This Year’s Models 2008, Part 2 Alltech’s Pearse Lyons

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View PDF COVERstory ACE Weekly December 18, 2008 page 9

“Innovation will power us out of almost anything. America is a place where innovation drives huge business outcomes. It drives job creation. It pays our taxes. It’s created the wealthiest society on earth. We forget, in the middle of all this doom and gloom, that we have the strongest universities, the most creative people….”
—Eric Schmidt, CEO Google

In 2008, we’ve witnessed an historical Presidential election; we’ve seen the collapse of some mega Wall Street names; we’ve seen the American icons of General Motors, Ford and Chrysler jet to Washington looking for bailouts; we’ve seen an Illinois Governor blatantly attempt to sell a senate seat; we’ve seen Sarah Palin ignore a turkey being beheaded and shredded; and we’ve seen shoes thrown at President Bush in Iraq. Locally, we’ve seen the good ol’ boy network of Lexington conspire to grant us a theoretical hotel.

Clearly, our city, our state, our nation and our world needs authentic leadership like never before in our history. We must dare to be different, we must dare to think new thoughts, to take new paths, and to find serious answers to serious problems.

Alltech founder and president Dr. Pearse Lyons is a self professed “recession atheist.” The way he frames it, “crisis” in Chinese consists of two words —danger and valuable opportunity; therefore, crisis — what does it mean? Valuable opportunity.

As a recent guest speaker at UK’s Patterson School of Diplomacy, Dr. Lyons, pointedly mapped out his pathway to business success, even in turbulent times. “First, identify the problem,” he said. “Second, do research. And third, provide the answer.”

The company provides over 300 jobs to Central Kentuckians just in Nicholasville (1800+ worldwide). Partly because of their sponsorship of the 2010 World Equestrian Games, Alltech is a household name in the Bluegrass.
Dr. Lyons is credited by many with dragging the bluegrass economy (kicking and screaming) into the future. This global animal health company employs more than 1,800 people and has a presence in 85 countries around the
world, with sales over $500 million.

Jim Host says, “I first met Dr. Lyons in 1977 when he came into my office with his vision of Gasohol — His entire business career has been about his vision and his love affair with Kentucky —I consider him Kentucky’s greatest salesman world wide. His offices and manufacturing plants all over the world are built with the Kentucky look. His company is rapidly becoming one of America’s greatest companies in bio-tech development.”

For such a large company, Lyons is known for making decisions quickly, and locally. When Jim Host asked Alltech to be the title sponsor of the games, Lyons said yes in about 10 minutes. He claims this is the most expensive cup of coffee ever, but he thinks it’s the best decision the company has ever made, echoing what Bill Gates has said (if he was down to his last dollar, he’d spend it on P.R.)

Colleague Bill Cheek reminisces as fondly as Host does. He says, “In the early 80s Dr. Lyons and I were meeting in Muleshoe, Texas. The purpose of the trip was for Dr. Lyons to conduct a class at an ethanol plant located a few miles from Muleshoe. We both arrived, driving our own vehicles equipped with C.B. radios, late at night. Dr. Lyons decided to go to the plant the next morning, leaving at 4.30 AM, to set up the class room and return to Muleshoe for breakfast prior to the meeting at 7 AM. We left at 4.30 AM and it was pitch black outside and Dr. Lyons was following my car. After several miles using the C.B., I told Dr. Lyons I thought we had passed the road to the plant. He said ‘let’s make a U turn and you follow me.’ After a few miles, two headlights were coming directly toward Dr. Lyons’s vehicle at a high rate of speed. It was a semi-truck and at the last minute the truck swerved to his right avoiding a head-on collision. The truck
driver then said on his C.B. : ‘LOOK OUT ALL W/B TRAFFIC, TWO IDIOTS WHO MUST BE DRUNK ARE GOING THE WRONG WAY ON THIS DIVIDED HIGHWAY —I’M
LEAVING THIS CRAZY STATE AS QUICKLY AS POSSIBLE.’

When leaving Muleshoe the road divided to two lanes each way and we did not notice the split. When I questioned Dr. Lyons why he didn’t swerve he said it was a game of ‘CHICKEN’ and he wasn’t going to swerve. It turned out if he would have swerved, he wouldn’t be with us today.”

