March 5, 2007
Cluster bomb | A chat with Harbor Technologies founder Martin Grimnes about growing Maine's composites industry
By Erview By Taylor Smith
In the late 1990s, Martin Grimnes was downright evangelical about composites in Maine. His company, Brunswick Technologies Inc., was growing fast, making fiberglass fabrics for use in the marine and auto industries. In 1999, the company posted $44 million in revenues and nearly $1.8 million in earnings.
That year, Grimnes told Mainebiz of his vision to cast Maine's composites industry in the image of Route 128, the Boston byway that at the time was choked with dot-com firms. It was a rising-tide-lifts-all-boats scenario, with startups and mature companies sharing ideas and resources to boost their collective bottom line ˆ and attract more composites companies to the area. "Location-wise, Maine is not as crazy as people think," he said in 1999.
But his dream was short lived. In less than a year, BTI was no more, snapped up in a hostile takeover by a French firm, Compagnie de Saint-Gobain, for $44.2 million ˆ a price Grimnes then complained was unconscionably low. The deal effectively ran Grimnes out of the composites industry.
At least for a while. Like any self-respecting entrepreneur, Grimnes couldn't stay away. In 2003, he bucked up and started Harbor Technologies, a Brunswick company that makes composite docks and floats. It's a much more modest venture than BTI, with just 12 employees and sales last year of around $250,000. (Grimnes says what was supposed to be a great 2006 was spoiled when a $1.6 million order for a customer in Belfast went "belly up." This year, he expects the company to hit the $1 million mark for sales.)
With the launch of Harbor Technologies, Grimnes, 59, was back evangelizing about Maine's composites industry. This time, the idea is catching on. The state's composites players banded together as the North Star Alliance in late 2005 to apply for a lucrative federal grant that delivered more than $15 million to the state for its composites and boatbuilding industries. Earlier this year, Grimnes partnered with Topsham real estate developer James Howard to spearhead the Allied Composites Center at Brunswick Industrial Park, which currently houses Harbor Technologies. And he's still bullish on a composites cluster.
Mainebiz recently sat down with Grimnes to talk about Harbor Technologies, the best way to build a cluster and fostering cooperation among competitors.
Mainebiz: What was one lesson you learned from the Brunswick Technologies Inc. ordeal?
Martin Grimnes: I think from the get go, we learned that you have to add value to a product to stay competitive. And we did that to manufacture products that weren't currently available. And when the machinery wasn't completely available, we'd make the machinery. [Around then], China was starting to be a player. We started to see things landing on the West Coast that made us say, "Whoa." It was glass fabrics that we manufactured at BTI. And you could sort of see that coming because you had seen that in other industries, with pretty nasty examples. Take textiles ˆ the U.S. textile industry just got clobbered.
How can a manufacturing company compete with China?
You're not going to compete with China unless you're Hodgdon Yachts, where the craftsmanship and the niche is protecting you. So we were looking for ways to add additional value to our products, to take it one step closer to the end user... [so that] you have that much more control over your own destiny. So that was an effort that was ongoing at BTI. But we never got to where the company should have been, in my opinion. It got taken over and it got taken over for the reason that [Saint-Gobain] wanted it for its manufacturing volume.
What changes have you made from BTI to your new company, Harbor Technologies?
We make floats and docks, but we pride ourselves in being a composites systems solution. If you just sell the product, you're not that in control of your destiny. But if you get a little deeper involved in how it's going to be used and actually try to develop systems and methods of using it, than you can make that product more competitive.
We sold a product to Sikorsky. I think we removed 160 labor steps in molding one canopy for a Sikorsky helicopter. One molded part. You can do things with composites that are very, very, very interesting.
Back in the late 1990s, you talked about making Maine the Route 128 of the composites industry. What did you mean?
Take Silicon Valley, or take where Microsoft is located in Washington. You take a hotbed of technology development, and it can't fail. Things spin off of that. You get companies started, or you have mature companies. You get students educated in the field. Some stay and some start something on their own, and you get this cluster hotbed that produces things by itself. Once you get it started, it's self perpetuating. But you have to get the environment started.
This time around, what are you hoping to do with Maine's composites industry?
We are trying to build a very healthy, self-sustaining cluster. I don't think we're ever going to get the mega conglomerates, though I shouldn't say that because there are some that have knocked on the door here. But I think we can have an industry that has an employee range from, say, 50 to 300 people that can be very competitive worldwide. Once you start getting bigger than that, little things come into play, like distance to market and this and that. But at this level, I think we can create a very technologically competitive industry.
Is Maine well positioned in the composites market?
Not yet. What you see from the North Star grant and MTI, those are two significant opportunities that will allow us to propel those activities. Right now, we don't have any huge successes to speak of, but those shall come. There are also several things happening at the universities that are very exciting, like product development and testing.
Is it easier these days to sell people on the cluster concept?
I think the Brookings Institution report certainly added validity to the argument. And the argument had been around for a long time. When we started Maine Technology Institute, especially from the composites side, we tried to argue very hard with [the Department of Economic and Community Development] that they needed to support the industry organization directly, and fuel it ˆ much the way the state has done for years with the biotech industry.
