Uruguay’s leading producer of chlorine, caustic soda and byproducts through the electrolysis of sodium chloride (salt), Efice makes a significant contribution to not only the country’s industrial sector, but also its health and various other not-so-obvious areas. President of the proudly Uruguayan family-run business Néstor Gómez Alcorta reveals the innovative developments taking shape from its extensive research and development efforts, which include tripling production with reduced energy costs, increasing agricultural productivity by 10%, and converting waste products into raw material for photovoltaic panels.
Uruguay had a decade of growth where FDI levels were up to 5.6%. How could it reach those levels again?
In addition to maintaining the institutional security and legal certainty that it has always offered, it is important for Uruguay to offer a competitive energy supply. And it also has to keep doing things as it has been doing well, for example the Ministry of Industry supporting industrial development.
Since the arrival of Carolina Cosse (as the Minister of Industry, Energy and Mining) things have been improved; there’s a new spirit. She has introduced many young people into the National Directorate of Industries and put them to work directly with companies. With them we generate interaction and exchange ideas about what can be done reasonably to help the development of the sector.
How would you define the contribution of industry to the Uruguayan market? Everyone talks about agriculture, but industry is bringing innovation and increases in quality for other sectors.
In fact industry in Uruguay represents a higher percentage of GDP than agriculture itself. In exports, agriculture is the leader and that is understandable, provided we do not take into account the pulp mills that export more than $2.5 billion a year in pulp. If we do consider them, then industry is very even with agriculture.
Industries in Uruguay were not instrumented with a focus on the global markets. I was vice-president of the Chamber of Industries, from 1992 to 1996, and I can say I met a lot of industrialists to prove it. Uruguayan industry has always been intended for the domestic market, which is obviously very small. With 3 million inhabitants, we cannot have a reasonable consumption to have a large industrial sector. You have to look at the global market.
In Efice, by force of circumstances, we had to always export. We were pioneers in exporting. And in the 70s we were exporting chlorine, when exporting in Uruguay was a novelty.
I think if between the government, mainly the Ministry of Industry, and chambers of industries, an interaction aimed at focusing Uruguay is generated abroad, we could have good results. Because what we do have in Uruguay, and that I also say properly, is high-skilled work.
Efice is a family business with a long tradition. What were the origins of the company?
Efice’s has more than 100 years of history. I'm the fourth generation. It began in 1895, when my great-grandfather was licensed as a chemist at the Faculty of Medicine and contributed to establishing the Institute of Chemistry and then the Faculty of Chemistry.
In 1911 he obtained a scholarship to go to the Sorbonne in Paris and later another to go to Berlin. At that time they were the scientific centers of the world; they had discovered the atom and were developing experiments with them.
His work concerned the electrolysis of salt, which is what produces chlorine and caustic soda. He continued his work of teaching and in parallel began to design, first on paper and then with very few resources in the garage of his home, an electrolytic cell for the electrolysis of salt. In 1925 he finished constructing a pilot model of an electrolytic cell and managed to produce chlorine, caustic soda and sodium hypochlorite, in the form of a universal disinfectant.
Together with my grandfather, they installed the first chlorine production plant in South America and began to introduce sodium hypochlorite into the country’s water system. As a result Uruguay was the first country in South America to eradicate typhus and cholera.
In the early 50s my father decided to install a chlorine soda and sodium hypochlorite plant, but no longer with our cells, and started importing technology from Europe. At that time, Efice as the company’s name was forged. In the late 60s my father designed a new electrolytic cell of his own, which was much more efficient and replaced the cells imported from Europe.
In 77 my father died in a car accident and I, aged 28, was named head of the company until today. We have managed to grow a lot since 1977. We have grown 30 times in total production volumes of chlorine and various derivatives. Efice is now in a time of substantial growth and change with the Omega Project.
The Omega Project will result in the growth of your production structure and building your own wind farm. It is an investment of $300 million and was declared of national interest by the President. At what stage is it now and how will it impact on the productive capacity of the company?
The chlorine industry is at a really important moment and therefore so is Efice. The technology we use to produce chlorine, the same that is still used in many parts of Europe, is a technology that uses mercury as a catalyst.
