September 26, 2014 Elements of Innovation

Volume 17 | Issue 7

It's been nearly 25 years since Southern Ionics was founded as a company, and as they near the quarter-century mark, the company is innovati

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In a conversation with Industry Today, Ron Rose, Director of Mining for the company, talks about the illustrious history that has led them to where they are today, an unprecedented investment into a new mining operation, and why an emphasis on diversification will have them impacting both traditional and new markets for many years to come. Steve Engelhardt reports.

Southern Ionics began in 1980, with its founder Milton Sundbeck, a chemical engineer at the time, sparking its first success through his development of a cement thickening method while working out of his garage. From there, the ideas took off.

Discovering a Market
Fifteen years later, Southern Ionics was a company that, although beginning in humble origins, now found itself becoming a major player in the sulfur and aluminum-based chemistry products. “We had established ourselves as a leading option for sulfur and aluminum, but we still had a desire to continue to expand, given our initial success doing so,” says Rose, continuing, “so in 1995, we wound up getting into the zirconium business, specifically the purchasing of zirconium oxychloride, a compound that was beginning to be utilized in a slew of different industries given its broad- based applications.”

They did this through the purchasing of a kidney dialysis-based company, which at the time was developing a kidney dialysis machine that could be used inside a person’s home, rather than at the hospital or specialized facility. “Their machines that they were designing were utilizing disposable cartridges that required three pounds of zircon which would then be converted in zirconium oxychloride.”

With zirconium and its prevalence in kidney dialysis machines, amongst many other applications, Southern Ionics had opened an additional, sustainable market for themselves that they could further facilitate growth through. Eventually the company sold the kidney dialysis company to a team of nephrologists, but maintained their exclusive rights to supply the required zirconium phosphate for the dialysis machines. With much of their zirconium supply coming out of China at an affordable price, it appeared as though it was smooth sailing from there.

Until three years ago, that is, when China, which currently produces about 95 percent of the world’s zirconium supply, began putting them on an allotment, limiting the amount of zirconium they could purchase to a level that was below what they were required to supply the dialysis machines. “This created an issue for us because not only did it threaten our ability to consistently do business with a valued partner, but given zirconium’s role in kidney dialysis, it meant that individuals may not be able to get their supply for their machines at home in time, which could have a significant impact on not only their health but their overall wellbeing as well.”

Mining For Options
In response to China’s decision, Southern Ionics began looking at domestic locations to mine and produce zirconium, and Rose was one of the individuals they brought in to assist with the effort. Having had over eighteen years of experience working for an Australian zirconium mining group prior to joining them, he and his colleagues at Southern Ionics got to work. “Milton and other folks on our research team, myself included, began developing the ‘know how’ on how to produce zirconium oxychloride and identified was exactly was needed to build a plant to generate it,” Rose says.

Now, in 2014, the mine is just about ready to be opened. Based in Charlton County, Ga., Southern Ionics has poured over $100 million into the development of a full-scale mineral sand mine that will serve to create nearly 125 jobs by 2015. There’s just one catch.

“There currently is a surplus of zirconium oxychloride out in the global market right now so the economic incentive to build ZOC isn’t really there at the moment.” However, the silver lining lies in the vast range of uses and applications of zirconium in the open market. “This mineral sand mine, full of both zirconium and titanium minerals, both of which are valuable in their own right on the open market, will become just another strong source of revenue for us to go along with our firmly established presence in aluminum and sulfur chemicals.”

Just how strong of source will this mine be for them, though? “This mine is an unprecedented commitment from our company, and we expect its presence to grow our company by 50 to 100 percent in size and income.” Rose says that the mine will be producing more titanium than zirconium, but is excited for the future prospects of both in the market. “Much of our raw titanium will go towards the creation of titanium dioxide, a conversion process done by outside companies, which can then be sold to paint companies like Sherwin Williams and PPG,” he says.

On the zirconium side, given the element’s strong refractory properties, it can be used in everything from investment castings to jet engine turbine blades. “Due to its extremely high melting point and its ability to reflect light very well, there are a long list of industrial uses for it,” he says, adding, “in fact, at one point, zirconium was used to coat the tiles underneath space shuttles to prevent them from burning up in the atmosphere upon re-entry.”

Rose says that zirconium can also be highly advantageous in cladding nuclear fuel rods. ”Zirconium metal has a special property where it allows a neutron to fly through it, without trapping it, which keeps the rod cool,” he says, continuing, “it has many critical uses, and you’ll find zirconium metal inside every single nuclear power plant, nuclear submarine, and aircraft carrier.”

Finding Flexibility
The integration of titanium and zirconium into Southern Ionics’ chemical arsenal further sheds light upon the company’s longstanding philosophy of diversification in the face of changing markets. “We recognize that the industries we are supplying to are always changing,” he says, adding, “as a result, we have worked hard to create a flexible source of business from industries ranging from zeolites, oil and gas services, and water treatment, to titanium dioxide, pollution abatement, and pulp and paper.”

Southern Ionics’ strategy has vaulted them to where they are today, and has paid off for them, particularly most recently, in a big way.

Rose says that the company achieved all their revenue goals for product volumes and margins in 2013, and are off to an excellent start through the first half of 2014. “This year is looking extremely strong for us, in fact we’re actually projecting record levels of sulfur and aluminum chemical sales,” he says.

When looking at Southern Ionics, one sees a company that has successfully built upon for the itself quite a bit throughout its nearly 25 years of history. With a surge of business form their “mature” markets, and the completion of a mine that looks to double their company in size and enter them into a slew of other industries, it’s to see this Georgia-based chemicals company slowing down anytime soon.

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