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Sniffling and sneezing? Erie's Direct Allergy promotes curative treatment

For the millions of Americans with moderate to severe allergies, allergen immunotherapy (AIM) is a time-tested and highly effective cure. But the number of allergists and immunologists who provide AIM in the United States is dwindling due in part to the prevalence of short-term, over-the-counter remedies. 

Erie’s Direct Allergy aims to address that disconnect by offering turnkey, third-party AIM services, enabling family doctors and primary care physicians to provide this specialty care.

"We provide the expert labor, the specialized labor and the certified labor [to medical practices]," says founder and president Bob Schultz. "We are bringing allergy immunotherapy to the frontline of medicine."

According to Schultz, pills, nasal sprays and similar medications only mask allergy symptoms; AIM actually cures allergies by slowly conditioning patients' immune symptoms to the allergen with weekly treatment over several years.

"It’s a better modality," he explains. "It just hasn’t been marketed to primary care."

For the practices, Direct Allergy offers a way to enhance clinical offerings, improve patient satisfaction and boost revenues without disrupting everyday operations. For patients, Direct Allergy's services are more convenient and less costly than visiting a specialist.

Schultz founded Direct Allergy in 2012 with several other longtime pharmaceutical industry executives. Ben Franklin Technology Partners of Central and Northern PA invested $350,000 to help launch several test sites. 

Testing is now complete and Direct Allergy is in full operation at five sites in Titusville, one in Pittsburgh and two in western New York State, and is in negotiations in other states. Schultz projects that the company will expand into as many as 15 sites by the end of the year and to 36 by the end of 2015. The company currently employs 10 and could grow to 30 by year’s end.

Source: Bob Schultz, Direct Allergy; Liz Wilson Ben Franklin Technology Partners/CNP
Writer: Elise Vider

New PA-based trade group advancing "the Business of 3D Printing"

Just like the Internet in the '90s and home computers in the '80s, 3D printing -- itself already more than 25 years old -- is neither fad nor hype. 

Now a new trade group, the 3D Printing Alliance,  is convening "The Business of 3D Printing," a June 18 conference in Harrisburg intended to look at how this $2 billion market can drive business in Pennsylvania.

"3D printing is one of those unstoppable forms of innovation that is already and will continue to transform manufacturing and a lot of other industries,” says Michael Antonucci, an Alliance managing partner. 

Additive manufacturing technology, 3D printing’s formal moniker, "is most commonly used for designing physical models, prototypes, patterns, tooling components, and production parts in plastics, metal, ceramics, glass or other composite materials," says Tom Palisen of the state's Department of Community and Economic Development.  It is used in industries including consumer products and electronics, automotive, medical and dental devices, aerospace and military markets. Emerging industries include the oil and gas sector.   

"From a pure application standpoint, 3D Printing has had the most traction to date with development of prototypes, and that's been the main driver for many, many years," says Antonucci. "It's moved well beyond prototypes now and it's all about getting innovative new products to market quicker, with less reliance on outsourcing and offshoring."    

3D printing proponents believe that additional applications are virtually limitless, especially as early patents expire, leading to a proliferation and reduction in the price of equipment. It took 20 years for the 3D printing industry to reach $1 billion and an additional five years to reach $2 billion; it’s on track to reach $4 billion by 2015, reports Bob Fiori, also an Alliance managing partner. By 2017, the market set to reach $6 billion worldwide. 

The 3D Printing Alliance, based in Downingtown, was formed last year to support the 3D printing industry throughout the Mid-Atlantic. Its mission is to commercialize innovation and drive economic growth centered on 3D printing through membership, workshops, events and other services. 

Source: Michael Antonucci and Bob Fiori, the 3D Printing Alliance; Tom Palisen, DCED
Writer: Elise Vider

Lehigh Valley Angel Investors seek to support more startups

What do Carmell Therapeutics, developer of biomaterials manufactured from human blood plasma that contain a concentration of natural regenerative factors to promote healing; EggZack, a software-as-a-service solution that requires only a single entry to update a client’s website and other marketing functions; mdCurrent, a health and medical publisher serving practicing doctors in India; Orion Fleet Intelligence, which provides GPS-derived business intelligence software and services to companies with fleet operations; and Cerora, a brain biosensor information company developing accessible neuro-diagnostic information for brain health assessment, all have in common?

They are all Lehigh Valley startups that got an early boost from the Lehigh Valley Angel Investors network (LVAI). Now LVAI is seeking new partners to expand its portfolio and allow for greater investment in the region.

LVAI was founded in 2010 by Todd Welch of Charter Partners, Stu Schooley, founder and co-owner of Dutch Springs, and about a dozen other successful entrepreneurs.

