"We predicted that the expansion we did a few years ago would be all the space we'd need for many years, since it involved over 40,000 square feet," said NewAge CEO Ken Baker. "But no one anticipated the pandemic. Business is robust, and we need more production and assembly rooms."
NewAge makes AdvantaPure thermoplastic elastomer products, including AdvantaFlex weldable and sealable tubing, AdvantaSil silicone tubing and reinforced hose, and molded assemblies. The company also offers an array of fittings and clamps to accompany its plastic tubing and hose.
In major part due to the pandemic, demand has skyrocketed over the last year, as NewAge was considered essential, participating in Operation Warp Speed and the distribution of COVID-19 vaccines.
"The new clean room will be ideal for the manufacture of biologics and production of the single-use systems that are prevalent today," Baker said. "These have really taken hold."
"In the olden days," as Baker says, biologics and pharmaceuticals were contained in vessels comprising stainless steel piping. Now they are constructed with polyethylene bags, multi-layered and complex extrusions that are a big advantage to NewAge customers and the environment.
"If you think about the tubing we are making, it is an injectable, a vehicle for a vaccine for things like COVID, yellow fever or the flu," Baker said. "NewAge customers want their systems to be clean, and there is a gamma radiation sterilization process we use to give our products a necessary sterility."
The three main pharmaceutical manufacturers of the COVID vaccines—Moderna, Pfizer, and Johnson and Johnson, household names that were bandied about during the last year like trading cards—all used NewAge tubing and systems to make their medicine.
NewAge sold some of its products directly to these three companies, while other situations dictated that the tubing and assemblies be sold through an intermediary.
No matter how the system got to the patient, NewAge represents a crucial cog in the COVID-19 prevention wheel.
"Operation Warp Speed has changed things considerably," Baker said. "We're hiring, we're improving our processes, and we're renovating another building that we purchased last year. The additional clean rooms at our headquarters will help us get more, much-needed product out the door and on the way to our biopharm and pharmaceutical customers."
The 265 employees of the 100-percent-employee-owned NewAge Industries soon will be spread between Southampton and Warrington, Pa., via another 97,000-sq.-ft. facility that is set to be operational by this fall.
Primarily an extrusion and warehousing facility that already existed, NewAge has invested about $20 million in the building that will be "making saleable products by late October," Baker said. NewAge will look to add another 40 to 60 team members with the completion of the Warrington building, located about 15 minutes from Southampton.
"When fully operational we will have doubled our capacity," Baker said.
The Warrington facility is expected to be one-stop shopping for AdvantaPure customers, with raw materials coming in the front door and end products—such as silicone and thermoplastic elastomer hose and tubing—exiting out the back.
Both the platinum-cured silicone and the TPEs used by NewAge-AdvantaPure are sourced in the U.S., Baker said.
The clean room in Warrington ultimately will house tubing extrusion equipment, mold presses, assembly, packaging and inspection areas. Besides silicone and TPEs, other raw materials used by NewAge include polyvinyl chloride, polyurethane, latex, fluoropolymers and nylon.
NewAge Industries' materials meet 3A, NSF, USP Class VI and other requirements. Rubber tubing and plastic hose styles are available in unreinforced tubing, corrugated or convoluted tubing, and braid-reinforced hose for extra strength and pressure capabilities.
The company works in the food and beverage (think craft beer and home-brewing systems), lubrication systems and OEM equipment manufacturing for pneumatic air lines sectors, as well, and provides chemical transfer systems through its Teflon and Viton tubing.
Pandemic problems
Like so many of its partners and industry competitors, pricing volatility has reared its head of late, especially as it relates to certain materials. But maintaining a multi-supplier philosophy has assisted the company through the ups and downs of a chaotic economy.
"PVC and polyurethane—those have been the big ones," Baker said. "With suppliers, it really depends on the polymer. The issue in the pharmaceutical processing field is with validation, and validation is done by the customer. But generally we work with multiple suppliers for security of supply."
While lead times also have been an issue for products like filters, connectors and clamps, Baker said he believes it is the high demand, rather than the port anomaly problems, that has caused lead time issues.
Benefits of going ESOP
Founded in 1954, NewAge Industries serves customers worldwide. The company is a solar-powered, zero-landfill organization committed to minimizing environmental impact.
Perhaps more than any other single virtue, Baker said he is proud that NewAge is 100-percent-employee-owned, which occurred in 2019.
The company offers employee ownership as part of its retirement plan, profit sharing, a 401(k) plan with a contribution from the company, tuition reimbursement, paid time off and health insurance. And for most of its manufacturing positions, NewAge does its own training.
"Job seekers just need the desire to work with a growing, very successful American company that's making products to help fight the virus," Baker said. "And I always like to talk about employee ownership. I view the employee-owned model as the best business model out there.
"Who knows what will happen to a company if it is sold to a private equity firm? And what are we doing as capitalists? Let's make the employees themselves the capitalists."
