News Article

Economic Driver: Award Acknowledges Aspen Aerogel's Technology and Innovation
Date: Jun 07, 2015
Author: Sandy Meindersma
Source: ( click here to go to the source)

Featured firm in this article: Aspen Aerogels Inc of Northborough, MA

Thanks to its initial public offering in June 2014, Aspen Aerogels Inc. has retired its debt, opened a new production line and is looking to make additional investments in both research and development and production capacity.

"The additional responsibilities of being a public company are not insignificant, but we believe the trade-off of now having the resources to execute more fully our strategic plan is well worth it," said Donald R. Young, the company's president and chief executive officer.

Aspen Aerogels is headquartered at 30 Forbes Road and its manufacturing plant is in East Providence, R.I. It was established in 2001, when it was spun off from Aspen Systems Inc., a Marlboro-based engineering contract and research services firm.

Aspen Aerogels Inc. is one of 23 small businesses nationwide to be awarded the 2015 Tibbetts Award, presented by the Small Business Association, for its exemplary role in the Innovation Research and Technology Transfer programs.

The IPO raised $74.7 million; $19.8 million was used to retire debt and $11.3 million part of the company's $26.5 million capital expense to build the third manufacturing line in East Providence. The remaining cash has been retained by the company.

The third production line, which began operations in March, expanded the company's production capacity by 25 percent. More employees were hired in late 2014; the current employee count is 244.

Mr. Young indicated that he anticipates the workforce will grow by 10 to 15 percent this year throughout the company, including manufacturing, engineering, sales and marketing, and research and development.

The company's five-year revenue CAGR (combined annual growth of the company) is 29 percent, and Mr. Young said that the company faced production capacity constraints for much of 2014.

In addition to the third line in East Providence, the company is looking to establish a second US-based manufacturing plant by 2017. A specific location has not yet been announced.

"Line 3, Plant 1 and Line 1, Plant 2 are critical investments for us to continue to grow substantially and serve our target markets," Mr. Young said. "Line 1, Plant 2 is projected to increase our manufacturing capacity by an additional 50 percent."

Mr. Young said he expects the company will add 100 more employees as part of the expansion to a second plant.

Aerogel insulation is used in oil refineries, petrochemical plants, liquified natural gas, power and defense industries. It is a nanoporous inorganic material and very efficient compared to its thickness.

"It's essentially low-density glass," said George Gould, company vice president for research and development. "It is three and a half times more efficient than fiberglass and twice as efficient as polystyrene."

While aerogels are quite rigid, Mr. Gould said, the company has been able to develop products that are flexible, so it can be used where it is needed.

"It is easy to install, efficient and environmentally friendly," he said. "Our customers usually wind up saving money on either the installation or their energy costs, or both.

"To date our products have saved more than 100 trillion BTUs of energy and counting," Mr. Gould said. "Our products have an improving value as the temperatures rise."

Because the company was spun off from a research services firm, Mr. Gould said, research and development is part of Aspen Aerogels' DNA. The company has received more than $60 million is federal research funding since its inception, $3.1 million in 2014 alone. Much of that funding comes when a government agency identifies a problem and the company responds to a request for proposals to develop a solution to the problem.

"Small businesses are highly innovative and more willing to take risks that are not appealing to larger companies," Mr. Gould said.

Aspen Aerogels was nominated for the 2015 Tibbetts Award by Ashley Lindley, deputy program manager for advanced technology/advanced research, at the Missile Defense Agency in Washington, D.C.

Mr. Gould said the company worked with the Missile Defense Agency to improve thermal insulation in defensive missile systems and developed a new product that has improved performance.