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July 19, 2004

The making of Maine Monolite | Anthony Burich has big plans for his composite manufacturing firm, but can it live up to the hype?

Consider this scenario: Buckets of money are pouring into Maine. Jobs are springing up all over the state. Manufacturing is heating up and Maine has got its hands on the hottest new innovation since Velcro. An economic pipe dream? Not according to Anthony Burich, the managing member of Tualatin, Ore.-based Monolite Composites, who wants to bring the manufacturing of the company's patented composite material to Maine. In fact, if all goes according to his grand five-year plan, Burich expects the new company, Maine Monolite, to be one of the state's largest employers, bringing in hundreds of millions of dollars in revenue each year.

The Maine Monolite concept already has public backing from officials including Bath City Manager John Bubier, Bath Community Development Director Al Smith and Congressman Michael Michaud. Last month, after having their first grant application turned down, Bubier and Smith finally secured a $400,000 community development block grant through the state Office of Community Development to assist in the startup of Maine Monolite. Michaud recently earmarked $2 million for the company in the defense appropriations bill passed by the U.S. House of Representatives in late June.

But despite the seemingly contagious excitement shared by those involved in pushing Maine Monolite toward reality, there remain a number of unanswered questions about the Monolite product ˆ— not least of which is, will Monolite live up to the hype?

For now, nobody's quite sure. Part of the reason for that is Burich's secrecy about the proprietary nature of Monolite, which stung him the first time he worked with Bath officials to secure a development grant from the state. After reviewing their application in April, Office of Community Development Director Orman Whitcomb denied the grant due to a lack of quantitative data that would back up claims of Monolite's viability. The denied grant application sparked a flurry of negative publicity that cast doubt on Maine Monolite's future ˆ— and on the performance of the product. "You can touch it, you can feel it, you can taste it and I have enough data to choke a horse," says Burich. "Yet many people say that it's too good to be true."

What Monolite is supposed to do, according to Burich, depends on its application, and he's got a laundry list of uses, from boat hulls to paneling for military vehicles to building and construction materials. But the main talking points for Monolite ˆ— which is described as a membrane-like coating for composite materials ˆ— revolve around its ability to withstand intense heat (up to 2,850 degrees), corrosion and ballistic damage much better than traditional materials such as aluminum.

Burich admits that much of the Monolite test data is more than a decade old, but says Whitcomb personally contacted him and suggested he resubmit the application through the city of Bath. Burich worked with Vincent Caccese, an associate professor of mechanical engineering at the University of Maine with a background in structural mechanics and composites, to answer Whitcomb's initial questions. "They were considerably more satisfied and comfortable after that," says Burich. (Whitcomb, for his part, says Burich's amended application alleviated certain concerns, but adds that there are still questions about whether the material is suitable for the applications laid out in the grant proposal.)

Michaud, who has been a vocal proponent of Burich's plan, isn't surprised by the skepticism surrounding Maine Monolite. But the congressman says the risk is worth the potential reward the company will bring to Maine ˆ— namely, jobs, jobs and more jobs. "People were skeptical about sending a man to the moon," says Michaud. "If we're all going to be 100% certain before moving forward, then we won't be moving forward. We want to see results, but unless we take risks, Maine won't be able to move forward in diversifying its economy."

The next new thing
Monolite was patented in 1988 by Ron Huegli, who had spent nearly 30 years in the fiberglass and composites industry. Huegli, who lives in Washington but incorporated Monolite Composites in Oregon for tax purposes, developed the product after searching for a superior construction material to build a controlled environmental growth chamber for tomatoes and lettuce. He introduced his find to a string of potential investors with increasingly disastrous results. "I ended up getting involved with a number of individuals that wanted to be investors and own part of the company," he says. "Then they got greedy and didn't want part of the company, they wanted the whole thing."

Years of litigation kept Monolite out of the public eye. But a chance meeting with Huegli at a New Orleans boat show in 2003 gave Burich his first glimpse of Monolite. Mark Newbold, an Australian partner of Burich's, also saw Huegli's demonstration. "Mark talked to Ron and turned to me and said, 'If this stuff does 30% of what he claims it can do, it'll be the greatest innovation in boatbuilding since wood,'" says Burich.

