On December 30, 2021 in Madison, Maine, GO Lab, Inc. announced the closing of its sale of $85 million tax-exempt green bonds issued by the Finance Authority of Maine.
Maine’s need for new, value-added forest products has intensified in recent years, as the downsizing and closure of paper mills in the state 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.
“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.”
Citigroup Global Markets, underwriter for the transaction, successfully sold the notes to fourteen different institutional investors that manage large municipal bond funds. With the bond closing, GO Lab also completed a New Markets Tax Credit (NMTC) transaction. The two financings give GO Lab the cash in hand to launch construction of its wood fiber insulation manufacturing facility at the defunct UPM paper mill in Madison.
“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.”
GO Lab has selected Cianbro, of Pittsfield, Maine, to be the lead contractor for the work in Madison, which will culminate in the installation of three manufacturing lines to make TimberHP—wood fiber insulation for the residential and light commercial construction markets.
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. TimberHP loose fill, batts and continuous exterior boards will work as a complete above-grade insulation system or as cost-competitive replacements for existing insulation products in the North American market. High performing and non-toxic, TimberHP will also be renewable and recyclable and the only scalable insulation solution with a negative carbon footprint.
To close the bond and NMTC financings, GO Lab received unwavering support from its equity investors and state and local partners, 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.
Under GO Lab’s current production timeline, the company expects to be producing TimberHP loose fill insulation in Q1 of 2023, followed by wood fiber batt and board products in Q2 and Q3 of 2023, respectively. All three offerings will be a true byproducts of Maine’s timber industry, made from softwood chips—the residuals from sawmilling—and from low-value pulpwood removed from stands of timber throughout the state.
“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 Maine Governor Janet Mills. “It has been a pleasure to work with these young entrepreneurs and my Administration looks forward to their continued success.”
Once operating at full capacity, GO Lab plans to employ more than 120 people. As the company moves toward hiring more people later in 2022 and into 2023, it will be consulting on candidate cultivation and recruitment with Jobs for Maine Graduates, Kennebec Valley Community College, the Workforce Solutions team at Coastal Enterprises, Inc. and partners and supporters in the state’s forest products industry.
Photo of former UPM paper mill courtesy of GO Lab.