An encounter with a chemist led Brazilian business administrator José Luis Majolo to change career paths a second time, building a sustainable and innovative company in the process.
In 2003, after working for 35 yearsin corporate finance, Majolo opened a boutique hotel in the Atlantic rainforest near Sao Paulo. One day a chemist appeared at the B&B, selling a new cleaning formula developed by researchers at the Federal University of Ceará, in Northern Brazil. It was free of chlorine, phosphate and other toxic compounds usually found in cleaning products. Majolo purchased it for the well-being of his guests. But then he had the idea to create a new business: TerpenOil, a green chemicals company making high-performance cleaning products based on natural ingredients from renewable sources.
Conventional household cleaning products can be harmful to our health and the environment. Recent studies conducted by the University of Bergen in Norway and published by the American Thoracic Society show that inhaling the chemical compounds in cleaning products can be as noxious as smoking 20 cigarettes a day. The United States Environmental Protection Agency (EPA) associates chemical cleaning products with environmental issues, since their volatile organic compounds (VOCs) make disposal difficult. These compounds tend to end up in the water stream, affect indoor air quality, contribute to smog formation in outdoor air, and damage the ozone layer, reducing its ultraviolet radiation-absorbing capacity. An EPA study suggested that indoor air can be up to five times more polluted than outdoor air, due mainly to combustion sources and cleaning supplies.
In 2007, Majolo bought the patent for the cleaning formula from the Federal University of Ceará, then adapted it to be effective for large-scale industrial cleaning. “The challenge stirred my old desire to bring something positive into the world that would also make money,” Majolo says, noting that the product had to combine price, scale and quality to be successful.
“The key is to replicate the way nature works every day, using new technology to restore what we have lost over the millennia without going back to the Stone Age,” Majolo explains. Effective in fighting dirt, mould and mildew, the cleaning substance’s novelty comes from its natural origins. The formula is based on terpene oils – organic compounds found in citrus and other plants, with solvent, antiseptic, bactericidal and fungicidal properties. (Research has shown that terpenes can react with ozone to create formaldehyde, but the company claims its concentrations are too low to be hazardous.)
Based in the city of Jundiaí, 60 km from Sao Paulo, TerpenOil obtains most of its raw materials from oranges processed in juice factories, but they also use pine, eucalyptus and citronella. The company supplies mainly corporate clients with high sustainability demands and employee health indexes. It produces roughly 60,000 litres of cleaners each month, all of which are biodegradable and made from renewable resources.
Tests carried out with TerpenOil samples at the Instituto Adolfo Lutz in São Paulo showed its ability to reduce inhalable moulds by 90 percent and inhalable bacteria by 80 percent in closed spaces. The company is the only cleaning company in Brazil certified by the Brazilian Association of Technical Standards (ABTN), meaning it can be a supplier for “green” buildings.
The Brazilian personal hygiene and cleaning products market generated 21.5 billion reais (USD 5.8 billion) in sales in 2016, after growing 44.3 percent in five years. “We saw an opportunity in high demand for healthy and natural lifestyle products from renewable sources,” says Marcelo Ebert, director of TerpenOil.
While the company's business model was originally based on sales to corporate clients, TerpenOil launched a new brand for the retail market in 2018. Named YVY, the brand has its own business model, selling concentrated cleaning liquids and refill capsules to households via e-commerce, and by monthly subscription. Selling the concentrated cleaning formula eliminates the need to package the solution in plastic bottles that contain mostly water, reducing transportation needs.
The company has invested USD 10 million in both activities combined, with sales growth of between 20 and 40 percent per year. Retail sales, though brand new, have been steadily growing by around 20 percent a month. TerpenOil’s competitors are other manufacturers of terpene-based cleaning products, but only in the corporate market.
TerpenOil has also developed gas emissions treatment products, which neutralize VOCs and odours in industrial buildings air conducts, and treat the air. These products still represent a small part of the company’s portfolio and are aimed only at corporate clients. “As the market becomes more conscious, we plan to expand our portfolio of products,” says Ebert.