A transplanted New Yorker living in San Diego, Burich was working with Newbold and Chris Hendricks, a former president of Spirit Cruises in Washington, D.C., on a plan to establish an East Coast site to manufacture fast, aluminum-hulled patrol boats for the Department of Homeland Security. They settled on Maine, in part because Burich's wife, Jane Kelley, had grown up in Millinocket. But Burich also was impressed by the access to key decision makers in the state. "What sold me on Maine was a meeting four years ago with John Bubier," he says. "He had 20 people there ˆ— people from economic development, the Department of Transportation, Southern Maine Technical College, the manufacturing community, city representatives. Within three or four weeks, I had an audience with [then-Gov.] Angus King."

But at the time, Burich also was dealing with unsavory characters. His venture, Ocean Flight Technologies, was hijacked, according to Burich, after plans for the boat were taken without authorization by another group of entrepreneurs. That group tried to sell the town of Millinocket on its plans to establish a company called Avenger Boats and manufacture the patrol boats there, asking for millions of dollars in income revenue bonds and loans. The town squashed the deal after discovering that Frank Kristan, one of the principals of American Boat Builders Inc., the parent company of Avenger Boats, was involved in a number of lawsuits alleging such indiscretions as securities fraud and corruption.

Though the 2003 Avenger Boats debacle left Burich without a venture, he decided in August that year to move his family to Topsham after discussing Monolite with Huegli. "I explained that I had zero interest in building aluminum boats because everyone and their brother was making them," recalls Huegli. "But [Burich] felt that Monolite was the future of the boat industry."

Burich said he wanted to establish in Maine a sister company to Huegli's Monolite Composites, licensing the Monolite material for use in the Maine company's own applications. Shortly after arriving in Maine, Burich received a phone call from Lee Fournier, the Bath director of John J. McMullen Associates, an Alexandria, Va.-based marine engineering and design firm. Fournier had heard encouraging news about Monolite from a JJMA engineer who had traveled to Washington state to meet Huegli.

Initially skeptical, Fournier set up a meeting with Burich. "I was a little reserved as to the product's capabilities to meet some of the projections [Burich] was making," says Fournier. "We're very conservative and I wanted to make sure Monolite passed the tests. I'm a Christian, but I haven't seen any miracles recently. In the technical world, it's got to be proven."

A vitamin-fed incubator
A first-hand look at Monolite helped convince Fournier that, from an engineering standpoint, the project was worth pursuing. He recruited Steve Lardie, JJMA's senior engineer in Bath, to help evaluate the product. Mark Cummings, president of Bath-based Fire Risk Management, also came on board, along with consultant Bruce MacMillan of MacMillan Associates in Phippsburg and UMaine's Caccese. The team, which helped Burich put together the request for federal funds through the defense appropriations bill, has worked on Maine Monolite without compensation for nearly a year. (The Monolite name is trademarked, according to company literature, but a search of the U.S. Patent and Trademark Office's online database does not turn up any composite materials called Monolite. It does, however, list trademarks for 11 other products ˆ— ranging from athletic shoes to stucco siding ˆ— with a Monolite name.)

Though Burich admits each member has a vested interest in the fledgling company's success, he claims the group's desire to see an industrial boost in Maine has been its primary driving force. "We saw a lot of potential with the product's applications," says Fournier. "The state of Maine needs them and manufacturing businesses in the state of Maine needs them."

What Burich hopes to accomplish with Maine Monolite is a network of a dozen or more companies spread across the state, all individually licensed to manufacture certain Monolite applications. For example, a plant in Raymond might use Monolite to make composite inserts for military flak jackets, while another facility in Dover-Foxcroft would manufacture sheets of Monolite for use in the building and construction industry. Maine Monolite would help each new branch get up and running, but the new spinoff wouldn't be beholden to its parent company. "What we've done here is bring an opportunity to an area to create something that's viable, marketable and long lasting that they can work with," says Burich. "If they want to take advantage of the opportunity, then we come to the table with an awful lot of infrastructure support and more than the adequate means to get them up and running. It's not so much an incubator as it is a vitamin-fed incubator."

Under Burich's plan, each of Maine Monolite's various locations would be employee-owned, while the umbrella company would have its own board of directors to oversee operations. But Burich says control really would rest with the employees, who also would share in the potential profitability (which Burich sees coming in the first 18 months) via an employee stock option plan and other benefits. Maine Monolite would make money through licensing agreements with the spinoff companies, as well as by supplying the companies with the raw Monolite material.

