Paul Musco's Day Job: Gemini Industries

Orange County Business Journal, Jul 30-Aug 5, 2007 by Beighley, Dan

ENERGY: Arts benefactor's company extracts metals from refineries

A small Santa Ana chemical company's role in the multi-billion-dollar oil industry is precious.

Gemini Industries Inc., which recovers precious metals used by oil refiners to produce octane for gasoline, lists every major North American oil company as a client, as well as refineries on every continent.

"We are a major factor in our segment of the industry," Gemini Chairman Sebastian "Paul" Musco said.

The company extracts metals from clay-like pellets known as catalyst and returns them to refiners.

For its part, Gemini takes half a percent of the recovered metals, plus processing charges. Revenue fluctuates with the price of the metals.

The Business Journal estimates Gemini's revenue at about $40 million a year.

Oil refiners use about 200 million pounds of catalyst a year. About 25 million pounds need to be changed out each year.

"There is a continuous flow of exchanged catalyst," said Mahmoud "Dr. Mel" Elguindy, Gemini's president and chief executive.

There are two small competitors in North Dakota and California. Gemini has about 65% of the niche market, according to Musco.

Musco started the company in 1972 with a Small Business Administration loan of $500,000. After working for precious metals companies for 50 years, Musco said he wanted to do something on his own.

"My major objective was to employ the best talent in the industry," he said. "And to become not the biggest but the best."

Gemini started in a garage in Newport Beach. These days. Musco has three processing plants in Santa Ana and Irvine, plus a newly opened facility in Caldwell, Texas.

"There's no resemblance to what we looked like when we first started," he said.

Gemini got its start purifying precious metals. It dealt in scrap left over from the electronics, dental, film and jewelry businesses.

"It was a lot of work when we first started, but we got a break on a couple of things," Musco said.

The first break came from Vietnamese refugees living at Camp Pendleton in the late 1970s.

They brought gold with them. The refugees were looking to exchange it for dollars. Gemini stepped in as a buyer. It was able to purify and resell the gold at a higher price.

"It gave us a big boost," Musco said.

Gemini then moved from Newport Beach to where it is now in Santa Ana.

The company's second break also came in the late 1970s when catalytic converters were required for cars to cut pollution.

Musco and others at Gemini spent weeks figuring out a way to extract precious metals from the catalytic converters. Then it scored a key contract with General Motors Corp.

The deal and another with Ford Motor Co. grew Gemini to 50 workers. The company had a lock on its niche, according to Musco. "No one else could do the process more economically," he said.

Getting Into Oil

In 1978, Gemini figured out a way to extract metals from oil refining catalyst.

Within five years, the oil industry became the company's focus.

Contracts with Chevron Corp. and what's now Exxon Mobil Corp. were made. They led Gemini to work with other oil companies.

"We get better and better at what we do," Musco said.

He gives much of the credit to Elguindy, the source of most of the company's scientific expertise.

He joined in 1985 and runs the company on a daily basis.

Gemini's recently added Texas facility is designed to handle hydrocarbons, which Gemini is restricted from doing in California because of environmental concerns.

Nor could Gemini build its Santa Ana plant in California today, according to Elguindy.

The company invested $6 million in Texas but could end up spending as much as $25 million through expansion, he said.

The facility should increase business by 20%, Elguindy said.

"Every time we've finished an expansion, business has skyrocketed," he said.

Texas was picked for its proximity to major oil companies.

As for California, there are many reasons for Gemini to keep its facility in Santa Ana, Elguindy said.

A short drive to the Port of Los Angeles gives Gemini access to clients all over the world, he said. And duplicating the Santa Ana plant somewhere else would cost $50 million, according to Elguindy. Then Gemini would have to train new workers.

Musco said he gets buyout offers all the time. He's the sole owner.

"It's not easy to build a company like this- it's just not worth the investment money needed to compete in such a restricted market," he said.

As for his succession plans. Musco said the future of the company would be put into the hands of employees.

There are 60 people at the Santa Ana plant. About 15 are set to be hired for the 21 -acre Texas facility. The average tenure with the company is 15 years.

Musco is known in the county for his philanthropic efforts, which include serving as chairman of Opera Pacific and on the boards of Chapman University, Canyon Acres, the Orange County Sheriff's Advisory Council and others.

Brought up in Rhode Island by Italian immigrant parents, Musco had six brothers- one of them is his twin-and three sisters.