Business Monday

Q & A with David Schwedel, founder of Coalview Ltd.

By Ina Paiva Cordle

David A. Schwedel is the General Partner and Founder of Corallum.
David A. Schwedel is the General Partner and Founder of Corallum. Miami Herald Staff

A native of South Florida, David Schwedel lunged into the business world as an entrepreneur when he was in his early teens and never had time to finish his formal college education. Yet he has earned his knowledge of finance and energy technology throughout a career that has spanned various business ventures.

Most recently, Schwedel founded Coalview Ltd., a fine coal recovery and coal technology company that provides technology and environmental solutions for mining property owners on a global basis. Its administrative offices are in Coral Gables.

An entrepreneur at heart, all of his businesses have one thing in common: the advancement of technology.

“I am a technology developer at the end of the day,” he said. “But my focus is on energy.”

We spoke to Schwedel on the phone to learn more about his background and businesses, then emailed him these questions.

Q. You’re a third-generation native of Miami Beach. Please tell me about your background growing up here and your first foray into business.

A. Growing up near the ocean, I developed an immediate love for boating. Early on, our family did not have our own boat, but I quickly learned at the age of 10 that the neighbors were always happy to take out a kid who enjoyed washing the boat down after a day on the water! Within a couple of years, to make money, I started knocking on doors, asking people if I could wash their boat. My mother printed my first set of business cards for me when I was 12, and within five years thereafter, I had about 100 monthly boat accounts, and later successfully sold the business, called Florida Marine Services.

Q. What did you do after you sold Florida Marine Services?

A. A friend of mine introduced me to the owner of a local venture capital firm, the OLMC Group, right around the time I was entering college. He was an avid boater, which gave us common ground. I took an internship they offered me, and they later made a formal offer for me to come work full-time while continuing my education in Miami. I worked there for nearly five years, six days per week, 12-16 hours per day, and never had the time to complete my university degree. Initially, the work consisted of proofing documents, but by the fifth year, I was a senior vice president and member of the Investment Committee. It was a wonderful education. Nearly 70 percent of our investments were in mining and energy technology related enterprises.

Q. When you left OLMC Group, what did you do next and how did you come up with your business idea?

A. When I left OLMC, many of my friends were boat builders — owners of companies like Bertram Yacht, Intrepid Powerboats, Cigarette, and others with whom I was consulting on business or marketing matters. Regardless of their size, they all had similar problems with inventory: too much of it, not enough, or price differences between one factory to the next for the same part. I called friends in the industry to see if an “EDI – light” system [electronic data interchange — an inventory control system] was available for boat builders like it was for the auto industry. They all said the same thing, “No, but if you find it, let us know we will use it.”

I knew I had to build it. After all, it is a $40 billion per-year industry in the US. It was called Marex.

Q. Please tell me more about the growth of Marex. When and why did you leave the company?

A. We started in 1995 with two employees and a $2 million investment. Some of the greatest people I have ever worked with in my 25-year career worked at Marex, and many of us are still close friends today. I was able to sign up the largest boat builder in the world at that time, Genmar, and with help from industry veterans like Craig Barrie and Scott Smith, we closed contracts with some of the world’s leading marine builders and suppliers. Bear Stearns helped us to raise capital in a public offering: start to finish around $52 million.

We grew Marex from a $2 million investment into a $550 million enterprise valued on Nasdaq. In 1999 I asked the board to allow us to acquire five companies, in exchange for stock in our company (not cash). These companies, consolidated, would have added considerable net income to the bottom line of the company. The majority of the board felt that it would take away from our high-tech valuation. I vehemently opposed this, and they promoted another person to CEO, and changed my title to chief strategy officer. I later left the company, and within a year, when the dot com bubble burst, they asked me to come back in and see if I could salvage the business. I structured a deal that worked for shareholders, but could not get one of the large institutional shareholders to agree to it. It was a tough ending to an amazing company.

Q. What was your next venture? Please tell me about that.

A. In 2005 I was approached to be the lead investor in Synthesis Energy Systems (“SES”) which had two employees and a business plan to convert waste coal into syngas and then hydrogen, to then make “clean electricity”. It was an amazing concept, delivered from very reputable people with deep domain expertise in energy. The only issue was, hydrogen engines were not reliable at that time. I predicated my involvement on the basis that we work on developing a plan that creates glycol or methanol from syngas.

Today, SES is emerging as the world leader in low rank coal gasification. The company completed a $100 million public offering in 2008, before the world financial markets collapsed. It now has two plants up and running in China, and I believe that in the next five years it will be an extremely valuable company with more than 1,500 employees.

Q. How did you get started in Coalview, whose main headquarters is in Coral Gables and which is your main venture today?

A. I acquired the coal technology assets of Beard Technologies, owned by the Beard Company in April 2011. I then changed the business model, expanded the management team, and invested in technology. In just three years, the company is now America’s only fully integrated coal technology company for fine coal recovery with our own in-house laboratory, and sample extraction technique.

Q. You recently arranged financing for a fine coal recovery plant. Please tell me about that. And where are Coalview’s operations and how many employees do you have? Can you disclose your revenues?

A. The plant is now being constructed in Centralia, Wash., at the Centralia Mine Complex, owned by TransAlta. The project represents a $42 million investment financed with $26.5 million of bonds, which were underwritten by Oppenheimer & Co., $10 million of equipment contributions from TransAlta, and $5.2 million of equity capital from our group. Coalview’s operations are now in Somerset, PA, Centralia, WA, and our administrative office is in Coral Gables. This is a type of project that has a defined life of 10 to 12 years, so over the life of the project, total revenue will be approximately $220 million. This year we will employ approximately 50 people.

Q. You obviously have a strong entrepreneurial spirit. What is your entrepreneurial philosophy?

A. I’ve been called a “serial entrepreneur.” When I hear that, it grates on me. It sounds unstable – like a person that jumps from deal to deal. When I involve myself in a company, I’m in it for seven-12 years or more. Through the good and bad. I have some friends that change jobs every five to eight years. I believe that the only security you have in this world is the security you make for yourself. If you’ve lived in Miami long enough, you will remember Eastern Airlines. Frank Borman changed my mindset on corporations looking after you.

If you are in college or reading a book on how to be an entrepreneur I recommend three things: 1) get a business mentor; 2) write your business plan; and 3) get to work.

Q. What will be your next step?

A. I have a fundamental belief that the big three fuels: coal, oil, and gas, will be used to generate energy for the world for the next 40-plus years. Renewables are an important part of our future of course, but there are limitations. The reality is it will be tough for large countries to get away from the “big three.” I believe that a company that can apply technologies to make two of the big three cleaner and better for the environment while making a profit for shareholders will be well rewarded. We are doing that now with Coalview by actively building a technology company in the coal industry to help mining companies improve their reclamation responsibilities, and the environment.

David A. Schwedel

Previous and current positions include: Senior vice president of OLMC Group; founder of Marex; lead investor of Synthesis Energy Systems; founder and executive director of Coalview Ltd.; founder and executive director of Resonance Fuels.

Personal: Born in Miami; age 48. Married to wife Maria for 12 years, daughter, Simone; and twin sons, Wyatt & Levi; lives in Coral Gables.

Attended: Guilford College, Greensboro, N.C.

Hobbies: “Anything on or under the water.”

Community involvement: Trustee of the Patricia and Phillip Frost Miami Science Museum

Favorite saying: “God never gives you more than you can handle in a day.”