Montana State University

Phillips capitalizes on research, creates jobs

June 23, 2006 -- By Carol Flaherty

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It's a long road to building a stable business, but after seven years, a few chance encounters and some very special fungus, Phillips Environmental Products of Belgrade has found itself selling millions of its products to buyers around the world.

Founded by the husband and wife team of Bill and Pam Phillips in 1999, Phillips Environmental Products builds environmentally friendly portable toilets that use a mix of fungi and other ingredients to first gel human waste and later help it biodegrade.

The Portable Environmental Toilets or PETTs (TM), as the company calls them, are so popular the company sold 5 million in 2005. Customers include the United Nations; FEMA, which bought millions for Katrina relief; the U.S. military, which is using them in Iraq, as well as land management agencies, backpackers, truckers and others.

Not only is Phillips Environmental Products making answering nature's call a more environmentally sensitive pastime, but it's also brought jobs to Gallatin, Choteau and Silver Bow counties. Most of its administration, warehouse-related and research lab jobs are in Belgrade. Phillips contracts with Laverlam International's facility in Butte to produce tons of fungi, and, when major contracts are bagged, Phillips' employee numbers approach 100 in Gallatin and Choteau Counties.

Though Bill Phillips had long had the idea for an eco-friendly toilet, the design came together after a chance meeting in the Bozeman mall in 2000.

That's where he bumped into Montana State University's Gary Strobel, a plant pathologist known for discovering useful plant microbes in exotic places. Phillips and Strobel had first met through their church about 30 years ago when Phillips moved to Bozeman. Phillips later moved away, and after years without communicating, the pair saw each other at the Bozeman mall. Phillips said he was working to manufacture a new type of porta potty and hoped for a clean system that would later biodegrade in landfills. Using various grants, including some from the Montana Board of Research and Commercialization Technology, Strobel helped develop suitable microbial contents, while also working to patent two fungi that he had found in the rain forests of Central and South America.

The design now includes a privacy tent, a seat and a biodegradable waste bag that contains microbes. The bag, which the company tagged a WAG BAG (R), can be used alone, which makes it easy to carry in a backpack. REI's Web site calls the WAG BAG a "human waste bag kit (that) helps keep the wilderness clean for all to enjoy." It is approved for use in national parks and for disposal in land fills throughout the United States. When covered at a land fill, it biodegrades in about six months.

While the WAG BAG system was becoming popular with one version of what the company calls Pooh Powder (TM), the newest mix with the patented fungi takes the system one step further and is nearly odor free, Strobel says. He has given his patent rights to this fungi to MSU, and Phillips Environmental Products is licensing it from MSU. Phillips Environmental retains Strobel as scientific adviser and he serves on its board.

While working out the manufacturing of the PETT system was a challenge, so was assembly of the system's parts.

Bill Phillips says that others have recommended that he fully mechanize assembly of the PETT and WAG BAG kits, but he doesn't want to. "We try to be community-minded and people-oriented," he says. "We do everything we can to keep as many home assemblers as possible. It is dear to the heart of my employees and Pam and myself."

Some of those assemblers are in Choteau County, thanks to another chance meeting, this one between Bill Phillips and Jim O'Hara, Choteau County commissioner, at a trade show in 2003.

O'Hara says he "kept in touch with Bill and said, 'If you ever want to have a satellite business, we'd love to have it.'" When the opportunity arose, O'Hara says his community formed a nonprofit organization called Choteau County Home Assemblers, which takes care of transportation of the components and completed kits to and from Fort Benton.

"Realistically, people make $8-9 per hour, maybe up to $10 for our fastest people," O'Hara says. "If you're not fast enough to make $5 or $6 per hour, you quit. We had about 20 percent attrition at first, but now have a pretty committed work force."

He says the workers network to pick up components, and have also met to give each other advice on how to work more efficiently. The components for two-weeks worth of work can be carried in almost any car.

When Phillips was filling its FEMA and DOD contracts last fall, O'Hara says up to 48 Choteau assemblers were shipping 75,000 products per week. While a core group of workers is near Fort Benton, O'Hara estimated that employees also include six-to-seven people in Big Sandy and similar numbers in Geraldine and Highwood.

Phillips Environmental's business grew to 5 million WAG BAG sales in 2005, and it is gaining an international market share as well. In the scrapbook kept in Belgrade, there are letters from PETT system buyers such as the United Nations. The company has just added a related product, a system with different MSU-patented microbes that are natural antibacterial agents. The new system will be aimed at nursing homes and hospitals, where health care providers want to limit the potential spread of disease.

"To get to this point, I've had help from so many sources," Bill Phillips says. "Probably every help group in Montana has helped us."

In addition to the state commercialization grant for research, another notable boost came from the City of Belgrade, which provided a low-interest $200,000 loan. The company has used the help not just of Strobel at MSU, but also the Montana Manufacturing Extension Center and NASA Tech Link, both located there, as well as the University of Wisconsin Graduate Business School. Phillips said Tech Link provided evaluations and product review, as did the U.S. Bureau of Land Management and product retailers.

Contact: Gary Strobel, (406) 994-5148 uplgs@montana.edu, Bill Phillips (406) 388-5999, James O'Hara (406) 622-3017