Edinburg's top economic official works to water seeds of commerce, innovation

Pedro Salazar firmed his grip on the pen and wrung it like a wet towel, stretching skin tight across his knuckles.

His arms resting on the office conference table, Salazar leaned forward in his chair, listening in on a conference call he had arranged between two hedge fund managers and the top executive of the Edinburg-based startup FibeRio.

FibeRio, formed in late 2009 to market a new process to make nanofibers created by researchers at the University of Texas-Pan American, needs money. Salazar, the new president and chief executive officer of Edinburg’s Economic Development Corp. had made finding that funding his concern.

In his first weeks at the EDC, Salazar has made ambitious plans to build on the work of his predecessors, while relying on his financing expertise from years in the banking world to help existing firms like FibeRio find investment dollars and grow.

On a recent Monday, Salazar spent the morning in a succession of meetings with several firms — all with the same theme. While each company had its own “revolutionary” technology, they all needed money and Salazar was trying to help on an otherwise unremarkable day.

The morning began at UTPA, where Salazar had arranged for researchers to study Mag-Tek Inc.’s magnetic fluid conditioners.

The Edinburg manufacturer produces metal pipes that prevent paraffin wax from building up in oil lines and in diesel engines by using magnets. It can also prevent the build up of calcium and magnesium in drinking water, said Jerry Davis, the company’s CEO.

Ultimately, the EDC would like to help Mag-Tek land more local contracts, perhaps with the city of Edinburg to help treat its drinking water. First, Salazar said it would be important for a local university to study the technology and prove that it works — something the U.S. Department of Energy has already done. New contracts would lead to new jobs at the company, which now has just three employees.

“Whenever you have technology-oriented stuff, people are somewhat reluctant and skeptical,” Salazar said. “(They need) a local person to be able to say, ‘I reviewed all this information and it’s not snake oil.’”

Economic development officials like Salazar are most visible when they help funnel incentives such as tax breaks to attract new businesses and create more jobs for their city’s citizens. Fostering that growth is stressful and fraught with failures, like several notable Edinburg projects of recent years — the water park and the Alamo Drafthouse, for example.

Salazar said that successful economic development is contingent on coordination between all levels of government, private businesses and the university. The work with Mag-Tek, he said, is one example of how he is fostering that cooperation. FibeRio is another.

From a phone in Austin, FibeRio CEO Ellery Buchanan pitched his company’s “revolutionary” process to develop nanofibers that eliminates the use of electricity and relies on gravity to spin the microscopic particles into threads on a spindle like cotton candy. Researchers have said it makes nanofibers cheaper to produce and will eventually lead to more developments in their use.

But no one is using the process yet. The company needs about $1.5 million in private investment so it can market the process to other researchers and private businesses — money Salazar hoped to get from the hedge fund managers, who were already working on another project in Edinburg.

After the FibeRio meeting, Salazar met with Rodolfo Sanchez, president and CEO of the Monterrey-based Plasma Gasification and Engineering Corp. The company said it has developed a technology that uses microwaves to turn trash into gas and route that gas through turbines to produce electricity. The process can also refine the gas and distill it into liquid to produce bio-fuels, Sanchez said.

This isn’t new technology, but the company claims their process produces eight times more energy than it uses to microwave the trash, Salazar said. Existing processes have a 1-to-1 ratio, he added.

Salazar would like to help the company produce a pitch for city officials to use their technology on the city’s waste dump, but first, he wanted the process proven by UTPA.

Salazar wrung his pen as Sanchez updated him on the university’s progress. 

If all goes well, the hedge fund managers will invest in the company, Salazar said.

Earlier Monday, Kial Gramley, vice president of marketing and business development for FibeRio, sat across the table from Salazar, listening quietly with his head down and taking notes as his boss made the pitch. Gramley’s job, about 80 percent of his time, he said, is to find money.

The hedge fund managers weren’t interested in investing, they said, because the company was not a good fit for their investment portfolio, which is more focused on “green energy.” Neither Gramley nor Salazar seemed all that disappointed and even if they were, neither would violate

business decorum by showing it.

The investors had asked FibeRio to send more details that they would forward along to some friends, perhaps leading to more financing.

“Thanks for the call. I think this is going to be beneficial,” Salazar said. “We look forward to working with you guys on those other projects.”

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Sean Gaffney covers business, the economy and general assignments for The Monitor. He can be reached at (956) 683-4434.