Considering the fact Alltech is now growing at an annual clip of 20 percent, it is clear that the Bluegrass’ own Dr. Lyons doesn’t swerve. He has a plan. #1. Identify the problem #2. Do research #3. Provide the answer. Compare that, for instance, with many things we see around us at work, in government, in the media, at home. The first one is easy: A TON of people are adept at identifying problems. Often, incessantly. If that was the only skill required, we’d all be billionaires. Where Dr. Lyons begins to distinguish himself, and Alltech, however, is in Steps Two and Three.

However, what is even MORE difficult, and what really separates the men from the boys, is in Step Three —providing the answer. And in today’s chaotic times— when the economy is seemingly disintegrating all around us, people are losing their jobs and houses left and right, bailouts are being sought, the global environment is wilting every year, there has NEVER been a time when answers and solutions are needed more. Today’s times call for serious research producing serious solutions, and Lexington is fortunate to have Dr. Pearse Lyons call the Bluegrass his home. Who else around here ponied up $10M to bring 600,000 visitors to Lexington for the 2010 World Equestrian Games? Who else openly states that his goal is to “superbrand Kentucky” as well as superbrand his own endeavors? Who else travels the state, preaching encouragement and possibilities, when most others are harping on what CANNOT be done?

Our region’s leaders could learn from Dr. Lyons — seizing crises and transforming them into opportunities. Turning water into wine, or in his case, converting algae into biofuel.

In addition to sponsoring the World Equestrian Games, Lyons and Alltech have launched their statewide Fortnight Festival for the Arts. Lyons says, “As I toured the state last fall, I realized we needed something above and beyond the Alltech FEI World Equestrian Games, something to bring the state together, and something for which everyone could be excited. Music is the great communicator, and we believe this one-of-a-kind entertainment festival will put Kentucky on the map.”

Working collaboratively with Centre’s Norton Center for the Arts, UK’s School of Music, LexArts and the Kentucky Arts Council, Alltech is conducting an ongoing series of topshelf concerts leading up to the 2010 Games. Recognizing the foundational role that arts and culture play in a region’s economy, Dr. Lyons has unquestionably dared to be different, once again. Having begun already, here in 2008, scheduled to blossom nicely in 2009, and culminating in 2010 with fourteen days of major performances, in venues and stadiums around the state, Alltech’s Fortnight Festival is already transforming the cultural landscape of the Commonwealth (http://www.alltechfestival.com/events).

Plugging up the Brain Drain
Alltech sponsored the first PhD student for the Margin of Excellence Fellowship; serving as role model to other businesses to sponsor more PhD students and encourage them to stay in the Commonwealth.

Dr. Lyons always refers to PhDs as being Poor, hungry and Driven. He says that we want them Hungry for success and driven, but not poor and certainly not really hungry. He says that we should pay PhDs like they are the future,
because that’s what they are.

Margin of Excellence:
The Margin of Excellence program was developed by Alltech as a means of rewarding the dedication of graduate students in the study of science while promoting technology and development in Kentucky. The fellowship is a stipend of $40,000 per year for a maximum of five years for each graduate fellow. This stipend is in addition to any awards given by the university.

“This program is very exciting to us because it attracts brilliant, young minds to our state,” says Lyons. “We believe Ph.D. should no longer be an acronym for Poor, Hungry, and Driven. Students have to put their lives completely on hold to further their education because today’s doctoral studies take an average of five to six years to complete. We want to reward the dedication and enthusiasm of these students by enabling them to focus entirely on their studies.”

In addition to the yearly stipend of $40,000, the fellowship provides funds for travel to conferences and other laboratories, bonuses for extraordinary performance, mentoring, and unique links to the industry. Since one of the primary goals of the Margin of Excellence Program is to attract and retrain talent in Kentucky, students will receive a retention bonus of $10,000 if they remain and work in Kentucky for three years following completion of their fellowship.

“With a maximum potential sponsorship of each fellow at $200,000, this is a significant investment for Alltech,” says Dr. Lyons. “However, we believe the backbone of the future is the education of our youth.”

