News Column

Renewable Power in a Box

June 2003, HISPANIC BUSINESS Magazine

Alexandra Salas Rojas

Hector Guevara, CEO, NuEnergy

NuEnergy Group's products may seem complicated to most New York commuters, yet millions of them have benefited from the company's work. Amtrak's high-speed train from New York City to Washington, D.C., for instance, involves NuEnergy's expertise. And when the company's latest invention comes to market, the millions of satisfied customers could result in correspondingly large numbers of dollars.

A publicly traded Hispanic-owned company, NuEnergy makes renewable energy-generation systems. Based in Long Island, New York, the company is one of CEO Hector Guevara's most recent entrepreneurial endeavors. Mr. Guevara also heads up Hytech Industries, a sister company to NuEnergy that makes buildings more energy efficient.

NuEnergy's major product is TEG (Thermal Electric Generator), a device that produces electricity from heat. "I have been developing TEG for 20 years," says Mr. Guevara, "but I didn't submit a patent [application] until 14 months ago."

His mechanical engineering background shows when he explains how his technology works. "The main difference between the TEG system and a photovoltaic [solar energy] system is that TEG works on the conversion of heat, not light," Mr. Guevara says. "It will work on a much higher percentage of efficiency. Sunlight is not required, so you can have a TEG system working underneath a subway car where there is a lot of heat [generated by the machinery]. The [New York] Transit Authority has to dissipate that heat, so we would take that volume of air, which is hot, and convert a significant amount of the heat to electricity and store it in flywheels. This was tested in the fall last year [2002]."

NuEnergy has "really good technology, but if you can't connect that to investor relations, marketing, and public outreach, you'll become just another company with a good idea that didn't execute," says David Ochoa, managing partner of NuAlliance Investment Fund, a major sponsor of Mr. Guevara's dream child. "The exotic part is the science, and it has incredible market application."

The marketing of NuEnergy has two components - the product and the company. Under the symbol NUER, the company currently trades on the Pink Sheets of the Over-the-Counter (OTC) exchange. The company has started the process of preparing Form 10 for submittal to the Securities and Exchange Commission for graduation to the OTC's main exchange, the Bulletin Board Exchange or BBX.
Many of the stocks listed on the OTC's Pink Sheets are small or micro-capitalized companies, because the listing carries fewer reporting and regulatory requirements than an exchange.

"Historically, small firms and start-up firms get listed on the OTC market, and once they mature, they move on to the American Stock Exchange or another exchange," says a brokerage analyst who asked not to be identified. "But in the 1990s, the American Stock Exchange became less of a figure. During the boom years, many firms got on the Nasdaq [National Association of Securities Dealers Automated Quotation system] and stayed there. They may not have met the criteria [for other exchanges], or in the case of Microsoft, to cite one example, they were comfortable on the Nasdaq. Now many large companies are comfortable with Nasdaq."

Mr. Guevara plans to repeat the success of Sega, Microsoft, and Home Depot, which started in the OTC market and grew into mature corporations. "We have IR [investor relations] companies that are actively promoting us," Mr. Guevara says. "We are utilizing 20 years in the marketplace as a springboard," he adds, referring to his management of Hytech.

To land business for his start-up, the CEO plans to piggyback on the success of his established company. Hytech has established sales representatives throughout the United States, Canada, and Chile, where the company supplies numerous products and supplies to the mining industry. In this country, the company has a network of independent reps who provide sales and technical support services. Thanks to the Internet, engineers and customers can access technical explanations of the products at www.nuenergygroup.com.

Mr. Guevara plans to leverage these resources to secure future business for NuEnergy. "Based on a crossover, we aim to have NuEnergy products added to our independent representatives' list of products and services," he says.

In addition to the established marketing structure, NuEnergy will take advantage of Hytech's customer roster. Hytech's high-profile projects, mostly in the transport sector, include one for Westinghouse as well as a New York-New Jersey Port Authority contract to co-design and supply heater cables that prevent ice build-up on monorail cars at Newark International Airport.

The company has performed work for Boeing and Bombardier Transportation,
one of the world's largest manufacturers of airplanes, railcars, and trains. One contract with Alstom Transport and Bombardier involved Amtrak's Acela High Speed Trains. Hytech also produced electrical and lighting systems for New Jersey Transit's new Comet IV cars and the Long Island Railroad.

The synergistic strategy already has paid off for Hytech and NuEnergy. Hytech was recently awarded a $1.7 million contract to design and build the main control system for the seven generators at a hydroelectric plant in Virginia. NuEnergy will provide manufacturing support services on the contract.

Mr. Guevara estimates that the consolidated revenue of his two companies will total $10 million for 2003. With a current OTC price in the $1.50 range, and 40 million shares outstanding, it has a market capitalization of $60 million.

"I think eventually we are going to succeed at the Nasdaq level, but there is significant investor interest and market interest right now," says Mr. Ochoa. "The R&D stage is almost at an end, so we have information to send out [into the market] and a story to tell." And Mr. Guevara is eager to tell it.



Source: HISPANIC BUSINESS Magazine


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