Welcome to the wonderful world of hand towels in public bathrooms. In Israel they're not all that common - we prefer to waste our money and rain forests that we don't have on paper towels, but in Europe, the public bathroom hygiene market is based on washable cloth towels.
"Of all the products regularly supplied to offices, tissue or towel lines are the most profitable," says Avi Kafzan, founder and CEO of consumer technology start-up UltraClean Ltd. "In Europe, these companies make billions, with 70% of the business coming from towels. The trucks that deliver to offices are 60% loaded with towels alongside a bit of coffee, soap, and toilet paper. After they've been used, they transport them to enormous, purpose-built laundries. A laundry like this costs $30 million to build. The towels are tumble-washed in giant tanks and then squeezed dry by a press. The manpower costs are tremendous and employees have to work in conditions of heat and humidity."
A visit to one such laundry in France made Kafzan wonder why each towel couldn't be washed at the office itself, or even inside the device dispensing it. You may have already come across devices, usually overseas, where the towel is dispensed from within the device but then rolled back into it. If you thought the towel is washed inside, you're wrong. The devices merely roll up the towels which are then removed and taken to one of the laundries described above.
UltraClean's product, on the other hand, is a washing machine installed inside the towel dispenser. "It's a miniature washing machine, one of the smallest in the world," boasts Kafzan. "Designing it required advanced water, soap, and temperature technologies." Like most innovative devices, it also had a breakthrough patent.
"The creative angle was the realization that the process had to be broken down into two stages, soaking and drying," says Kafzan. "During the day, after a length of toweling is used it is immediately gathered into the pool where it is soaked in soap so the dirt doesn't get in. It is important that the towel stays in the pool for some time. The soaked towel is then wound on to a take-up roller at the upper end of the device. We then set a time at the end of the day for the process to work in reverse - the towel begins to roll out back down through the soap and then goes through a process of brushing, rinsing, ironing and drying, at the end of which it is ready to be used again." If the office is also open at night, two devices can be used.
The idea of a small washing machine inside a towel dispenser was first tried unsuccessfully 30 years ago. "Everyone tried to make it a cyclical process, a circular one where the towel goes through the washing machine and comes out the other end clean and ready for reuse," says Kafzan. "This was also what caused the delays, because the process took longer and you had to wait for the towel. Creating the circular method meant the devices had to have a large capacity."
Globes: What's wrong with the hot air dryers in public bathrooms in Israel, aside from the fact that most users don't like them?
Kafzan:"That is the worst possible solution! This device sucks in all the bacteria-filled air from the whole bathroom and expels it right onto your hands. You end up with far more bacteria on your hands that you did beforehand."
The fresh cup that went moldy
Kafzan has experience in office hygiene. He was the founder and CEO of Fresh Cup, which developed a miniature office dishwasher for cups only. He came up with the idea when he was R&D manager at Keter Plastic Ltd. "I saw how at the kibbutzim, everyone placed their dishes in a large rotating dishwasher, and they always came out clean at the other end. We decided to adapt this idea for the office and created the world's smallest dishwasher."
Fresh Cup was sold to Eden Springs (Maayanot Eden) (TASE: MEYD) in 1999. Although he made an exit, today Kafzan is not entirely happy with the move he made. "The process of raising venture capital, and then selling and losing control didn't work out all that well," he says. "Eden Springs is a water company and our product took a back seat. As long as they operated it as an individual profit center, it worked, but when Fresh Cup was integrated into the company, its model collapsed. It should have had its own sales personnel, installers and maintenance team," Kafzan believes. "I saw it wasn't working so I left. Once I was gone, the organization lost its flair. An organization that has no soul doesn't stand a chance. You can still see the product in offices, but they didn't develop a second generation and the focus overseas faded away. The company was left behind. They've finally realized this at Eden and are trying to change."
The same principle of miniaturization that was employed in Fresh Cup lies at the heart of UltraClean - the miniaturized washing machine. Kafzan did not want to lose control when he raised finance for the new company. The first investor was vehicle group Mayer Cars and Trucks Ltd. "They also wanted to take over but I was careful this time and I bought back their shares," he says. The company was eventually founded under the auspices of the Mofet B'Yehuda Innovation Accelerator, which specializes in cleantech products. The company raised a further $1.5 million from Kafzan himself and a number of private investors.
UltraClean's business model comprises profit from machine installations, service, replacing towels once a year, and the sale of detergent packs, which will be replaced by the office's cleaning staff once every few months.
The toweling companies probably don't like you. You're threatening their main source of profit.
"You would have expected them to try and wreck things for us, but not all of them have. We recently participated in a leading trade show for the cleaning industry, Interclean, and we were voted the most innovative product. We get offers every day from distributors interested in marketing us overseas. The products will be marketed in Israel by Manal."
Published by Globes [online], Israel business news - www.globes-online.com - on September 3, 2008
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