So these groups have to be directed by industry rather than, say, the state?
They have to be. If you have public employees run industry organizations or try to promote industry activities, they're not very good at that. Number one, they have to go through education first as to what this industry needs and what this industry does not need. And what will give us more bang for the buck? There's a lot of wasted time and activities that are translated into dollars. What we don't need is more scorekeepers.
Do you mean studies and surveys and that sort of thing?
Yeah, rather than what stimulates direct economic activity. And sometimes those types of investments might find themselves in conflict with policy as public funds are being used. I mean, why would you want to help an individual company directly? It could be looked at as a conflict of interest. It could be seen as helping individual entities, and that's not in the public's interest.
Is there any worry that competition within an industry will hurt the cluster concept?
I don't know how many lobster boat makers are up and down the coast, but they're competing for the same market. It's very amicable. I haven't sensed any negative rivalries that have [hurt] the industry as a whole. I think you do want competition, otherwise you don't hone your own expertise.
You've been working to develop a kind of composites campus in Brunswick. How's that going?
Yeah, it's the mini cluster. It would not have happened if we hadn't had the North Star grant. Number one, there are several large, multinational companies who might be interested in coming to Maine.
Like who?
I don't really know where they're at right now, and I don't know if I'm at
liberty to say. But they're large entities. But anybody of any significant size would have the need for qualified employees and would very much appreciate a training center and other facilities like testing, which the university would provide.
Where we have this industrial park in Brunswick, where Harbor Technologies is located, there were a couple of lots next to us, plus the one we're on. And we said that with all the indirect support that a company locating here could obtain through the educational efforts and through sharing of resources, we could create a little cluster that would benefit from that support and benefit from those shared services ˆ whether it's a common warehouse with forklift services or whatever.
It would be a place to grow. Not necessarily an incubator, but a place where a mature company could benefit and a startup could benefit. Real estate costs would be the same [for both mature and startup companies], but if you start sharing [the cost of] services you can make a very attractive lease facility.
You've also been eyeing space at the Brunswick Naval Air Station, right?
We've been talking to the town of Brunswick that this might serve as a very interesting test operation that if successful could be exported onto the base. It's another few years, but there are several entities, us included, who can't wait for that.
Do you have anybody set to move into this mini-cluster?
We have two or three candidates, including ourselves ˆ we need to expand into a larger facility. The companies are all directly involved in the composites industry.
Why will this work in Maine?
It's a people thing. This is philosophically speaking, but I think that people that live in Maine are nice people. The population of Maine has some pretty healthy values. When it comes to sharing and competing and acting as human beings, in terms of our individual strengths and weaknesses and how we deploy those, I think Maine is a unique place and people love living here. People are desperate to find an excuse for making this a successful place for them to live.
That year, Grimnes told Mainebiz of his vision to cast Maine's composites industry in the image of Route 128, the Boston byway that at the time was choked with dot-com firms. It was a rising-tide-lifts-all-boats scenario, with startups and mature companies sharing ideas and resources to boost their collective bottom line ˆ and attract more composites companies to the area. "Location-wise, Maine is not as crazy as people think," he said in 1999.
But his dream was short lived. In less than a year, BTI was no more, snapped up in a hostile takeover by a French firm, Compagnie de Saint-Gobain, for $44.2 million ˆ a price Grimnes then complained was unconscionably low. The deal effectively ran Grimnes out of the composites industry.
At least for a while. Like any self-respecting entrepreneur, Grimnes couldn't stay away. In 2003, he bucked up and started Harbor Technologies, a Brunswick company that makes composite docks and floats. It's a much more modest venture than BTI, with just 12 employees and sales last year of around $250,000. (Grimnes says what was supposed to be a great 2006 was spoiled when a $1.6 million order for a customer in Belfast went "belly up." This year, he expects the company to hit the $1 million mark for sales.)
With the launch of Harbor Technologies, Grimnes, 59, was back evangelizing about Maine's composites industry. This time, the idea is catching on. The state's composites players banded together as the North Star Alliance in late 2005 to apply for a lucrative federal grant that delivered more than $15 million to the state for its composites and boatbuilding industries. Earlier this year, Grimnes partnered with Topsham real estate developer James Howard to spearhead the Allied Composites Center at Brunswick Industrial Park, which currently houses Harbor Technologies. And he's still bullish on a composites cluster.
Mainebiz recently sat down with Grimnes to talk about Harbor Technologies, the best way to build a cluster and fostering cooperation among competitors.
Mainebiz: What was one lesson you learned from the Brunswick Technologies Inc. ordeal?
Martin Grimnes: I think from the get go, we learned that you have to add value to a product to stay competitive. And we did that to manufacture products that weren't currently available. And when the machinery wasn't completely available, we'd make the machinery. [Around then], China was starting to be a player. We started to see things landing on the West Coast that made us say, "Whoa." It was glass fabrics that we manufactured at BTI. And you could sort of see that coming because you had seen that in other industries, with pretty nasty examples. Take textiles ˆ the U.S. textile industry just got clobbered.
How can a manufacturing company compete with China?