But as defined at the international level, by 2025, it will be forbidden to keep using these mercury-based plants. The change is very expensive and current profitability is not enough to pay for it. The only way to make it viable is to grow in volume.
The Omega Project is a completely new plant that will allow us to triple production. For this, we have a totally clean technology, known as Generation 6, which is the latest generation for the production of chlorine. In addition to being 100% clean this new plant is much more efficient in energy consumption.
In the production of chlorine and soda, 50% of the cost is electricity production, when in a normal industry, electric power consumption is 3%-4% of the cost.
We are the largest energy consumer in Uruguay on a private level and now we will triple production and therefore should almost triple consumption. But this new technology that we will install requires 20% less energy consumption per ton of final product, which will reduce our costs.
We decided to add a 60MW wind farm to our project, which is necessary to supply the total energy that the new plant will consume.
This park also has a great added value for us because once we have written off the investment, the cost of power generation will be very low. The first 10 years, almost all energy billing will go to repaying the investment in the wind farm, but after year 11 we will see a reduction in the energy cost of 80%. That will give us a very great strength in the business chlorine. There is no known plant that generates energy for this volume of production of chlorine as we will have.
As for the incremental caustic soda we will produce, this is all going to go to the UPM and Montes del Plata pulp mills. They are anxious for it because it will give them more security of supply receiving raw materials from a local company and thus not depend so much on imports as before.
What are the main challenges ahead and how Efice is working on the technical innovation of its products?
We have achieved through our innovation department a series of products derived from chlorine.
Everyone thinks that chlorine is sodium hypochlorite, which is to disinfect homes. But chlorine is a gas. Chlorine gas is separated from the molecule of sodium chloride, and sodium becomes caustic soda.
The two products are results of electrolysis, and inevitably the same amount of both occurs. I cannot only produce only soda or chlorine. The difficulty of this business is that caustic soda is always oversubscribed and there’s too much chlorine in its natural state, because the market is very little.
In the case of Uruguay, we use chlorine for water purification and disinfection, and it is 50% of what we produce. The other 50% we use in creating new products. We have developed Roadtec, a liquid product that is inert and safe for the elimination of dust rising from dirt roads when vehicles pass over them.
Another interesting product is Growtec, a supplement for cultivation. It is already in the fourth year of field tests and the data we have so far shows it can give an increase in agricultural productivity by 10%.
There is also another product we have in the middle stage of development and is the most revolutionary of all – we will make solar-grade silicon from the residue of rice husk. When rice is peeled from its shell and is used for combustion, when combustion occurs it is ash. It is revolutionary because until now waste rice husk ash had no use and is highly polluting. So last year we did all the development stage in the laboratory and this year we are already building a pilot plant with technology that we have developed in Efice to convert this waste into raw material for photovoltaic panels.
What aspirations does Efice have, as a Uruguayan company, to work with overseas markets?
Efice products are home made, they are real innovation, real technical and technological Uruguayan development, so I think we can get to work with any market in the world.
We, as users, take things like having clean water for granted, but nobody asks who cleans Uruguay’s water. How would you describe the contribution Efice has made to the health and welfare of this country?
In Uruguay there are some strategic industries, such as Ancap, Conaprole, Montes del Plata, agro-livestock industries, refrigeration, chemical and energy companies, which depend on products supplied by Efice. Besides, the innovative products that we are developing for agriculture, for the environment and for energy will create value for the future of the region.
Much of national sovereignty depends on Efice, and health too. We understand that we provide a very important value to society and very few know us. Therefore we want to change and offer a new image of the company so that everyone understands what we do.
Thinking about the more than 100 years of your company, what values of your great-grandfather have been transmitted and still today are represented in the company?
Of each of the family members who have contributed to Efice has learned something that characterizes the company. My great-grandfather was concerned about research: this is something we are maintaing. After, my grandfather, who was not a chemist but left an important legacy as an entrepreneur, conveyed that ambition of going outside to fight for opportunities. And my father left the cult of having a good relationship with all staff and also more research because it was the promoter of the design of the new electrolytic cells in the 70s. I think I keep all of that.