Fusion Coolant Systems Grows, Opens Detroit Tech Center

10/1/12Follow @XconomyDET

The University of Michigan has a good reputation for spinning out technology developed and pioneered at the university into successful startups, and cleantech startup Fusion Coolant Systems is no exception.

The company, which was based in Ann Arbor before opening a tech center on the west side of Detroit, was launched in 2010 to commercialize an advanced coolant used in manufacturing. Xconomy profiled Fusion Coolant in 2010, so we caught up with CEO Tom Gross recently to discuss how the company is progressing.

Typically, Gross says, water is used to cool machinery during the manufacturing process, but that’s problematic because it’s costly; it creates a toxic mix of water, oil, and chemical additives; and it’s very expensive to dispose of the byproduct. What Fusion Coolant has developed is an alternative that uses carbon dioxide, a byproduct of other manufacturing processes, to cool and lubricate machinery.

“CO2 is typically released into the air, but we process it using technology that captures it, compresses it, warms it up, and adds oil to it,” Gross explains. “Then it works like Freon and produces a cooling effect as it goes through expansion. We can cool and lubricate with one spray.”

Gross says it’s a cleaner, greener way to manufacture not only because it removes water from the process, but because it also recycles an industrial byproduct. “It has a huge potential to reduce manufacturing costs,” he adds.

The company is currently in negotiations with one of the largest global machine tool players; that deal should be announced soon, with work beginning in early 2013, Gross says. Food packaging remains a huge part of its business, and Gross says Fusion Coolant just signed a deal with a Colorado company in the food manufacturing sector. “If you saw how a soda can was made, you’d probably never drink out of it,” Gross says with a laugh. “At the end of the line, it has to be cleaned out. Same with medical equipment—you can’t have industrial waste touching parts of the human body.”

Fusion Coolant has seven employees in Ann Arbor and Detroit, and Gross expects to be adding another three to five over the coming months. He notes that things are turning around in the manufacturing sector, especially when it comes to high-tech industrial applications. “Manufacturing tech is exploding right now,” he says. “Many of our customers are going through big expansions.”

But Gross warns that the current manufacturing boom is at risk of stalling out if we can’t get more kids interested in a career in manufacturing. “There’s nobody in the pipeline—we’ve shot ourselves in the foot,” he says, noting how much work was put into industrializing the upper Midwest before companies started moving jobs to Mexico and China—jobs that are now beginning to trickle back. “It has to start with an image change. There are no longer trade shops in schools. We have to get kids interested in manufacturing technology. People here have to appreciate manufacturing like they do in Asia.”

As for the future of Fusion Coolant, Gross says the startup is closing a Series A round valued at between $650,000 and $750,000 to help with continuing growth, and the company hopes to keep building on the momentum of coming in second in the 2011 Accelerate Michigan Innovation Competition. Gross says that he can count on one hand the number of manufacturing tech startups in Michigan, but he hopes the success of companies like Fusion Coolant Systems will support more university funding in that area. “We’re really starting to climb the hill,” he says.

Sarah Schmid is the editor of Xconomy Detroit. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET

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