Two-year-old Spokane Valley manufacturer One Earth Starch recently has grown into an adjacent space to prepare for expansion and additional storage of its biodegradable alternative to plastic foam packaging peanuts.

One Earth Starch, which makes a product called Eco Smart Loose Fill from corn and potato starch, now occupies 9,500 square feet of leased space in the Spokane Business & Industrial Park, at 3808 N. Sullivan.

The larger quarters will enable the company to produce and store an additional semi-trailer load of new product a week to fulfill a contract with a distributor that's expected to be finalized soon. One Earth Starch's general manager, John Dill II, declines to identify the anticipated new distributor until details of the transaction are complete.

One Earth Starch, a division of Rugosa Trading Inc., a Blaine, Wash.-based packaging-fulfillment company owned by Len and Marsha Beckett, sells on a wholesale basis to paper and packaging distributors. Packaged in 12-cubic-foot bags, Eco Smart Loose Fill offers similar cushioning characteristics and is offered at about the same cost as the ubiquitous plastic packaging peanuts, Dill says.

"We're trying to put Styrofoam out of business," Dill asserts. "There is no reason for anyone to use Styrofoam, yet they still do."

He says Eco Smart Loose Fill breaks down in minutes if dropped in a glass of water.

The division currently sells to distributors that include Anderson Paper & Packaging Inc., based in Ferndale, Wash., and Kent, Wash.-based WCP Solutions, which has a Spokane Valley facility. Spokane-based Earthworks Recycling Inc., at 1904 E. Broadway, is a distributor locally that sells the One Earth Starch product at retail for $17 per bag.

"We slowly are converting more distributors to use our product over Styrofoam," Dill says. "We were profitable quickly, and in the green industry, that seems to be one of the challenges. We reached that with the combination of a good idea, a good patented process that works, and Spokane is a lower cost place than Seattle or Portland because the facilities are less costly to lease."

He adds, "We moved into profitability after about 18 months from starting, which was about six months ago." He says the division's revenue last year doubled that of the first year of operation.

Dill is the only full-time employee here, in addition to two part-time workers. He and his wife, Cecelia, own Dill Companies Inc., which holds the management contract for One Earth Starch. If the new distributor contract is finalized, Dill expects to hire at least one additional employee.

The Eco Smart pellets are 80 percent corn starch and 20 percent potato starch, using raw material from the grain country of Minnesota, Dill says. The material is fed into a food extruder that grinds, heats, and converts water in the material to steam. Then, when extruded through a small die, the material expands rapidly, pops, and is cut into pieces resembling plastic-foam peanuts.

"When it gets to a high temperature, it's forced out and pops like popcorn," he says. "It's very simple process, the same process used to make Cheezies or cheese puffs."

The facility uses a standard food extruder with some modifications for its operations, he adds, and he designed other production pieces, including a screen platform for cooling the fill. He says that One Earth Starch has refined its product to be dust free, competitive in pricing, and consistent in size.

"It's high-tech, low-tech," he adds. "There are a lot of details. You have to watch the process closely because it's a natural product, so it varies. You can't set the machine and leave it, but it goes like clockwork."

One Earth Starch has increased its production significantly since the first 2010 shipments, Dill says. It's gone from a production of an average 700 bags a month by the end of the first year, he says, to an average of 1,200 to 1,400 bags a month at the end of 2011.

"I'm expecting that by the end of the third year (2012), we'll be at an average of 3,500 bags a month," he says. "We're still expecting another 30 to 40 percent conversion" by distributors who use plastic-foam peanuts.

Typically, he runs production five days a week, but for the November to December holiday shipping rush, he sometimes operates it during a short period at seven days a week, he says.

Before starting this venture, Len Beckett and Dill worked together as business partners in a software company. In fall 2009, Dill agreed to move from Arizona to Spokane to launch One Earth Starch. Spokane Valley became the desired location in part because the Becketts had secured a patent license for the Inland Northwest to make the starch-based product, Dill says.

Dill says the patent license for manufacturing in the Seattle area already was taken by another company. An Italian company holds the original patent for the product, he adds.

He estimates about 50 similar starch-based packaging material manufacturers are spread around North America.

Dill says the initial facility setup here cost about $300,000 in time and equipment.

The Becketts also found that they could lease a facility in Spokane Valley at significantly less cost than on the west side of the state, Dill says. Their business in Blaine, Wash., offers custom packaging and bulk mailing, among other distribution services.

"They were using Styrofoam, and then Len discovered this product about three or four years ago coming on the market," Dill says, adding that Beckett then decided to investigate how to make the product regionally.

Rugosa Trading eventually might consider opening other One Earth Starch facilities, he says, adding, "It would be nice to expand and add more locations."

Dill asserts that marine biologists frequently warn about the harm of plastic-foam peanuts to marine animals and birds that eat them. "They don't digest," he says. "It kills them."

He adds, "There are some municipalities in North America that are considering making the use of Styrofoam illegal. Styrofoam is good for long-term use like insulating refrigerators, but for short-term packaging, it gets into the environment, and it's like throwing grit into the gears."