Alltech Young Scientist Program:
Alltech’s Annual Young Scientist Program is traditionally held for undergraduate students, this year a second category was added to include graduate students. A commitment to research and young people is essential to both the success of our industry and to Alltech. The Alltech Young Scientist Program is designed to encourage students to enter the field of animal science,” says Lyons.

“With the dramatic increase in applicants during the first three years, I think we have a bright future.”

“The Alltech Young Scientist Award has given me and others like me an opportunity to begin leaving the shores of the classroom and wading into the waters of professional research,” said Craig Louder, 2008 winner. “It has been a tremendous learning experience and I encourage any student who is interested in science to take advantage of this opportunity.”

Louder, a student at Utah State University, won with his paper entitled, “The Estrogenic Mycotoxin Zearalenone and its Importance in Livestock Production.” He joins 2007 winner, Lucas Mascardi from the University of Buenos Aires, Argentina, and Matthew Scobie from the University of Saskatchewan, Canada, the 2006 winner.

To participate, students must write a scientific paper based on a topic about animal feed technologies. Undergraduate students’ papers must be 3000 words in length and graduate students’ papers must be 5000 words in length. The program will include two phases: the regional phase and the international phase. The deadline for submission is February 27, 2009.

In 2006, there were 86 applicants for the Alltech young Scientist Program. In 2007, there were 201 applicants for this program In 2008, there were 750 applicants for this program

Bringing Science to the Classroom:
At Seton Catholic School in Lexington, Kentucky Alltech’s team built and installed a teaching laboratory outfitted with science equipment and supplies. These projects are continuing at other schools in the area because encouraging the enthusiasm and imagination of students at an early age is important. The fifth laboratory is currently under construction.

Close to Alltech’s headquarters in Kentucky, employees participate in a mentoring program for The Providence School, a non-traditional public school. In Central Europe, Alltech staff are working with young people in ways others might overlook, sponsoring youth programs that include games, music and theatre.

Alltech–University of Kentucky Nutrition Research Alliance at Coldstream Research Farm:

Alltech, in conjunction with the University of Kentucky, has published the first annual report of the Alltech–University of Kentucky Nutrition Research Alliance at Coldstream Research Farm. This partnership, formed in 2004, has resulted in one Ph.D. dissertation, four scientific journal articles, nine scientific posters, and 25 scientific
abstracts in its first full year of operation.

“The Alltech-UK Nutrition Research Alliance has been a tremendous success for both Alltech and the University of Kentucky,” says Dr. Lyons.“With industry and academia working together, Alltech has access to the brightest minds at the University of Kentucky, and those students have an opportunity to gain valuable experience in a commercial setting.”
“Alltech has been a tremendous supporter of the University of Kentucky in several areas,” says Dr. Lee Todd, President of the University of Kentucky. “Their presence at the Coldstream Research Farm is key factor in our efforts to make UK a top 20 public research university.”

The alliance with the University of Kentucky is part of Alltech’s Bioscience Center concept, in which Alltech works closely with local universities to improve its research capacity. Alltech is currently the second largest supporter of graduate degrees in agribusiness in America, behind only the U.S. government.

Operating the research facility is a team comprised of Alltech and University of Kentucky researchers and faculty members. They include, from the University of Kentucky, Dr. Tony Pescatore, Dr. Austin Cantor, Dr. Robert Harmon, and Mike Ford. The team also includes Alltech researchers Dr. James Pierce, Dr. Karl Dawson, Dr. Ted Sefton, and Dr. Tuoying Ao.

GREEN IS GOOD
Clean energy technology will be part of the wave of the next economy and Kentucky’s heavy reliance on coal hasn’t exactly identified it as a mecca for new thinking in this arena. Sustainability, custodians of the environment and the efficient production of food have been the by-words of modern agriculture since the first Green Revolution tried to find ways to feed the world’s poor. We are in the grip of a new green revolution — this is a revolution driven in part by concerns over biofuels production and the spiraling cost of feed and food. The nutrition industry has a role to play. It is Alltech’s hope that, just as those who came of age in the 1940s are remembered as the ‘Greatest Generation,’ the Ag industry’s deciders and influencers will make their mark in the wider world as members of the ‘Greenest Generation.’Alltech’s interest in biofuel, particularly, sets Kentucky’s course in a new direction.

