National Science Foundation awards $741,221 to cycleWood Solutions

U of A-affiliated company has commercialized compostable lignin blends bag

FAYETTEVILLE, Ark. – The National Science Foundation has awarded a $741,221 grant to cycleWood Solutions Inc., a technology company affiliated with the University of Arkansas.

Nhiem Cao, president and chief executive officer of cycleWood Solutions, said the grant allows the start-up company to accelerate the commercialization of the company’s trademarked single-use Xylobag – a strong and tough compostable substitute for traditional plastic bags. The Xylobag blends lignin, an abundant organic polymer that is most commonly derived from wood, with a compostable material.

Ozark Natural Foods in Fayetteville began stocking Xylobags in July and cycleWood Solutions has secured commitments from two retail chains to stock the bags, Cao said. The company displayed the Xylobags last month in Baltimore at Natural Products Expo East, the East Coast’s largest natural, organic and healthy products event.

“Using compostable bags and liners removes the risk of plastic contamination in compost,” Cao said. “The commercialization of these modified lignins will help to alleviate the plastic waste problems that are impacting municipalities across the country.”


Lignin is a byproduct from paper mills and biofuel plants, so no additional trees or plants need to be harvested to produce Xylobags. The bag has been certified compostable by the Biodegradable Products Institute and will break down in as little as 12 weeks in a commercial composting facility.


The National Science Foundation Phase II grant came through the Small Business Innovation Research Program, which allows federal agencies to stimulate technological innovation in the private sector by strengthening small businesses that meet federal research and development needs. The program is intended also to increase the commercial application of federally supported research results.


CycleWood Solutions, whose growth was cultivated at the Arkansas Research and Technology Park in Fayetteville, received an NSF Phase I grant through the Small Business Innovation Research Program in the fall of 2012.


“The Phase II project addresses the need for affordable compostable plastics to replace petroleum-based plastics,” Cao said. “Plastic bags are an environmental eyesore that pollute waterways and kill wildlife. Local governments are now passing laws to ban the use of plastic bags in efforts to hinder the spread of pollution. Utilizing compostable lignin resins displaces conventional plastics with a sustainable alternative and makes composting easier.”


Cao incorporated cycleWood Solutions with co-founder Kevin Oden in the fall of 2011 and the firm maintains an office at the Arkansas Research and Technology Park. Cao and Oden are both graduates of the University of Arkansas, each holding a bachelor’s degree in engineering and a master of business administration.


Cao and Oden have collected accolades, cash awards and investors since developing the business concept for cycleWood Solutions in 2011 with other M.B.A. students in the New Venture Development class taught by management professor Carol Reeves in the Sam M. Walton College of Business at the U of A.

In 2012, cycleWood Solutions received an Edison Award, one of the highest honors a company can receive in the name of innovation and business. The Xylobag was assessed by a panel of more than 3,000 judges, and after a long peer-review process, the team was presented with a bronze Edison Award, named after the American inventor Thomas Edison.


Nhiem Cao, president and CEO cycleWood Solutions Inc.
Phone: 479-304-2871

Chris Branam, research communications writer/editor
University Relations
Phone: 479-575-4737



University of Arkansas, press release, 2014-10-08.


cycleWood Solutions Inc.
National Science Foundation (USA)
Ozark Natural Foods
University of Arkansas