With financing in hand, GO Lab can start construction at former Madison mill
FILE
Matt O’Malia, of GO Lab Inc., shows off a sample of the startup's insulation.
Belfast startup GO Lab Inc. has closed on the sale of $85 million in bond funding and completed a New Markets Tax Credit transaction that will fund construction of a wood-fiber insulation factory at the former UPM paper mill in Madison.
The company expects to employ 120 people at the plant when fully operational.
Under the current timeline, GO Lab expects to be producing its TimberHP loose-fill insulation in the first quarter of 2023, followed by wood fiber batt and board products in the second quarter and third quarter of 2023, respectively.
All three product offerings will be byproducts of Maine’s timber industry, made from softwood chips or residual material from sawmilling, and low-value pulpwood removed from stands of timber throughout the state. Wood-fiber insulation has been produced in Europe for over two decades and accounts for over $700 million in annual sales across the European Union.
GO Lab selected Cianbro Cos. of Pittsfield to be the lead contractor for the work in Madison, which will culminate in the installation of the three manufacturing lines.
Citigroup Global Markets, underwriter for the bond sale, sold the notes to 14 different institutional investors that manage large municipal bond funds.
“Closing the bond sale is a major milestone for GO Lab,” said GO Lab co-founder and president Josh Henry. “Everyone has worked extremely hard over the past few years to ensure that we would have the significant, up-front capital needed to turn a paper mill into the first wood fiber insulation manufacturing plant in North America. We’re grateful to take this step forward and excited to embrace the hard work that lies ahead.”
To close the bond and NMTC financings, GO Lab also received support in the form of government grants and loans.
“Our investors and government partners have understood, from the beginning, that manufacturing wood fiber insulation in North America, beginning here in Maine, will be a game-changing shift for the construction industry and for our country’s efforts to cut carbon emissions,” said GO Lab co-founder Matt O’Malia.
The state has been looking for new, value-added forest products in recent years, as the downsizing and closure of paper mills has shrunk the market for sawmill residuals and low-grade pulpwood. When the Madison mill closed in 2016, more than 200 workers lost their jobs.
“GO Lab is forging a new and innovative path forward for Maine, expanding our forest products industry in exciting ways that will revitalize manufacturing, provide good-paying jobs in rural communities, and strengthen our economy,” said Gov. Janet Mills.
“The town of Madison is excited to see this entrepreneurial dream become a reality,” said Tim Curtis, Madison town manager. “It’s a great public-private partnership in the redevelopment of an industrial base. Now that the financing is in place, we are poised for forest products manufacturing to begin once again in Madison, with jobs and infrastructure that will make our community an even better place to live and work."
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