Kureha, Progenesis Demonstrate CAZ's Reach

By: Kevin DiGregorio
Published in: The State Journal

Economies grow by fits and starts. A large company moves in while another conglomerate moves out. Three small businesses open while another closes its doors. And while the large corporation makes the big news, whether coming or going, statistics show that small businesses have a greater collective impact.

In the end, though, all businesses are vital to West Virginia's collective economy, whether large or small.

The Chemical Alliance Zone (CAZ) participates on both ends of the spectrum, working with large chemical firms in West Virginia and helping attract new ones while also facilitating business growth through the development of small, startup companies. Recent announcements by Kureha, PGA LLC (a subsidiary of the large Japanese firm Kureha Corp.) and Progenesis Technologies LLC (a brand new spin-off from Marshall University) are cases in point.

Kureha recently broke ground for a new chemical plant at DuPont's facility in Belle in Kanawha County. The company will create 50 jobs (plus 250 temporary construction jobs) and spend $100 million on the world's first, commercial-scale plant to make polyglycolic acid (PGA). The new chemical facility is slated to begin production in 2010.

CAZ worked with the West Virginia Development Office, DuPont and the Charleston Area Alliance for several years to help facilitate Kureha's interest and eventual investment in West Virginia. CAZ provided an important link to West Virginia's existing chemical industry, helping to build personal connections and determined Kureha's key issues and needs. More recently, we have worked with local Kureha officials and state work force development groups to help find engineers for the new facility.

Progenesis is a horse of a completely different but no less important color. The company is a biotechnology startup founded by Dr. Richard Niles and Dr. Hongwei Yu, professors at Marshall University.

Dr. Yu discovered a way to produce alginate - and, importantly, large amounts of reliably consistent alginate - from bacteria. Normally, the material is extracted from seaweed, which first must be harvested. If successful, Progenesis will be able to make a consistent product in large vessels, providing a huge advantage over alginate obtained from seaweed.

CAZ is providing space, equipment and services to Progenesis in an incubator at the Dow Technical Center in South Charleston. Progenesis has hired one employee and has outfitted a lab with high-tech equipment in CAZ's Biotechnology and Allied Sciences Incubation Center (BASIC). Drs. Yu and Niles plan to begin full-scale tests of their process in those labs in the near future.

Although Progenesis has hired only one employee so far, more hobs could follow as the firm ramps up its efforts. In fact, Dr. Yu can genetically modify the bacteria to produce different types of alginate now, potentially leading to products for cosmetics and food additives ($250 million market) to products for drug delivery and wound healing ($88 billion).

The company may expand into other areas as well, such as the production of methanol from bacterial digestion of wood pulp and the production of genetically engineered bacteria to treat cancer.

Kureha's initial venture in Belle could spawn further investment in West Virginia, too. In fact, the company already has mentioned the possibility of later expansion., And who knows, maybe the plant will spawn other businesses at or near Belle, bringing companies that use PGA to make other products into West Virginia.

Kureha and Progenesis not only demonstrate the importance of cultivating economic development across the spectrum from startups to conglomerates, but also the importance of cultivating innovation. Economies grow in large part through innovation. Thus, business growth occurs not by coming up with new ideas, processes and products, but by turning new ideas, processes and products into commercial successes. Kureha's innovation is not PGA itself, but a process to produce commercial quantities of the polymer in an economical manner. Companies can make a lot of unique materials, but the trick is often doing so in a way that also brings profits. It doesn't hurt that PGA is a unique polymer that, even in small amounts, provides a superior gas barrier for beverage bottles and other high-performance packaging. Thus, just a little of the material on the inside of your soda bottles will keep the fizz in your Coke and Pepsi.

Progenesis's innovation is genetic manipulation of bacteria, changing the DNA to not only produce alginate, but also to produce large amounts of alginate and even certain types of alginate.

Neat stuff.

The Chemical Alliance Zone will continue to work on neat stuff with Kureha and Progenesis - as well as Bayer, DuPont, Dow and other chemical companies and statewide technology startups - to enhance economic development in West Virginia. CAZ also will continue to work with WVDO and CAA, as well as other economic and work force development groups, to attract chemical and technology firms to the state. And innovation will remain at the forefront of CAZ's mission, too, as CAZ continues to work with MArshall University - as well as West Virginia University, MATRIC, INNOVA, the West Virginia Coalition for Technology-Based Economic Development and others - to increase the number of high-paying jobs in West Virginia.

We need more companies like Kureha and Progenesis.

Let's go get 'em.

Kevin DiGregorio is executive director of the Chemical Alliance Zone, which is based in Charleston.