"All of us are entrepreneurs and we all built our companies from the ground up," says Schooley, president of LVAI. "Now, we are interested in supporting like-minded people. Somewhere along the way, someone helped us and we want to return the favor."
Schooley said that the network’s goal is to grow from the current 21 members to a group of about 35 to 40 investors. Prospective investors should contact Schooley by email or by calling 610-759-2270. 

LVAI is associated with the Ben Franklin Technology Partners of Northeastern Pennsylvania as an affiliate member of the Ben Franklin TechVentures business incubator/post-incubator at Lehigh University

Source: Stuart Schooley, Lehigh Valley Angel Investors
Writer: Elise Vider 

BFTP/SEP issues request for proposals to commercialize alternative and clean energy technologies

Ben Franklin Technology Partners of Southeastern Pennsylvania (BFTP/SEP) is inviting companies developing solar, wind, geothermal or hydro power, advanced uses for natural gas resources, novel energy storage technologies and technologies related to energy conservation or transportation to apply to its Alternative Energy Development Program (AEDP). 

AEDP offers loans between $50,000 to $750,000. The program is intended to accelerate the development and commercialization of promising clean and alternative energy technologies. BFTP/SEP says it will consider proposals for technologies that have demonstrated impact for energy generation, conservation and/or distribution.

To be eligible, companies must have fewer than 250 employees and be located in -- or willing to relocate to -- Bucks, Chester, Delaware, Montgomery or Philadelphia counties. Technologies employed in the proposals can range from early-stage to commercialization ready. 

Under the terms of BFTP/SEP’s request for proposals, a five-to-one cash match is required for $50,000 loans; loans greater than $50,000 require a one-to-one company match.
An email notice of intent to apply is due by 5 p.m. on June 23; completed proposals must be submitted by 5 p.m. on July 7.

Source: BFTP/SEP
Writer: Elise Vider

Software test puts Greenville medical team into Kenyan operating room

A young Kenyan woman is fast regaining use of her hands after a groundbreaking surgery performed by two teams of surgeons: one in the operating room in Kenya, the other in a small town in western Pennsylvania.

The successful surgery, completed in April, was the first long-distance test of Distance Expert Surgical software, developed at Greenville Neuromodulation Center (GNC), a nonprofit organization whose mission is, in part, to advance Deep Brain Stimulation (DBS) through research, education and clinical care. 

DBS is a highly effective treatment for a wide range of neurological and psychiatric disorders, says Dr. Erwin B. Montgomery, Jr., GNC’s medical director. But only about 150 sites in the U.S. offer the surgery, and it's incredibly rare in the developing world.

The 25-year-old Kenyan patient had suffered for 17 years with severe chorea; this resulted in significant self-injury due to excessive, involuntary movement of her hands. The software gave Montgomery (who developed it with GNC colleague He Huang) the data critical for precision placement -- within one millimeter -- of a micro-electrode deep in the patient’s brain, all in real time from thousands of miles away.

GNC has licensed the technology to FHC Inc. and Greenville Modulation Services, its wholly owned subsidiary. Montgomery expects the software to be commercialized within months.  

Distance Expert Surgical is part of a suite of products that GNC is working on. Distance Expert Medical is designed to facilitate the management of complex diseases by health care professionals and non-expert physicians -- a secure database allows specialized practitioners to analyze patient information and make recommendations to treating physicians. GNC has completed a prototype for treatment of Parkinson’s disease. 

Meanwhile, Distance Expert Compiler is an under-development tool that would allow any medical center or hospital to create its own system for specific medical needs. And Distance Expert Fellowship is a training and education platform for doctors and medical personnel, a way for experts to "look over their shoulders in the operating room," explains Montgomery.

None of these are tele-medicine in the traditional sense, he emphasizes. Instead, GNC’s tools make highly specialized medical expertise available to treating physicians around the globe, especially for rare treatments such as DBS. Only about 100,000 DBS procedures have been performed worldwide, says Montgomery, "and a lot more than that are needed."

Source: Dr. Erwin B. Montgomery, Jr., Greenville Neuromodulation Center 
Writer: Elise Vider

State College's LignoLink wins federal dollars to develop improved feedstock

LignoLink, a State College startup and Penn State spinoff, has won a $750,000 Phase II Small Business Innovation Grant from the National Science Foundation. It’s a big step on the road to developing the company’s patented technology for the genetic modification of crops to enhance digestibility for biofuels feedstock and livestock forages.

