Germ Warfare
How a small U.S. firm is helping fight the spread of avian flu, SARS--and mold--abroad.
By Michelle Andrews

(FORTUNE Small Business) – The World Health Organization recently warned that a global flu pandemic will hit in the next several years and will kill as many as seven million people. In Asia, where the pandemic will probably emerge and where SARS and avian flu are already a cause of great concern, governments and private businesses have stocked up on products made by a small Chicago company that they hope will help them protect their citizens and employees.

That company, Bèrnard Technologies (BTI), makes decontamination products that range from disposable protective clothing such as gloves and booties to zip-lock sterilization bags to special "decon" sticks, which, when cracked open in a room, emit a gas that is lethal to most germs yet harmless to humans. Back when the SARS virus hit Asia in 2003, maids at the Marriott, Nikko, and Shangri-La hotel chains used BTI's protective gloves and decon sticks when cleaning rooms, as well as germ-toxic laundry bags custom-made for them by BTI. Within a few weeks of the outbreak, "we sold out of everything we had in inventory in Asia, a few million dollars' worth of goods," says Sumner Barenberg, BTI's chairman and CEO.

SARS helped BTI show the world that its patented germ-killing technology could be used in medical situations--a new application--and opened up a market niche for it in Asia. But the company had already spent five years building relationships with Asian companies, applying its technology in a very different way. The application, which now accounts for more than 75% of the company's business worldwide, had nothing to do with disease prevention, in fact. What got BTI's foot in the door in Asia was shoes.

The company's killer ingredient is chlorine dioxide, a substance typically used to purify drinking water. Harmless to humans in low concentrations, chlorine dioxide is deadly to almost every type of germ, from E. coli to anthrax. When exposed to light or humidity, BTI's products undergo a chemical reaction that creates chlorine dioxide. The chlorine dioxide creates a microenvironment at the surface that kills bugs not just on the glove or bag or film but in the air around it as well.

When the company was launched in 1994, Barenberg realized that trying to get FDA approval for medical use of its products would cost too much. So BTI focused on food-service products, working with financial backing from McDonald's to develop shrouds to wrap sides of beef in at the slaughterhouse after they've been gutted and washed. To save money, Barenberg decided to manufacture in Asia, then ship products back to the States. He had no plans to sell his products overseas. But the direction of the company changed after Barenberg reconnected in Hong Kong with Martin Berman, a childhood friend.

Berman worked for a trading company that served as the middleman between big shoe brands such as Hush Puppies, Nordstrom, and Timberland, and the Asian manufacturers of the shoes. BTI's technology, Berman realized, could solve a serious problem that was plaguing Asian shoe companies because of the region's damp climate: moldy shoes. In fact, shoes that arrived in the U.S. with mold were sent to Europe to be cleaned, which cost Asian shoe manufacturers $2 a pair. So BTI developed a two- by two-inch blue sticker that would be attached to the inside of shoeboxes to provide time-release protection against mold and mildew. The cost to the shoe factory: 4 cents a sticker. Berman formed a Hong Kong company named Micro-Pak to sell the stickers to Asian shoemakers.

Berman's longstanding relationship with the shoemakers was critical to the company's success in opening up that market, says Barenberg. "The customers in Asia prefer to do business with a local company, and if you're serious, you'll have a regional office as well," he says. "Otherwise they think you're just a U.S. imperialist." With sticker sales of $3.5 million (total sales: $5 million), Barenberg estimates that through Micro-Pak, BTI has captured about 10% of the market from silicone-pack manufacturers. The business is growing 20% a year.

BTI's success with shoes provided a good entrée into Europe, says BTI president Peter Gray, who handles the company's business development there as well as in Japan and South America. In 2003 a large European packaging company hired BTI to develop odor-destroying kitchen trash bags. Getting regulatory approval may delay the introduction of the bags for another two years, according to Barenberg. And now the Chinese government has asked BTI to submit its products for testing to demonstrate their germ-killing powers against SARS and avian flu. If the tests are successful, that may rebound favorably on the company back home, where the FDA and EPA are reviewing BTI data about its products' medical decontamination uses. But BTI officials won't be switching their focus back to the States. "Government agencies are still setting up testing guidelines for a product like ours," says Gray, "and they've already been doing that for two years."