Company gives away the store but charges for savings: Etorus makes money when truckers conserve fuel.

WHEN Shraga Agam and Gil Bordoley got their hands on what they hoped would be the next big thing in fuel-saving technology, they took a decidedly unusual marketing tack: give the product away at no cost to consumers.

Now, after just about a year on the market, their Encino company, Etorus Inc., has distributed thousands of its in-line fuel catalysts to new customers.

"We wanted to do something that can grow very big very fast," said Agam, the company's chief executive. "The best way to do that will be to tell the customer that they have no capital risk and no capital investment."

Of course, there is a catch. Trucking companies that opt to have the catalysts installed for free in their rigs must split the money they save on fuel with Etorus for as long as they keep the devices in their trucks. That's called the Pay Per Save program. If the motor carrier does not want to share the fuel-savings revenue, it can simply buy the device outright for about $2,000, but Pay Per Save is proving popular.

One advocate of the program is Steve Hansen, vice president of Hansen and Adkins Auto Transport Inc., a Signal Hill trucking company with about 220 rigs in its fleet. After being contacted by Etorus, Hansen installed the device--at no cost--in five of his trucks in January. He has been tracking the miles per gallon for each truck, and he said the rigs have been saving between 3 percent and 4.5 percent on fuel costs.

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"I was skeptical at the beginning about the device and the program, but the numbers are working out, so I really can't complain," he said.

To ensure that customers accurately report their fuel savings, Etorus uses Jasper, Ind.-based National Energy Control Services Inc., a regulatory compliance and fleet technology company, to monitor each customer's fuel consumption.

With diesel prices in California around $3 a gallon, Hansen estimated that each of his five catalyst-fitted trucks will save about $2,500 per year on fuel costs. As a result, he plans to install it in several more trucks this month.

Called the Reduced Fuel Consumption System, the catalytic device can be easily installed in the fuel line of a truck. The technology was developed for diesel engines. It moves apart the fuel molecules, allowing oxygen in, so that less fuel is needed to do the same amount of work.

According to the company, this process can reduce fuel consumption by as much as 9 percent, along with a decline in carbon dioxide and nitrogen oxide emissions.

The devices work on machines including trucks, trains, cranes and furnaces--and the cost of the devices range from about $800 to $7,000, depending on the application.

Etorus is quick to point out that the technology has been validated by several independent studies, including ones by the Southwest Research Institute, Toyota Motor Corp. and Virginia Tech University.

The device "showed a reduced fuel consumption of 7.6 percent," along with a reduction of nitrogen oxides, carbon monoxide and hydrocarbons in a hot water furnace, the Virginia Tech study said. The Toyota study, meanwhile, found a 3.2 percent reduction in fuel consumption by a Caterpillar tractor using the catalyst.

The technology was originally developed in the 1980s and 1990s by a West Palm Beach, Fla.-based company called Rentar Environmental Solutions Inc. But the device was not always so efficient, and it has taken a series of upgrades and improvements before it was ready to bring to market. In fact, the catalyst being sold today is the fifth-generation version of the device.

And interest in the device didn't take off until recently with skyrocketing fuel prices and a more cohesive "green" movement.

Now, Rentar manufactures the devices and Etorus is a primary distributor along with Boynton Beach, Fla.-based Puradyn Filter Technologies Inc. and National Energy Control Services.

Agam and Bordoley founded Etorus in 2005 with their own money. They spent about a year getting the company started and late last year they began selling the product.

Etorus has rolled out its product in small numbers to some very large companies. Again and Bordoley hope to prove that their product works and thereby build a reputation. The company expects revenue of about $700,000 this year. But with the Pay Per Save program, much of the capital return on the products will come later, so company earnings may be anemic for a while, Agam said. But they're hoping for a big payoff later.

"We are absolutely giving away revenues today for much more revenue in the future," he said.

BY RICHARD CLOUGH 

Staff Reporter