Guar gum company plans to build Oklahoma facility
Nov. 18, 2014
by Jeff Gelski
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HOUSTON — Guar gum mostly is grown in India and Pakistan, but potential for domestic production should receive a boost next year. Houston-based United Guar, L.L.C. plans to build a split processing facility in Althus, Okla., and take in guar gum grown by farmers in Oklahoma and Texas.
The facility initially will have one line dedicated to guar gum sold to the oil and gas industry, said Lewis Norman, president of U.S. operations for United Guar. The company in the future might set up another line for food-grade guar gum, which the food industry uses in such applications as ice cream and tortillas.
“There’s been a tremendous acceptance of farmers wanting to grow guar,” he said.
It is “to be determined” whether guar gum prices will support U.S. farmers, Dr. Norman said.
“The ability to make money at buck-fifty guar would be tough,” he said.
As demand increased from the oil and gas industry, prices for guar rose above $10 per lb in 2011, he said, but they have dropped since then.
Guar gum cultivation requires little water, and it adds nitrogen to the soil, Dr. Norman said. It also serves as a rotational crop.
Two other guar gum companies, Southwest Guar and West Texas Guar, were not successful in domestic guar ventures. An ongoing lawsuit in a U.S. bankruptcy court in Lubbock, Texas, involves West Texas Guar, unpaid guar gum growers and New York-based Scopia Windmill Fund, L.P., a West Texas Guar shareholder.
The Nov. 13 issue of the e-mail newsletter “Hydrocolloid News” published by San Diego-based IMR International addressed United Guar’s planned facility in Oklahoma.
“This is not the first attempt to match U.S. guar farmer output with processing capability in the U.S.,” the newsletter said. “The efforts of Southwest Guar and more recently West Texas Guar were not successful. United Guar has experience in guar processing in Pakistan, the second-largest producing country of guar gum after India. This experience will be brought to bear on the U.S. venture, which is funded by some very large sources of capital.”
Dr. Norman said United Guar has a “world class” group of investors. The group includes Tim Draper, a Silicon Valley investor; IDG Capital Partners, a venture capital firm in China; and Augustus Ltd., the family investment office of Baron Lorne Thyssen-Bornemisza.
“We won’t fail because we can’t get the money,” Dr. Norman said.
United Guar offers food-grade certified guar gum from its operations in Pakistan, he said. The company operates two refineries in Faisalabad, Pakistan.