For years, the insulation market has consisted of three primary products: fiberglass, foam and newspaper-based cellulose.
Very soon, consumers will have a fourth choice: cellulose insulation made from Old Corrugated Cardboard (OCC).
The concept of treating cardboard containers with liquid enzymes and fire retardants, then turning them into insulation, was developed in 2009 by a team of insulation industry experts and University of Maine researchers. Their initial work was funded in part by a $100,000 grant from the Maine Technology Institute. In 2010, the team founded Green Comfort Safe, Inc., to commercialize the process.
After receiving a patent in 2011 (which is jointly owned by the University of Maine-Orono), Green Comfort Safe merged with US Dynamics and later recapitalized as ProCell Insulation. In 2013, the newly renamed UltraCell Insulation – headquartered in Newtonville, Mass., – secured seed funding from angel investors and brought on its full-time CEO, Mark Brandstein.
“I joined UltraCell in late 2013 because, despite not coming from the industry, I saw an intriguing opportunity which could take advantage of my core skills,” says Brandstein.
“While many of my earlier startups were telecommunications related, this one offered the opportunity to make a difference to the environment for future generations, as well as the opportunity to be a new take on what was a fairly staid industry…building materials,” he continues.
New Solutions for a Growing Market
With the supply of printed newspapers rapidly declining due to the rise in online news, UltraCell is poised to hit the market at an ideal time.
“Newspaper supply has dropped more than 65% in the past seven years alone and is experiencing something like a further drop of 8% annually,” says Brandstein. “This is coming at a time when demand for cellulose insulation in the $7 billion North American market is growing at two times the rate of fiberglass and foam insulation.”
Because UltraCell’s unique manufacturing process uses repulping and chemicals to break down and screen out the contaminants (tapes, glues, staples, etc.) found in old corrugated cardboard, the company can use up to 100% old corrugated cardboard, a material found in large supply. In addition, they can potentially use OCC fiber waste from major paper plants, reducing the cost of the produced product by up to 30% or more.
Perhaps most innovative is the company’s process for embedding a liquid fire retardant directly into the cellulose fibers rather than mixing it as a dry additive.
“UltraCell’s patent introduces a proprietary borates blend into the wood fiber using a wet solution,” says Brandstein. “With this, we can use up to 50% less borates than otherwise used to achieve the required fire resistance, providing a very uniform or consistent coverage of the fire retardant and a significant cost savings.”
Simply replacing the traditional newspaper-based cellulose insulation market segment is not UltraCell’s primary objective, however. The company expects to gain significant market share over the next 5-10 years as market drivers such as higher energy costs and the green materials movement favor cellulose insulation over fiberglass and foam insulation.
Pilot Production and Future Plans
Earlier this year, UltraCell received a $40,000 grant from the Massachusetts Clean Energy Center and Massachusetts Technology Transfer Center, as well as a $100,000 research grant from the U.S. Environmental Protection Agency (EPA) under the EPA’s Small Business Innovative Research (SBIR) Program.
The grants helped fund a pilot production run, which is currently underway. The company has also been applying for additional grants and talking with potential investors and partners.
“Our go-to-market plan is to JV partner with a paper mill or two in 2015,” says Brandstein. “We’ll have them produce the product with us and we’ll handle the sales, marketing, order processing and technology process guidance for them.”
“To fund this, we will need about $2 million for the next 18-24 months,” he continues. “Depending on timing and who our strategic paper plan production partners end up being, the financing will likely come from a combination of private/angel investors and possibly private equity companies and our strategic production partners.”
According to UltraCell’s timeline, the product will be shipped to installers by the third quarter of 2015, giving consumers a greener choice for insulating their homes next winter.