SOUTHAMPTON, Pa.—When many of its competitors were hunkering down preparing for the recession that reared its ugly head in 2009, NewAge Industries Inc. decided to invest in its people and products.
So it should come as no surprise that the Pennsylvania-based manufacturer of rubber and plastic tubing has taken another step that some may perceive as a risk. But don't tell that to NewAge employees. As an employee-owned organization, the roughly 100 professionals at NewAge Industries own 30 percent of a 1-megawatt solar array system consisting of more than 4,000 solar panels. It is the sixth largest such solar array in the state.
The system went online in May and it is expected to generate half of the facility's annual electricity needs. It amounted to a $4.2 million investment that was offset in part by a $1 million state grant and a $1.2 million grant from the federal government.
The value to NewAge Industries is both environmental and financial, said CEO Ken Baker, who expects to receive positive payback on his company's investment within six years.
“The financials matched up, and we wanted to take the next step in our effort to become a green company,” Baker said.
NewAge Industries pays more than $300,000 for electricity each year for its 120,000-sq.-ft. facility (it rents out another 124,000 square feet of adjacent space). That makes the cost of electricity one of the company's largest expenditures.
It isn't the first example of NewAge Industries emphasizing environmentally friendly features.
It updated to more efficient lighting options throughout its manufacturing facility and warehouse and instituted a company-wide recycling program nearly four years ago. It also is purchasing high efficiency compressors and motors for its central air systems and installed 2 inches of solid roof insulation before adding in the solar panels earlier this year.
The system allows employees to follow how much electricity is being generated by the solar panels, and in the current summer months the percentage of power coming from the sun is expected to be high, Baker said.
The solar array solution was designed by California-based Borrego Solar and all components that comprise the solar array were made in the U.S.
Baker first learned about the positive impact of solar power at a trade show four years ago. There he also learned that the right grants could allow it to become an affordable option that could make financial sense. Baker was further encouraged to pursue the solar array by a local industrial developmental resource center in Pennsylvania.
“We're kind of a contrarian type of organization because we tend to do things a little differently,” Baker said. While he wouldn't call that strategy “risk taking,” some of those policies have paid off so far.
NewAge Industries has achieved record growth the past six years. Sales increased by 30 percent in 2010 to $29 million. Even during the recession year of 2009, NewAge Industries was able to grow revenue thanks to the strength of its AdvantaPure tubing and hoses manufactured for the pharmaceutical, biomedical, cosmetic, and food industries. During the last four years, the company's work force also grew by 20 percent.
For more than five decades it has produced and stocked large quantities of rubber and plastic tubing, plastic and rubber hose, fittings and clamps for same-day shipment.
Its materials include PVC, silicone, fluoropolymers, thermoplastic rubber, latex, nylon, polypropylene, polyethylene and others.
Baker and his employees and fellow company owners also feel there is a benefit to having a better idea what the company's electricity bill will be from month to month, and the increased stability should help with future planning.
“We've put together a strategy to position ourselves very well for when the economy recovered and with a large amount of inventory that worked out for us,” Baker said. “We're also committed to being a green company when it makes financial sense by looking at the long-term picture.”