is the umbrella company with a majority ownership in BioBased Systems as well as Envision Printing, Next Generation Builder Showroom and Supply, Next Generation Thermal Insulation, Next Generation Steel Systems, Maverick Sound and Dixie Tree Transplanting. Next Generation investors are Israel, Hunt, Phil Phillips and Tom Muccio. Trey Trumbo and Mike Muccio are managing partners of the development. r

Next Generation is the distributor for the foam insulation in Oklahoma, Missouri and Arkansas. Next Generation Thermal Insulation, as a distributor for BioBase, can sell individual franchise rights within those states. BioBase, of which Next Generation is a majority owner, has distributors in Texas, Florida, Minnesota, Iowa, Illinois and North Carolina.r

“One of the things that is really exciting is the diversity of experience the six of us have,” Tom Muccio said. “It makes for pretty spirited meetings, but we kind of think that iron sharpens iron.”r

r

Making Centsr

Ben Israel, owner of Dixie Development and Dixie Real Estate of Fayetteville, said the product is something that makes economic sense for builders.r

“From a commercial standpoint, we always figure about a dollar and quarter utility costs [per SF] if we do standard insulation,” Israel said. “This is about 65-70 cents per SF, so we are saving 40-50 cents per SF a year in utility costs.” r

Israel said the soybean-based foam insulation makes sense for the owner who pays utility costs for the building or for an owner who will pass the utility costs on to the tenant.r

“It makes sense for us to pay a little more for the building and the tenant to pay 25 cents more per SF in rent in order to save 50 cents per SF in utilities,” Israel said.r

According to Next Generation Industries, for every $1 increase in mortgage payments that result from using BioBase 501 insulation versus conventional insulation, buyers get a monthly payback of 10-15 times that because of reduced utility bills.r

Next Generation, along with Dixie Development, is the developer of the 94-lot Silverstone subdivision in Springdale, the 96-lot Sage Meadows in Fayetteville and has plans for 40 homes in Steel Creek subdivision in Springdale and 138 lots in Huntsville. Homes in Silverstone range from 1,300-1,500 SF and homes in Sage Meadows range from 1,500-2,200 SF. Several Next Generation homes are being built off of Skyline Drive in Little Rock and Next Generation just opened a full insulation operation there. The Social Security building in Miami, Okla., was built using BioBase.r

Fantastic Foamr

It takes about 12 hours to insulate a 1,500-2,000 SF house with BioBase using a three-man applicator team when the chemicals for the insulation are mixed on the job site. It takes a comparable amount of time to apply fiberglass insulation, said Tim McMahon of McMahon Brothers Custom Homes in Fayetteville. r

“You have an A side and a B side that are mixed together in the truck in a proportioning unit,” said Jim Cronkwright, president and general manager of Next Generation Thermal Insulation. r

“They go through the hose from the truck and then the A side and B side meet at the nozzle and they are sprayed together.”r

With BioBase, Cronkwright said, the chemical reaction takes place at the nozzle when the two sides meet creating a liquid that expands 100 times its original size in about 10 seconds. r

“As it expands, it creates an air barrier as it seals everything it comes in contact with,” Cronkwright said.r

Mike Muccio said the product’s drying capability is an advantage to builders.r

“When the builders are working, they don’t have to wait days for the product to dry out to put Sheetrock on.” said Mike Muccio. “You can put Sheetrock on immediately.”r

Others in the construction business agree that BioBase has benefits. Hannah McNeill, a project manager with Criterion Architecture in Fayetteville, said she has recommended the Next Generation product to clients who are looking at BioBase or cellulose insulation. McNeill said the ease of construction is a big selling point.r

“If it goes in, it’s not coming out and it can’t be pushed out,” McNeill said. “Most jobs, depending on when you put the insulation in, you think you have everything done but you don’t. This product is a little better to deal with than cellulose because I’ve seen cellulose over time get knocked out.”r

McNeill said damage to insulation could reduce the R-Value (Thermal Resistively). r

The time that passes in between insulation installation and finish can vary, leaving the insulation exposed to the elements. McNeill said that cellulose insulation loses its R-value when it gets wet, something that wouldn’t happen with BioBase because the product is virtually airtight. r

The fire-resistant capabilities of the foam are also attractive to builders, since the foam has a Class 1 fire rating.r

“One of the things that was stressed was that it won’t burn,” said Shep Akins of Shep Akins Custom Homes in Fayetteville. “That was enough for me to listen to what the product was about, then of course price became an issue.”r

Akins said that once he saw the insulation could save money in other areas, he felt that it offset the difference in price.r

“Where we used to have to allow for a lot of insulation, we don’t have to do that anymore,” Akins said. “Once you see it applied, it kind of sells itself.”r

Akins is building a 9,000-SF home with BioBase insulation off of Old Wire Road in Fayetteville. He said that this custom home client was concerned about allergies and found the dust-free qualities of the insulation to be a big selling point.r

The investors of Next Generation Industries are hoping that more builders and buyers will latch on to their idea as the product becomes more familiar. Ben Israel compares it to contact lenses.r

“I was an eye doctor for a long time and when soft contact lenses came in, everyone said they would ruin your eyes,” Israel said. “Now nobody has heard of a hard contact. That is what is going to happen in this industry as people become aware of how well it works and saves money.”