Founder Profile: Daniel Loikits

Daniel Loikits grew his father’s small heating oil business into Loikits Industrial Services, which has been servicing and maintaining equipment for the petro-chemical, pharmaceutical, specialty process, healthcare, hospitality and senior living industries since 1979.

But in 1992 Loikits, 57, whose specialty is the service and installation of industrial refrigeration and heat transfer systems and gasoline terminal operations equipment, saw the need for environmentally friendly, ultra-low-temperature heat transfer fluids. This led him in the direction of research and product development.

By 1997, he had his first product line, and incorporated Dynalene, which develops, manufactures and distributes industrial heat transfer fluids and high-performance coolants. Loikits and his staff have developed more than 25 product lines. With clients all over the globe, Dynalene was one of “Inc. Magazine’s “fastest-growing chemical companies” in 2009, 2010 and 2011. In addition to its two buildings in Whitehall, it is putting the finishing touches on a facility in Chicago.

What was the inspiration behind Dynalene?
The root of old-style refrigeration systems was methylene chloride and trichloroethylene, which were very efficient heat transfer fluids, but they were carcinogenic.

We needed to get rid of the toxic chemicals because of EPA regulations. So I wanted to develop a fluid that was environmentally friendly that could go down to ultra-low temperatures. I went to Ben Franklin Technology Partners, and they hooked me up with Dr. James T. Hsu, (a professor of chemical engineering) at Lehigh University. I also got grant money from Ben Franklin, which was extremely helpful. Through this collaboration I started to learn how to do research.

We developed a liquid derived from citrus peels, which have a chemical called d-limonene that starts freezing around 140 degrees below zero. We found that with the right combination, we could take a fluid down to 200 below zero.

I named the company Dynalene, after my ex-wife Diana and limonene.

How has the company grown?
The first product had a limited market, but now we have developed a water-based fluid, Dynalene HC, that goes down to 60 degrees below zero and is environmentally friendly. We’re also involved now in nanotechnology. We’ve developed several nanoparticles that we put inside fluids to make them very efficient. One of the applications for this is direct-energy weapons used in fighter jets that fly at 60,000 feet. The Department of Defense has put a lot of money into our research on this.

Now we have about 25 employees, and we have bought a lot of lab equipment through various grants, so now we offer lab services to other companies. Last year we sold 2.5 million gallons of product.

What resources did you use in getting your company launched and helping it grow?
At the time we started, Loikits Industrial Services was making about $4 million a year, so we could support the research that went into Dynalene. Ben Franklin was very helpful (BFTP also helped Dynalene win $850,000 in Small Business Innovative Research grants from the U.S. Department of Defense, as well as funding from the U.S. Department of Energy). I credit Ben Franklin and the Manufacturers Resource Center for a lot of our success.

The research with Dr. Hsu resulted in our hiring some of his best students, including Dr. Satish Mohapatra, who is now Dynalene’s president and CEO.

What was your biggest challenge in getting the company off the ground?
Our biggest challenge was getting product acceptance. Now our reference list is huge, with many large pharmaceutical companies. Engineers aren’t afraid to specify Dynalene products.

What’s the big differentiator for Dynalene?
Our competitors are very big, and heat transfer fluids are only part of their business. We are really dedicated to selling just this type of product. We have less overhead, we buy raw materials at really good prices. We solve problems for our customers every day, and provide great service. And we have products that others don’t have, and our price is right and we still have a nice profit margin.

What’s next for Dynalene?
We’re putting in a facility in the Chicago area, which should be done (in about a month), and we want to put in a similar facility in Salt Lake City. The reason is that we need to be closer to our customers, because freight charges are very expensive. Eventually we’d like to put up a facility overseas, maybe in Singapore.
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