By KEVIN WALKER
Michigan Correspondent

EAST LANSING, Mich. — Michigan State University’s (MSU) Product Center for Agriculture and Natural Resources has created a new position to help entrepreneurs succeed in the world of nontraditional agribusiness.

Ruben Derderian, a former executive at several medical device companies and recently a consultant, has been named the associate director of the center. Derderian sees himself in this new position partly as a liaison between the university and entrepreneurs, and also as a mentor.

“One of my roles is to act as a conduit for people into the university,” he said. “I’ve spent 35 years running companies.”
MSU’s product center has been around since 2003 and has helped about 600 businesses either get off the ground or move forward toward more profitability. One such business was a sawmill that, although it had been in business a long time, suddenly found less to do.

The product center helped the company transition to production of wood pellets for use in woodstoves.

Now, Derderian said, the company has more business than it can handle.

He described the sawmill as a traditional agribusiness and that’s what the product center has focused on, until now. “There’s really a revolution going on within agriculture towards development of nontraditional agricultural businesses,” he said.

Derderian is really focused on the bioeconomy. He gave as an example KTM Industries, which manufactures and sells packing and insulation derived from cornstarch. The method was developed by a researcher at the university. Derderian said cornstarch is used with a polymer, which makes for a more environmentally friendly material; yet, it looks much the same as conventional packaging peanuts.

According to Derderian many times a venture is simply lacking a business plan, often with the entrepreneur plodding along without a clear sense of how to proceed. He described a company he advised some time ago that could have been more profitable if it had just done a couple of things differently. The main problem was that it bought some equipment it could have leased much more cheaply; he said this specific lesson could be applied to ethanol plants.
“A lot of times it’s not knowing what to do, it’s knowing what not to do,” Derderian said.

As another example of a nontraditional agribusiness trying to get off the ground, Derderian described a company that’s trying to get canola oil out of the seeds to use as biodiesel. He would like to help the business transition out of the laboratory and into the “real” world of the marketplace, but he said it will need an infusion of cash. He’s hoping the venture might be able to get a grant from the $800 million in federal funds that have been set aside for biomass programs.

“Now it’s a whole new ballgame” for this research venture, Derderian explained. “I’m prepared to look over their shoulder until they have a solid business.”

Another research venture that could turn into a thriving nontraditional agribusiness involves a sensor technology that can detect E. coli, salmonella and other pathogens much faster than the traditional method of sampling and testing.

“Sensor technology can do the same thing (as traditional testing) in an hour,” he said. “Right now this is being done in a lab.”
Thus, if a farmer had a problem with a pathogen in his irrigation water, for example, with this technology it’s more likely he could fix the problem before harvesting his crop. This particular technology was developed by a microbiologist at MSU. If it does develop into a successful business, MSU would sell the technology or license it, Derderian said.

Is he concerned about budget problems at the state level affecting the product center and perhaps his position? Not too much. “I have not heard anything with respect to cuts in that direction,” he said. “I think there’s quite a bit of stimulus money that will come into the state.”