Caterpillar to Help Market CleanAIR's Emissions-Control Systems

New Mexico Business Weekly - July 11-17, 2008

Santa Fe-based CleanAIR Systems, Inc. expects revenue to triple in the next 12 months, thanks to a new marketing agreement with global giant Caterpillar Inc.

The companies signed a joint vendor agreement in late June that commits Caterpillar to promote CleanAIR's emissions-control systems through Caterpillar's worldwide dealer network. Caterpillar is the leading manufacturer of construction and mining equipment, diesel and natural gas turbines. It had $45 billion in sales and revenue in 2007.

"This is a big step for us," said CleanAIR President and CEO, Michael Roach. "This alliance will easily triple our revenue in the next year. We'll need to increase our staff by more than three-fold, from 30 employees now to at least 100 within 18 months."

Roach, a ceramics engineer, created CleanAIR's ceramic-based filters with a proprietary catalytic process that uses platinum to convert particulate matter and gasses into nearly harmless emissions. The devices reduce the output of carbon monoxide, hydrocarbons and particulate matter from diesel-powered machines. They are used to retrofit stationary generators, as well as trucks and off-road vehicles, such as construction and earth-moving equipment.

CleanAIR, which formed in 1993, reported $5 million in revenue in 2006 from sales and installations of the company's patented emissions-control devices.

New confidentiality agreements prohibit CleanAIR from revealing its 2007 revenue figures, or projections for the future, Roach said. But CleanAIR will reap the lion's share of revenue from the Caterpillar agreement.

"Under the alliance, a small revenue fee goes to Caterpillar, and in return we get engineering and marketing support from them," Roach said.

Bill Springer, Caterpillar's Vice President of the marketing and support division, said the alliance will help position Caterpillar as a comprehensive emission solutions provider.

"Caterpillar is a leader in machine and engine technologies, and we are pleased to align with another leader in the emissions retrofit industry," Spring said.

Daniel Serrano, exhaust after-treatment specialist with Peterson Power Systems - Caterpillar's northern California dealer - said CleanAIR's reputation for high-quality emissions-control devices will add value to Caterpillar products.

"Out of a list of 15 to 20 suppliers, Caterpillar narrowed it down to CleanAIR," Serrano said. "That says a lot."

Tighter government restrictions on air emissions are generating a need for these types of products, Serrano added.

Under the alliance, CleanAIR immediately will start selling filters for stationary Caterpillar generators. Next year, it will start selling devices for off-road vehicles. It also will market new filter systems to reduce nitrogen oxides from Caterpillar equipment. CleanAIR recently developed the NOx-reduction devices with technology licensed from Los Alamos National Laboratory.

Caterpillar is sponsoring four educational launch events for the company's 50 dealerships nationwide, Roach said. CleanAIR presented to dealers from the West Coast in June. Events are planned for the East Coast, the Midwest and the Rocky Mountain Region in July and August. And in October, about 200 dealers will visit the CleanAIR factory in Santa Fe to learn first-hand about company products.

Caterpillar also will work with CleanAIR to develop new products, such as a one-size-fits all filter system for off-road equipment, Roach said.

"That's important because there are many varieties, makes and models of off-road equipment in any given construction site," Roach said.

CleanAIR expects to move in August from the 18,000-square-foot facility it rents to a newly built 30,000-square-foot complex in Santa Fe.