Caccese currently is working to re-certify out-of-date test results so Burich can offer quantitative data to potential customers and funders. Burich expects to use the $2 million in research and development funds from the defense appropriations bill to begin work on a prototype multipurpose vehicle in conjunction with Bath-based Bigge Defense. Burich's share of the work will include ballistic paneling for the vehicle and the development of a high-tech, Monolite-coated ceramic swing-rotary engine that he says will weigh 40 pounds, pump out up to 500 horsepower and run as far as 150 miles per gallon of fuel. (The funds aren't in the Senate's version of the appropriations bill, but Burich says he's got the support of Sens. Olympia Snowe and Susan Collins, and is optimistic that the funding will go through.)

Burich plans to begin manufacturing raw Monolite and ballistic paneling at a property in Bath by October. He also plans to build a prototype of the swing-rotary engine in Bath, then move production of the engine and the multipurpose military vehicle to a yet-to-be-determined site in Millinocket.

Along the way, Burich and company hope success with Maine Monolite will convince outsiders that Maine's manufacturing industry, instead of teetering on its last legs, is healthy and vibrant. Such an illustrative success, they say, could bring more manufacturing to the state, especially to areas such as Millinocket that have been hard-hit in recent years by manufacturing losses.

Managing risk
Sweeping plans that call for big job growth and a steady flow of new work are enough to get development officials in most Maine towns wide-eyed with anticipation. Grants are easier to secure with support from such officials, and interested towns can agree to foot part or all of the bill to install a new company in their community through bonds or loans. Maine Monolite is an operation that has local officials awash in optimism. Al Smith, Bath's community development director, says Monolite's arrival in the city is "extremely important. It seems like a good fit [for Bath], and it brings back the manufacturing that we've lost here."

But thanks to municipalities' experiences getting burned ˆ— or nearly burned ˆ— by ventures such as Avenger Boats in Millinocket, there's an increasing amount of scrutiny on such deals. Before money starts flowing, a series of reviews at the local and state level must convince dozens of officials that a grant or a loan is in the area's best interest.

Controls also have been put into place that limit a municipality's liability if something does go wrong. For example, Maine Monolite's community development block grant actually was awarded to the city of Bath. It also was changed from a business assistance grant to a grant under the state's economic development infrastructure program, meaning the city would purchase and own the Two Town Landing Road site that would house Maine Monolite. (Or, more appropriately, the building will house the company that will be Maine Monolite. The firm still has not been incorporated in the state of Maine.) "In the original grant, Maine Monolite would have received the money directly," says City Manager John Bubier. "But the Department of Economic and Community Development asked if the city would be willing to receive the funds and buy the building because, frankly, some of the financials are better."

Because the site will be city owned, Bubier and Smith expect to put other projects ˆ— including, potentially, Southern Maine Community College's marine technology program ˆ— into the building alongside Maine Monolite. What's more, the $400,000 grant is based on the creation of 40 jobs in Bath ˆ— a far more conservative estimate than the 150 jobs that Burich expects to generate. Maine Monolite also will be subject to periodic reviews during its first 18 months to make sure it's keeping up with the progress outlined in the grant application. Bubier isn't worried about Maine Monolite's prospects, though he is more comfortable knowing that checks and balances are in place that limit his city's liability. "One reason I'm feeling better [about Maine Monolite] is that we've been around Anthony for a long time," he says. "He's stuck with it and has attracted top-flight engineers from JJMA."

Most local and state officials interviewed for this story are cautiously optimistic about Maine Monolite. The party line is that if it can do what it's supposed to do, Monolite will be a success. But that's far from saying that Maine Monolite is a shoe-in. For example, the $2 million Michaud hopes to secure for research and design is pocket change when compared with the entire $417 billion defense budget the House set for 2005. "The federal government ends up putting a lot of money into stuff that never gets made," says Matt Polstein, a Millinocket town councilor. "It doesn't mean the product's going to be a success at the end of the day."

But Burich is well aware that skeptics are keeping close watch on the development of Maine Monolite. As a result, he's putting Monolite through its paces with Caccese in order to get quantitative data to help convince potential clients ˆ— of whom Burich says there are many, including companies in the defense, automotive and commercial boating industries. On the business side, he's patiently plodding through the economic development process, knowing that haste will only fuel more skepticism. "I had the chance to meet with Governor Baldacci recently, and he said he wants Maine Monolite to happen here," says Burich. "He's in total support of the project as long as it produces what we've represented [as Monolite's potential]. That's not a political statement, but the statement of an intelligent individual. He told me when he sees a ribbon cut, he wants it to stay cut."

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