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TERTM strikes new license deal

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The stationary vane plate, which is used in an industrial compressor to replace a cast aluminum part, is one example of how TERTM Technology Corp. applies its technology for an industrial application. The plate is a foam core plastic composite construction. Photo Courtesy of TERTM Technology Corp. WINONA, Minn. -- A new licensing agreement is taking technology developed here by TERTM Technology Corp. to Italy.

TERTM, which closed its production and research and development doors last March, is selling patented licensing rights to BAT International, a manufacturer of composite plastic materials in Rome.

TERTM founders invented a molding process to make high strength, low weight advanced composite plastics. A patent for the process was issued in October 1991. The acronym TERTM stands for thermal expansion resin transfer molding.

The Italian firm will use TERTM's technology at its TAEMA division located about 90 miles from Rome and has rights to sell the products worldwide, said Donald Hewitt, chairman of TERTM's board of directors.

``They will make parts for a variety of industries,'' he said.

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Hewitt said TAEMA is primarily a subcontractor that will manufacture parts for buses.

Hewitt said TERTM will get an initial licensing fee of $260,000 to $320,000, depending on licensing options.

In addition, TERTM will receive a 3 percent royalty from products that BAT International sells. The minimum royalty will be $50,000 a year and the maximum royalty will be $500,000 a year.

``Our goal is to look toward selling some additional licenses and hopefully from that we will have enough money to open our research and production facilities and continue to grow,'' he said.

Hewitt said TERTM ``simply ran out of money'' when it shut down operations of the six-year-old company in 1991.

For 1992, Hewitt said, TERTM is putting together some mail contacts and also plans to be represented at trade shows in an attempt to find other licensing candidates.

``We're showing the process is an effective way to make products better,'' he said.

The technology may also reduce labor costs.

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Hewitt said the process often reduces the amount of labor involved to produce something.

The closed mold process utilizes thermally expanding plastic foams to create the high strength, low weight parts.

Unmolded parts could involve the gluing together of two or more pieces that later would be trimmed and finished. The closed mold process, however, allows for parts to come out as one piece with a need for little finishing.

Hewitt said TERTM produced a missle fin for a pre-production phase for Honeywell, which later lost the contract bid. But, Hewitt said the company found that it used one-third of the amount of labor to produce the fin using TERTM technology.

TERTM continues to seek applicable product areas to expand the technology and TERTM's financial base, Hewitt said.

In addition, he said TERTM is continuing to look for investment capital or a corporate partner. Selling the company is also a possibility.

Hewitt said the key guy behind TERTM is Max Ware. Ware worked with Mike Cichanowski, owner of Wenonah Canoe Inc. in Winona, on the molding process. They formed TERTM in 1985.

Hewitt, who owns Spectrum Industries Inc. in Roseville, is a business development consultant. He joined the company's board in 1988.

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Ware, Hewitt said, had the idea to build canoe paddles for Wenonah Canoe using the process.

The canoe paddles were used as a vehicle in the developing process, Hewitt said, but production of the canoe paddles was discontinued last year.

Ware, who left TERTM two years ago, has been hired as a consultant by TERTM to instruct and assist the people at TAEMA in learning the technology during a six-month period.

Ware said a roof panel is now under development by TAEMA for a commercial bus.

Hewitt said that ``as part of the agreement, we'll demonstrate the technology to them by building a prototype mold and make some prototype parts that they would select. In the process of doing that, they will get first-hand involvement of how to work with the process.''

TERTM, Hewitt said, will also transfer certain technical and process documents to the Italian firm.

The licensing agreement with BAT is not the first for TERTM. In 1988, TERTM sold a license to a Japanese firm, Teijin Ltd., which is a fiber and resin producer.

``We've always had as a corporate goal to license the technology in the international marketplace to companies active in a large area,'' Hewitt said.

Ware also spent about two years in Japan working with Teijin officials, Hewitt said.

Hewitt said Teijin is producing a fin for a sailboard and a bicycle rim, which will be sold to the bicycle racing market.

Teijin, he said, is continuing to expand the number of products using TERTM technology.

``We're entitled to get information as the Japanese are growing with the process,'' Hewitt said.

The same will be true of TAEMA developments.

TERTM, which is a public company but no longer trades, is now run by the board of directors, which includes Hewitt, Cichanowski, Dave Keller, president of Lake Center Industries of Winona, and Jim Cady of Minnesota Aqua Farms.p

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