Penn State professors Ming Tien and John Carlson invented the technology and formed LignoLink in 2011. Scott Welsh, the company’s director of business development, explains the technology like this: "We are developing a method for transforming crops so that they are easier to process into biofuels and are more digestible as animal feed. This technology will reduce the cost of bio-based products and fuels by making processing more efficient, and can improve feed efficiency for livestock."

The company name comes from "lignin," a critical component of plant cell walls. But lignin is hard for animals to digest and is an impediment to producing cellulosic-based biofuels. LignoLink’s process addresses those problems by changing the lignin structure so that it can be more easily broken apart. 

The technology has been demonstrated in corn and poplar, says Welsh; getting commercial seed in the market is at least five years away. When that day comes, he adds, agricultural seed companies will be the primary market. 

Besides the new SBIR grant, LignoLink received early funding from Ben Franklin Technology Partners of Central and Northern PA. The company currently has three full-time and three part-time employees, and plans to add another full-timer in the next six months. 

Source: Scott Welsh, LignoLink
Writer: Elise Vider

Pennsylvania SBDC reports 2013 results amid a challenging funding environment

Nearly 11,000 aspiring entrepreneurs and small business owners benefitted from free, confidential business management advice provided by Pennsylvania’s 18 Small Business Development Centers in 2013, and SBDC can point to an array of success stories and positive results.

But, in releasing its 2013 annual report, SBDC also makes clear that with an 8 percent drop in federal funds due to sequestration, its capacity is diminished.

Altogether, the centers advised 10,966 entrepreneurs and businesses in 2013, providing nearly 110,000 hours of consulting. Most participants were very small ventures, with fewer than six employees, and most requested help with developing a business plan. More than half -- 55 percent -- were operating in the service industry. Many were women-, minority- or veteran-owned. 

SBDC reports that the number of advisees fell by about 1,000 from 2012. The number of educational programs and attendees fell, too.

"Automatic, across-the-board spending cuts to federal funding took a toll on our program last year…directly impacting services to Pennsylvania’s small business owner," said PA SBDC State Director Christian Conroy in a statement. 

Still, client-obtained financing grew to more than $138 million and client government contacts rose to more than $305 million. 

Success stories included the Gannon University SBDC, which helped McKean Veterinary Hospital in Edinboro raise $960,000 to expand operations. The Bucknell University SBDC helped the father-daughter founders of Upper Desk in Hughesville with patent and market research for their product. And in Philadelphia, the Widener University SBDC helped the AAA School of Trucking navigate the federal procurement data system and find new opportunities.

SBDC says it is seeking "stable federal funding" for the 2015 fiscal year in order to "best serve entrepreneurs and small businesses in Pennsylvania and nationwide."

Source: Kelly Cofrancisco, SBDC
Writer: Elise Vider

Penn State life science researchers now eligible for QED proof-of-concept funding

Philadelphia's University City Science Center’s successful QED proof-of-concept program has an important new academic partner: Penn State University has expanded its involvement from the Medical College at Hershey to include its main campus at University Park, opening the seventh round of QED funding to hundreds of life science researchers. 

"Penn State Main Campus’ participation in QED signals growing interest in cross-disciplinary collaborations in technology commercialization across Pennsylvania," says Science Center President and CEO Stephen S. Tang. "Innovative minds and the discoveries they will make contribute to our region’s future as a technology hub and innovation center."

In May, the Science Center issued its latest RFP for technologies ripe for commercialization to 21 participating institutions in Pennsylvania, New Jersey and Delaware. Over the next seven months, QED will offer advisory support and the chance for direct project funding to researchers from the participating institutions as they position their technologies for product development and private investment. After the QED Selection Team makes an initial cut, approximately 10 researchers will be paired with business advisors and work to develop business plans to commercialize their technologies. Ultimately, four projects will be selected to receive up to $200,000 each in funding. 

"Faculty in the College of Medicine participated in last year’s QED Program with some success," says Neil Sharkey, Penn State’s Interim Vice President for Research. "Four teams were selected as finalists in the competition, one of which garnered an award. We are hoping for the same level of enthusiasm from Penn State bioscience faculty located at University Park."

QED describes itself as "the first multi-institutional, proof-of-concept program for the life sciences and health IT [bringing] together academic invention, market insight and commercial guidance." To date, five projects funded by QED have been licensed and gone on to raise additional funds. One, a portable low-cost radiation-free breast cancer detector invented by Drexel University Professor Wan Y. Shih, was funded by QED in 2009 and licensed to UE LifeSciences, a growth-stage company in Philadelphia. 

QED continues to attract additional funding based on its track record of successful commercialization outcomes. This year, the program received a $300,000 award from the Pennsylvania Department of Health to help fund Pennsylvania-based awardees.

