I was driving through central Maine recently, and was struck by how dreary the landscape looked. The houses and towns looked run-down, and store fronts were vacant. This is an old story about industry leaving rural areas, and can be seen almost anywhere. But then we came to the town of Madison and saw this:
This gigantic, new-looking factory suddenly appeared in the middle of nowhere. What could be going on here?
It’s the site of a brand-new kind of wood-processing mill from a startup called GO Lab (home page). The older brick buildings have been there for a century, and used to be a paper mill powered by hydro from the Kennebec River. The newer blue buildings were put up by a Finnish company, UPM-Kymmene, who used them to make “supercalendared” paper, a kind of low-end glossy paper used in newspaper inserts. Newspapers have been disappearing, though, so the mill closed in 2016. Various groups bought the equipment and the rights to the hydropower, but no one was employed there.
GO Lab bought the mill in 2020. They had been using small business loans and grants to explore producing low-density wood fiber insulation. These are panels used for exterior and interior insulation. They’re made from the waste softwood from lumber mills, reinforced with a glue called PMDI, and with paraffin for water resistance:
The tongue-and-groove boards are for the exterior sheathing of houses. The flat panels go between 2x4s for interior insulation, and the batting gets stuffed into crannies. Compared to the usual plastic foam and fiberglass panels, they:
- Actually sequester carbon from forests, rather than using petrochemicals or letting the waste wood rot back into methane and CO2
- Don’t emit toxic chemicals when burned; they just char slowly
- Are permeable to water vapor and so discourage mold
- Can be cut with ordinary tools, and the dust is safe.
- Have excellent R-values for thermal insulation
- Have good sound-absorbing properties for acoustic insulation
They’ve been used in Europe for the last 20 years, and are very popular there, accounting for $700M in sales. They’re bulky and hard to ship, though, and so are more expensive than plastic panels in the US. Europe is also running out of waste wood supplies.
The co-founder and president of GO Lab, Josh Henry, is a materials scientist who heard about this product a few years ago. He got his doctorate in chemistry from Columbia, did post-grad work in Sweden, and then was a prof at the Maine Maritime Academy and the University of Maine. He started the company with an architect, Matt O’Malia, in 2017. They bought a used production line from Germany and have been installing it for the last six months. Just last month they closed on an $85M bond offering from the Finance Authority of Maine. They plan to begin production in Q2 of 2023.
The state of Maine loves ventures like this, of course. It fits right into their historical industries, will employ 100 or so people, will revitalize Madison, and fits into the green economy of the future. The governor of Maine, Janet Mills, chose this factory to announce how she’ll spend federal money from the American Rescue Plan. A lot of Maine subsists now on tourism (they even call themselves Vacationland on the license plates), but the “hospitality industry” means catering to the whims of a lot of cranky and rude people, most of them from Massachusetts. It’s much better to just build things rather than have to keep up a strained smile as people complain about the WiFi.
That must be why this is being financed by the state rather than banks or venture capitalists. This kind of re-industrialization used to be routine. Products went out of fashion, and new ones with new technology just replaced them. That doesn’t seem to be happening as much. It’s so much easier to make money in software or finance that capital for straight-up manufacturing like this seems scarce. Of the 10 most valuable companies in the US, only Tesla actually makes anything here. It now takes government support to back a real economy in an out-of-the-way place like Madison.
So here’s wishing luck to GO Lab! This looks like a solid, green product that should be useful everywhere.