You're not going to compete with China unless you're Hodgdon Yachts, where the craftsmanship and the niche is protecting you. So we were looking for ways to add additional value to our products, to take it one step closer to the end user... [so that] you have that much more control over your own destiny. So that was an effort that was ongoing at BTI. But we never got to where the company should have been, in my opinion. It got taken over and it got taken over for the reason that [Saint-Gobain] wanted it for its manufacturing volume.
What changes have you made from BTI to your new company, Harbor Technologies?
We make floats and docks, but we pride ourselves in being a composites systems solution. If you just sell the product, you're not that in control of your destiny. But if you get a little deeper involved in how it's going to be used and actually try to develop systems and methods of using it, than you can make that product more competitive.
We sold a product to Sikorsky. I think we removed 160 labor steps in molding one canopy for a Sikorsky helicopter. One molded part. You can do things with composites that are very, very, very interesting.
Back in the late 1990s, you talked about making Maine the Route 128 of the composites industry. What did you mean?
Take Silicon Valley, or take where Microsoft is located in Washington. You take a hotbed of technology development, and it can't fail. Things spin off of that. You get companies started, or you have mature companies. You get students educated in the field. Some stay and some start something on their own, and you get this cluster hotbed that produces things by itself. Once you get it started, it's self perpetuating. But you have to get the environment started.
This time around, what are you hoping to do with Maine's composites industry?
We are trying to build a very healthy, self-sustaining cluster. I don't think we're ever going to get the mega conglomerates, though I shouldn't say that because there are some that have knocked on the door here. But I think we can have an industry that has an employee range from, say, 50 to 300 people that can be very competitive worldwide. Once you start getting bigger than that, little things come into play, like distance to market and this and that. But at this level, I think we can create a very technologically competitive industry.
Is Maine well positioned in the composites market?
Not yet. What you see from the North Star grant and MTI, those are two significant opportunities that will allow us to propel those activities. Right now, we don't have any huge successes to speak of, but those shall come. There are also several things happening at the universities that are very exciting, like product development and testing.
Is it easier these days to sell people on the cluster concept?
I think the Brookings Institution report certainly added validity to the argument. And the argument had been around for a long time. When we started Maine Technology Institute, especially from the composites side, we tried to argue very hard with [the Department of Economic and Community Development] that they needed to support the industry organization directly, and fuel it ˆ much the way the state has done for years with the biotech industry.
So these groups have to be directed by industry rather than, say, the state?
They have to be. If you have public employees run industry organizations or try to promote industry activities, they're not very good at that. Number one, they have to go through education first as to what this industry needs and what this industry does not need. And what will give us more bang for the buck? There's a lot of wasted time and activities that are translated into dollars. What we don't need is more scorekeepers.
Do you mean studies and surveys and that sort of thing?
Yeah, rather than what stimulates direct economic activity. And sometimes those types of investments might find themselves in conflict with policy as public funds are being used. I mean, why would you want to help an individual company directly? It could be looked at as a conflict of interest. It could be seen as helping individual entities, and that's not in the public's interest.
Is there any worry that competition within an industry will hurt the cluster concept?
I don't know how many lobster boat makers are up and down the coast, but they're competing for the same market. It's very amicable. I haven't sensed any negative rivalries that have [hurt] the industry as a whole. I think you do want competition, otherwise you don't hone your own expertise.
You've been working to develop a kind of composites campus in Brunswick. How's that going?
Yeah, it's the mini cluster. It would not have happened if we hadn't had the North Star grant. Number one, there are several large, multinational companies who might be interested in coming to Maine.
Like who?
I don't really know where they're at right now, and I don't know if I'm at
liberty to say. But they're large entities. But anybody of any significant size would have the need for qualified employees and would very much appreciate a training center and other facilities like testing, which the university would provide.
Where we have this industrial park in Brunswick, where Harbor Technologies is located, there were a couple of lots next to us, plus the one we're on. And we said that with all the indirect support that a company locating here could obtain through the educational efforts and through sharing of resources, we could create a little cluster that would benefit from that support and benefit from those shared services ˆ whether it's a common warehouse with forklift services or whatever.
It would be a place to grow. Not necessarily an incubator, but a place where a mature company could benefit and a startup could benefit. Real estate costs would be the same [for both mature and startup companies], but if you start sharing [the cost of] services you can make a very attractive lease facility.
You've also been eyeing space at the Brunswick Naval Air Station, right?
We've been talking to the town of Brunswick that this might serve as a very interesting test operation that if successful could be exported onto the base. It's another few years, but there are several entities, us included, who can't wait for that.
Do you have anybody set to move into this mini-cluster?
We have two or three candidates, including ourselves ˆ we need to expand into a larger facility. The companies are all directly involved in the composites industry.
Why will this work in Maine?
It's a people thing. This is philosophically speaking, but I think that people that live in Maine are nice people. The population of Maine has some pretty healthy values. When it comes to sharing and competing and acting as human beings, in terms of our individual strengths and weaknesses and how we deploy those, I think Maine is a unique place and people love living here. People are desperate to find an excuse for making this a successful place for them to live.
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