XyloBag garners national attention

by The City Wire staff ([email protected]) 129 views 

Ever wonder what happens to the millions of plastic shopping bags that leave grocery stores every day?

They go to landfills, rivers, oceans and sewage systems. They kill wildlife and contribute to flooding. They do such significant environmental damage that eight countries have completely banned plastic bags, and cities in 25 states have passed or considered passing legislation restricting their use.

But a local start-up may very well have discovered the solution. Operated by four University of Arkansas alumni, cycleWood Solutions is developing the XyloBag — a completely biodegradable bag made of lignin-based plastic. (Lignin is derived from wood, plant cells and certain algae.)

"The difference between our bag and other conventional plastic bags is that ours is biodegradable," said Nheim Cao, cycleWood president and CEO. "The strength properties should be fairly similar. Once the resin is made, you can put it in any manufacturer's molding equipment. They would just switch from regular plastics to our material. The equipment doesn't have to change."

The price should be pretty similar, too. Cao said Walmart pays approximately 1.2 cents per plastic bag, and the XyloBag should cost just between 1.5 to 2 cents per bag. Another advantage is that consumers don't have to change their disposal habits. The bags can be thrown in the garbage or even added to compost piles, and they'll biodegrade in just 150 days once in a natural environment.

One million plastic bags are consumed globally every minute, according to the company's website. Domestic consumption amounts to 100 billion bags and a $4 billion industry.

And though the XyloBag is still in its development stage, Cao said he expects a pilot run with actual bags by the end of the summer. He's already been in contact with several manufacturers, and hopes to give the bags a run in a few local Northwest Arkansas grocery stores.

Cao works alongside chief operating officer Kevin Oden, chief marketing officer Priscila Silva and chief business development officer Jack Avery. The team came together while in a class with Carol Reeves, UA associate vice provost for entrepreneurship.

Reeves has advised them along the way and helped them through a litany of entrepreneurship competitions across the country, both while they were students and in their time as professionals since.

Most recently cycleWood was one of three finalists in the sustainability category for the prestigious 2012 Edison Awards. The winners will be announced next month at the annual conference in New York.

These young entrepreneurs won about $75,000 in funding through the competitions and added about $35,000 of their own money. But cycleWood's largest investment came after they caught the eye of Dallas-based venture capitalist, Trailblazer Capital, which invested $750,000.

The money will be enough to last cycleWood through the end of the XyloBag's pilot stage, Oden said. Once the time comes for commercial production of the bag, however, more will be needed, though that doesn't seem like it will be difficult.

Cao said cycleWood turned down several investment offers before going with Trailblazer Capital.

Cao said the long-term plan is to continue perfecting the product and getting it in some local grocery stories, and to eventually sell the company.

"At some point, it'll need to be handed off to someone else to expand it to a global scale," Cao said. "More than likely, we'll end up exiting. I could be an IPO, it could be through someone else just acquiring us outright. That's more likely to happen than for us to keep it. To expand quickly, we'll have to look at those other options.

The estimated timeline, Cao said, is about five or six years.

"I think (cycleWood Solutions) has an incredible future," Reeves said. "If they can get their bags perfected, I think they are going to be successful beyond their wildest dreams. … Given the variety of applications of their core technology, I would not be at all surprised to see their names mentioned alongside Sam Walton, Don Tyson, and J.B. Hunt in 20 years’ time."