National Science Foundation Awards Grant to CycleWood Solutions

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Nhiem Cao (left), president and CEO of cycleWood Solutions Inc., and company co-founder Kevin Oden pose with their film sample of a biodegradable plastic. Photo by Russell Cothren, University of Arkansas.

FAYETTEVILLE, Ark. – The National Science Foundation has awarded a $150,000 grant to cycleWood Solutions Inc., a Genesis Technology Incubator client at the University of Arkansas that is working to produce a sustainable alternative to the high-density polyethylene bags currently used in stores.

Nhiem Cao, president and chief executive officer of cycleWood Solutions, said the grant allows the start-up company to continue to develop a prototype for what it calls the XyloBag. The XyloBag will be biodegradable and compostable, which allows it to comply with regulations that are forcing retailers to switch from polyethylene bags. Polyethylene bags harm the environment by polluting the world’s oceans and sitting forever in landfills. They are also expensive to recycle. As a result, cities in 25 states have either banned or are considering banning the use of polyethylene bags.

The single-use XyloBag blends lignin, an abundant organic polymer that is most commonly derived from wood, with a biodegradable material. The bag will degrade in 150 days, Cao said.

The National Science Foundation Phase I grant came through the Small Business Innovation Research Program, which allows federal agencies to stimulate technological innovation in the private sector by strengthening small businesses that meet federal research and development needs. The program is intended also to increase the commercial application of federally supported research results.

“Being awarded an SBIR grant further validates the work we are doing at cycleWood,” Cao said. “We are very excited about this award and will be using it to further develop more lignin-specific chemistry. This moves us closer to our goal of displacing conventional plastics with sustainable alternatives.”

Cao incorporated cycleWood Solutions with co-founder Kevin Oden in the fall of 2011, and their office is at the Arkansas Research and Technology Park in Fayetteville. They are both graduates of the University of Arkansas, each holding a bachelor’s in engineering and a master of business administration.

“I have enjoyed working with Nhiem and Kevin over the past year,” said Phil Stafford, president of the University of Arkansas Technology Development Foundation, which manages the park. “It is good to see their hard work and personal dedication rewarded by this SBIR award. The technological advancement being put forward by cycleWood Solutions stands as proof that the Arkansas Research and Technology Park is a dynamic environment where innovation can flourish.”

Oden said he and Cao are progressing toward a XyloBag prototype and hope to put it into production this year.

“We’re working on the details of every step in the manufacturing process, from making it to washing it to drying it,” Oden said. “If we can secure some customers, we can move on to building our pilot production.”

The University of Minnesota holds the patent on the lignin-based technology. Lignin is a byproduct from paper mills and biofuel plants. After graduating in 2011, Cao and Oden decided to incorporate cycleWood Solutions and pursue an exclusive licensing agreement to produce the XyloBag. A little more than a year ago, they developed a crude piece of biodegradable plastic that could fit in the palm of the hand.

“We made it in my garage in Fayetteville,” Cao said. “It was a nice piece of film, a little flexible. We literally pressed it by standing on it. It wasn’t really much but it was exciting to us to show we could make something. Our film samples now look much better.”

Cao said that in addition to working on the formula for the XyloBag, cycleWood Solutions has filed three provisional patent applications for lignin-related technology.

“We’re still focused on the XyloBag but we realize there is a broader range of products that we can go after,” Cao said. “Our technology seems like it could be a good precursor for low-end carbon fibers used for insulation and non-structural car parts. We’ll be working on converting these into utility patents soon.”

Cao and Oden have collected accolades, cash awards and investors since developing the business concept for cycleWood Solutions two years ago with other M.B.A. students in the New Venture Development class taught by management professor Carol Reeves in the Sam M. Walton College of Business at the U of A.

Last May, cycleWood Solutions received an Edison Award, one of the highest honors a company can receive in the name of innovation and business. The XyloBag was assessed by a panel of more than 3,000 judges and, after a long peer-review process, the team was presented with a bronze Edison Award, named after the American inventor Thomas Edison.

In October 2011, Trailblazer Capital, a venture capital investor focused on companies based in Texas and Oklahoma, committed $750,000 to cycleWood Solutions.

That investment came after a successful run in graduate business plan competitions that netted cycleWood Solutions almost $100,000 in cash awards, including $27,000 at the 2011 Donald W. Reynolds Governor’s Cup. That same year, the team finished fourth at the prestigious Rice University Business Plan Competition and was awarded $5,000 in prize money. CycleWood Solutions, then comprised of Cao, Oden, Jack Avery, Blair Cocanower and Priscila Silva, won the elevator pitch and best sales and marketing plan award at Rice.

The team’s faculty adviser was Reeves, the university’s associate vice provost for entrepreneurship and holder of the Cecil and Gwendolyn Cupp Applied Professorship in Entrepreneurship in the Walton College.

“Carol helped us a lot,” Cao said. “She knows what investors are looking for. She really helps you project a clear, well-mapped business plan that shows where you are and how you are going to get there.”