When Green is Not Enough: Lessons from a Cleantech CEO

2/9/12Follow @bvbigelow

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overcome in order to advance a new manufacturing process.” The hazards of using petroleum-based resins and adhesives also were less apparent to the public—urea-formaldehyde was a common ingredient in many building products—and the low cost of petroleum-based chemicals made it harder to compete. “The business lessons I learned are related to building the right team and culture in the company, but I’d say the biggest lesson was that it was doable—even though we got a very conservative reception,” Noble says. “Architects, engineers, designers, and end customers are just very cautious about anything that is new.”

Twenty years later, gasoline no longer costs 95 cents a gallon, and the aftermath of Hurricane Katrina included a very public lesson in China’s liberal use of urea-formaldehyde to make the paneling in trailers used for emergency housing. So the economics have tilted somewhat in Noble’s favor, and he contends that public interest in green and sustainable building products is even higher today.

Still, he concedes that what the industry calls “high performance composite panels” remains a commodity market—some manufacturers can produce more than 300 million square feet of panels a year at a cost of 20 cents or 30 cents per square foot. In contrast, Noble estimates that Ecor panels will sell at $6 a square foot after production begins, which will probably be late this year.

But Noble adds, “We’re not a commodity product. We’re focused on high added-value applications and niche applications. We have a business that’s focused on low volumes and high value.” The primary market they are targeting consists of interior design firms, furniture makers, and other businesses that specialize in retail signage and displays, theatrical set design, and architectural décor. Custom orders from such businesses will enable the San Diego facility to “source locally, make [the product] locally, and use it locally,” Noble says.

As business expands, Noble says he expects to license the Ecor technology to other manufacturers, both small and large, to serve local markets in other regions of the country. Whether they manufacture panels under the Ecor brand, he adds, “We don’t care, as long as we can get good margins.”

Noble also says the soft housing construction market means that major forest-products companies are looking for new markets, and new partners to reach them. “What we’re doing is a direct line into markets that they want to get into,” he says. “Large producers know they also have to ‘build to spec,’ and they’re running to us.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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