Wednesday, 4 November 2009

Dyesol Duo's Power Play

Friday 30/10/2009 Page: 1

The solar power innovators have customers worldwide, writes Peter Switzer

AS the federal opposition grapples with the business and cost challenges of a greener future powered by an emissions trading scheme, an Australian entrepreneurial couple is showing us the innovative potential in terms of both revenue and cost of alternative thinking. The power couple are Sylvia and Gavin Tulloch, founders of the Australian listed company Dyesol. This is a company with a genuine outside-the-square product that is attracting the attention of foreign companies looking to tap into the world's growing appetite for alternative forms of energy.

The company, with a market cap of about $100 million, has 70 staff, with 50 in Australia, 15 in Wales and others in Italy, Switzerland, Japan and the US. Not bad for an operation headquartered in Queanbeyan, in regional NSW, but which is only a stone's throw from tech-savvy Canberra. So, what exactly does this award winning business do? "The Dyesol group is the world leader in development and commercialisation of third-generation photovoltaics solar cells that mimic nature based on the principles of photosynthesis and nanotechnology," Sylvia Tulloch explains. "These third-generation devices are called dye solar cells."

Dyesol develops, manufactures and supplies a range of DSSC products, including equipment, chemicals, materials, components and related services, to DSSC researchers and manufacturers, and works with partners and customers to integrate the technology into their products. This is a seriously out-there business, in the right place at the right time, as the world turns green and alternative. This follows the price of oil hitting nearly $US150 a barrel last year and devotees of Al Gore's film An Inconvenient Truth suspecting climate change can be put down to man's power-generating habits. And while the world is sitting up and taking notice of Dyesol, there's particularly strong support coming from the mother country.

This might sound surprising considering our recent experience with cricket against England, which reminded us of the extent to which sunlight faces a battle with clouds and rain over there. We have a subsidiary in the UK with 15 staff, most of whom work on our project with Corus, the company which used to be called British Steel," Tulloch says. "We have smaller subsidiaries in Italy, Switzerland and US." Corns is developing solar steel roofing and cladding. The pilot plant was commissioned in June and the plan, all going well, is to have a volume manufacturing plant operating in 2011. Corns manufactures 100 million sqms of steel cladding a year and intends 20 million sqms to be solar steel by 2016.

But is it a good idea to try to create energy through the interaction of the Dyesol product coated on roof cladding in a country not renowned for sunny days? "Dyesol's solar technology works well in all light conditions; it doesn't need bright sunlight," Tulloch says. "The layers of a DSSC can be deposited on a range of products, such as facade glass and steel rooting." In a nutshell, the technology mimics the photosynthesis process of trees and plants, and can be used in many applications that would be impossible for conventional photovoltaic technology, meaning the voltage is more or less independent of light levels.

The energy created can easily power a house and the surplus can be pumped into the grid. As I said, this is an out-there business. So, how did it happen? "Gavin and I are scientists whose earlier careers were in the Australian subsidiaries of multinational advanced technology businesses, and [we] decided to set up our own business around 20 years ago," Tulloch says. "In those businesses, we learned business management at a fairly sophisticated level, which we combined with our interest in innovation and commercialisation."

Finding or creating a product with potential is one thing but successfully commercialising it and launching an ASX listed company is another. "Commercialising DSSC has been a team effort," Tulloch says. "When we set up Dyesol, I was the founding managing director and developed the business strategy, and was responsible for corporate positioning, investor relationships and the Australian operations. "Gavin was responsible for developing the international business, international subsidiaries and relationships." But how does an Aussie company take up the running on such a product? As scientists, we fell in love with the technology: it is fascinating science," she points out. "Then, in 1998, we learned about global warming and decided that commercialising this technology was important to the future; where we lived really didn't play a role."

Scientists they might be and it helped them see the opportunity, but it was another quality they shared that explains why their dream has become a commercial reality. "We are both entrepreneurial and over the years we have both picked up pretty sound financial skill-sets," Tulloch says. In fact, their scientific and research background partly explains the Tullochs' success, because R&D companies need to know how to play the grants game.

"A company such as Dyesol brings both private and national benefits," Tulloch says. "To maximise the national benefits it requires public co-investment. "What we learned is that grants and subsidies tend to wax and wane, especially in Australia, so it was important for us to have a global focus, rather than be dependent on grants in Australia" Wherever grants are given, there are requirements for local content, so the decision to work in overseas subsidiaries enabled them to take advantage of grants available overseas. And the work has been nationally and internationally recognised. "Dyesol was included in the top 100 low carbon pioneers on CNBC Europe in 2008," Tulloch says. "And recently we won the ACT Chief Minister's 2009 export award for small-medium manufacturer expert."

And what about the experience taking their baby to the hard, cold world of being a public company in a global financial crisis world? We listed in Aug '05, with a share price of 20c; it's now 80c," Tulloch says proudly. "Prior to that, the DSSC project had been in a small public company called Sustainable Technologies, of which Gavin and I were also among the founders. When the board of Sustainable Technologies decided to close the project, we did an MBO [management by objectives] of the solar operations, and then operated as a private company from 2000 to 2005." On the impact of the GFC, Tulloch recounts how the share prices of all solar companies were affected. But of the 70 solar companies listed on exchanges internationally, Dyesol's market performed sixth best out of their 70 rivals.

And with the GFC fading from view, what does the future hold? "For Dyesol, the future is a rapid expansion of demand and building new relationships with large corporations who have registered interest in incorporating DSSC into their product ranges," Tulloch says. "For me, I am broadening my interest in commercialisation and am now also on the boards of EcoQuest (ECQ), a company which is developing biodegradable products, and Sensol, a private company development acoustic sensors, and am a member of the Future Manufacturing Industries Innovation Council, which advises the Australian minister for industry."

On the challenges ahead, Tulloch singles out dealing with very large corporations. "It is something like dancing with dinosaurs," she admits. On how Tulloch copes with the growth challenge and remains motivated, her answers are both typically entrepreneurial and scientific. "I'm a glass-half-full person," she points out. "I soon move past frustrations. "And I love feeling I'm making a useful contribution," she says.

Peter Switzer is a founding director of Switzer Business Coaching.