Biorefinery:
Alltech is closely involved in the development of biofuel production techniques that are not entirely reliant on grain, receiving a $30 million grant from the US Department of
Energy (DOE) to build a community biorefinery in Springfield, Kentucky, which has the ability to produce ten million gallons of biofuel from a variety of fibrous raw materials
such as switchgrass.

The goal of the community biorefinery is to create a viable platform capable of adopting emerging technologies, while enabling local farmers to create local jobs using local materials, including wet Distillers Dried Grain that is fed directly to cattle raised and marketed as locally produced beef under a locally branded label.
[Alltech also received] approval from the Kentucky Economic Development Finance Authority (KEDFA) for financial incentives for its rural community biorefinery project, the first such model in North America that integrates feed, food and fuel production. The incentive is the first of its kind to be awarded by the Commonwealth. The incentive will total $8 million and will be based on a sales tax refund for building and equipment costs, a state income tax wage reduction for new employment and a credit against state income taxes. Alltech will receive the benefits under the Incentives for Energy Independence Act, enacted during the Second Extraordinary Session of the 2007 Kentucky General Assembly.

CHEERS!
Dr. Lyons’ most recent innovation is the introduction of the first distillery in Kentucky to be located in the same building as a brewery. Named Alltech’s Lexington Brewing and Distilling Company, not only is this business the first of its kind in the state, but the distillery will be the first opened in this city in more than 75 years.

Appropriately named Pearse Lyons Reserve, the first malt whiskey will be available in time for the Alltech FEI World Equestrian Games 2010. When operating at peak capacity, 100,000 gallons of whiskey is to be produced per year from the distillery. Perhaps more impressive than the distillery itself is that Dr. Lyons’ desire to build such
a business arose more than 28 years ago when he worked for Irish Distillers in his native Ireland. He truly is an entrepreneur who has undertaken an unprecedented activity that has turned eyes to Downtown Lexington as the home of the first brewery/ distillery in Kentucky. Although the establishment of this distillery is a new effort, the Lexington Brewing Company has been in existence since 1794, using Kentucky’s local limestone water to brew high quality beer.
In 1999, Dr. Lyons purchased the brewery, giving it the name Alltech’s Lexington
Brewing Company. Not only are tours offered to the public so visitors can understand more about the process of brewing three award winning beers, the brewery allows Dr. Lyons to see Alltech’s yeast and other brewing products in action.

Using Kentucky’s natural resources to create award winning products and educating the public about the science behind the process exudes the true spirit of an entrepreneur involved with the community, especially the community of Downtown Lexington. Dr. Lyons prefaced his education tour this past fall with the comment, “Alltech has an exciting vision of what the future of agriculture in Kentucky, and ultimately
the United States, can look like and I’m thrilled to have the opportunity to share that,” Dr. Lyons explained. “I really believe that Kentucky can become a global leader in advanced agriculture. We have an opportunity to position ourselves as the Silicon Valley of the agriculture industry and to energize our rural community in the process.” Clearly, our city, our state, our nation and our world needs authentic leadership like never before in our history. We must dare to be different, we must dare to think new thoughts, to take new paths, and to find serious answers to serious problems.

BIO

Dr. Pearse Lyons received his bachelor’s degree from the National University of Ireland in Dublin and pursued his master’s and doctoral degrees at the University of Birmingham, England. He later worked as a biochemist in Irish Distillers before founding Alltech in 1980.
Today, the company is a global leader in the animal health industry, with sales over $500 million. Lyons received the State Export Award for Kentucky and was acknowledged as the leader of one of the top 100 fastest-growing high-tech companies by World Trade Magazine. He was the Kentucky recipient of the Entrepreneur of the Year in 1993. Lyons has been recognized for his contribution to science and industry and has been awarded honorary doctorates from the University of Plymouth, England,
and Heriot-Watt University, Scotland.

His alma mater, National University of Ireland, Dublin, selected Lyons as one of its honorary doctorates on the occasion of its 150th anniversary. Recently, he was recognized as one of the top 15 Irish-American life scientists of the year by Biolink USA-Ireland. He has authored more than 20 books and numerous research papers in scientific journals.

 

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