SmallBiz/LSP/24″/mike1st/mark2nd
By LISA STEEN PROCTOR
Staff Reporter
Take waste paper and cardboard, license a technology developed by the federal government, and you have the basis for a product much stronger than the sum of its parts.
So strong, in fact, that it can be used to make interior walls, ceilings, furniture and one day might be used to make exterior walls, as well.
It’s not hard to see the potential of such a product, being developed by Gridcore Systems International in Long Beach.
The panels, for example, could one day be used instead of drywall in construction, according to the company’s president and CEO, Lee Greenberg.
“One of the unique things about this product is that it can cross-bridge into many different markets and applications,” he said. “Our license from the USDA is very broad.”
In addition to their strength, the panels are lightweight, can be bent into curved shapes (while traditional building materials must be soaked with water or heated to be made pliable), and are themselves recyclable (no toxins are used in the process).
And they’re very versatile, adds Greenberg.
Among the things constructed with Gridcore panels are furniture (Gridcore employees sit at desks made of the product), store displays by such retailers as The Gap, trade show displays, and room dividers in offices.
There is the potential for even more versatility. 20th Century Fox plans to try out the product to create sets for an upcoming movie, according to David Saltman, Gridcore’s vice president. Because Gridcore is easily assembled and lightweight, the United Nations Commission on Refugees also might consider its use as a “more dignified” shelter system for refugee resettlements, said Greenberg.
“Shigeru Ban, a consultant to the U.N. Commission on Refugees, has designed and built a prototype refugee house made primarily of Gridcore products. With some refinements, he plans on presenting it to the United Nations High Commissioner on Refugees,” he said.
The Gridcore license was obtained when Robert Noble, an industrial design architect, was trying to develop an advanced structural design for low-cost housing. Noble had considered using waste materials for construction panels, but had concluded that the idea was not feasible and instead chose a fiberglass/plywood design that is, until he met a University of Southern California architecture student in 1991 who showed him a flyer describing the technology, developed by the U.S. Department of Agriculture.
Noble recognized the potential, contacted the inventor and negotiated an exclusive license for the technology.
“I knew it was potentially a far superior structural panel than what we were about to patent,” he said. “The technology was just sitting in a lab and not being commercialized.”
That same year, Noble founded Gridcore capitalized with his and his wife’s savings and spent the first couple of years perfecting the USDA technology. The company raised additional capital in 1993 in a $1 million private offering.
In 1995, Noble (who is still the largest single shareholder and the chairman and chief technology officer) brought on Greenberg as the top operational executive to move the company to the next step mass production of the panels.
Interest has been especially strong overseas.
Nihon Cement Co. of Japan, a multibillion-dollar Japanese building-materials company, has purchased a 15-percent equity stake in Gridcore and has entered into a joint venture with the Long Beach company with plans to begin building a panel-manufacturing facility in Japan by early 1998.
Triple I Co. Ltd., a British Virgin Islands-based company, has entered into a similar relationship with Gridcore, with plans to build facilities in Germany and Brazil. Sky Capital Partners Inc., the U.S. investment arm of Taiwanese investment funds, also has invested in Gridcore and is interested in potential ventures in Taiwan and China.
“We are in negotiations with other companies regarding potential strategies in other countries,” Greenberg said. “In general, when we enter into a collaboration, a part of that collaboration includes an investment in Gridcore so that there’s a synergy of interest and a joint vision.”
To meet the demand, Gridcore dramatically expanded the production capacity of its Long Beach facility to more than 13 million square feet. To accomplish that expansion, the factory was shut down for 10 months last year, resulting in revenues last year of only $500,000.
This year, revenues are projected to be about $7 million, said Greenberg. The company has already “inked a $700,000 deal” with the U.S. Postal Service to take undeliverable business bulk mail and other waste and turn it into furnishings for the postal service’s lobbies, said Greenberg.
Gridcore’s Long Beach facility is running 24 hours a day, seven days a week, with the capacity to crank out about 800 to 1,000 four-by-10-foot panels each day. Gridcore has also begun designing its second U.S. facility, which is expected to have more than twice the capacity of the first.
The second facility also will be located in Southern California, possibly Long Beach, said Greenberg. A third U.S. facility is planned for 1999, likely to be located in the southeastern United States, where there is a high concentration of furniture manufacturers.
Spotlight
Year Founded: 1992
Core Business: Manufacture of honeycomb panels made of post-consumer waste paper and cardboard
Top Operational Executive: Lee Greenberg
Revenues in 1993: $150,000
Revenues in 1996: $500,000
Revenues in 1997: $7 million (projected)
Employees in 1993: approximately 15 (varies)
Employees in 1996: approximately 30 (varies)
Employees Currently: 60
Goal: To expand sales of the company’s product into a global market.
Driving Force: Growing worldwide demand for sturdy, inexpensive building materials.