Source: University City Science Center
Writer: Elise Vider

Hot in Pittsburgh: 2013 was a watershed year for economic development

Pittsburgh’s economic development community is reporting numbers from 2013 that reflect a watershed year, with strong growth, increased investment and a robust entrepreneurial climate.

In its annual report, Innovation Works (IW) announces that it assisted 188 companies and invested $6 million in the region. A record 37 new companies received first-time investment from IW through its seed fund and accelerator programs, making IW the seventh most active seed investor in the U.S. in 2013.

"There is a general sense of momentum in our region’s startup community," says IW President and CEO Rich Lunak. "Whether it's the increased level of spinouts from our universities or the growing number of grassroots organizations, co-working spaces, hackathons and other day-to-day events -- Pittsburgh's startup community is energized. Entrepreneurs are launching new products, receiving national recognition, gaining customer traction and expanding into larger offices to support greater levels of revenue and jobs."
And, he adds, 2014 is off to a strong start: "Pittsburgh's first quarter venture investment totals were the highest of any quarter in five years and that bodes well for future growth."

Lunak attributes the success to the fact that "Pittsburgh’s startup community is characterized by multiple areas of technical strength. The region has a highly educated workforce that feeds our diverse startup community in areas that range from computer science and biotechnology to electronics, energy and advanced materials. One broad area where we have a clear advantage over any other region in the country is the merge point where hardware and software meet, whether that's sensors, robotics, 3-D printing and customization, mobile apps for connected devices -- these are all examples of growing technology trends and unique strengths of Pittsburgh."
In a separate development, Site Selection magazine named the Pittsburgh Regional Alliance (PRA)  one of the U.S.'s top 10 economic development organizations for 2013 -- the only such group in the Northeast -- based on the group's 2013 performance.

Source: Rich Lunak, Innovation Works and Pittsburgh Regional Alliance
Writer: Elise Vider

Blackstone LaunchPad Philadelphia boosts student entrepreneurship

Student entrepreneurs on two Philadelphia campuses have a major new resource thanks to the Blackstone LaunchPad Philadelphia, a new partnership between Philadelphia UniversityTemple University and the University City Science Center. The LaunchPad centers offer mentoring, coaching and other innovative co-curricular support for student entrepreneurs. 

The program, developed by the University of Miami, has grown to include 14 campuses in six regions, bringing a total of 350,000 students into its network. The goal is to help students view entrepreneurship as a mainstream career path and drive regional economic development.

According to Zoe Selzer McKinley, executive director of the Blackstone LaunchPad at Philadelphia University, the 3,600-student school is the smallest in the Blackstone network. But what it lacks in size, it more than makes up for in entrepreneurial gusto. 

"Philadelphia University's approach to education is collaborative, multidisciplinary and engaged in the real world, making it an ideal platform for entrepreneurship," says McKinley. "The Blackstone LaunchPad builds on [the school's] unique approach to innovation education by providing our students a coaching program tailored to their entrepreneurial needs."

The center had its official ribbon cutting this month, but has been operational since February. Among the student projects already in the pipeline are an online magazine (crowdfunding is being used to support a print version), a surf and snowboard company, a baseball equipment concern, fashion-related businesses and Milkcrate, an app for sustainable urban living that will launch in August. 

The Blackstone LaunchPad at Temple University is housed on the first floor of the Howard Gittis Student Center and run by Executive Director Jaine Lucas and Director Marilyn Barry.

As the regional partner for Blackstone LaunchPad Philadelphia, the Science Center supports the programs at both Philadelphia University and Temple, and will develop and manage a Venture Coaching Network open to LaunchPad students. The Science Center is also identifying ways to support student entrepreneurship in the Greater Philadelphia region's broader collegiate ecosystem.

Source: Zoe Selzer McKinley, Blackstone LaunchPad at Philadelphia University, and the University City Science Center
Writer: Elise Vider

Shale innovators win funding and exposure in third annual Innovation Contest

Four companies will share a $100,000 purse to develop their innovative, shale-related product or service as winners of the 3rd Annual Shale Gas Innovation Contest, sponsored by the Shale Gas Innovation & Commercialization Center (SGICC),  a Ben Franklin Technology Partners-supported center. 

One winner, KCF Technologies, Inc. of State College, has developed a low-cost, low-power sensor used for wireless monitoring of rotating equipment, also known as condition-based maintenance. Current customers include the pulp and paper industry and the building maintenance sector. As reported last year in Keystone Edge, KCF is diversifying into the oil and gas industry, and with the support of an SGICC seed grant, is conducting a demonstration project to prove the value of its technology to this new market segment.

OPTIMUM Pumping Technology in Morgan was named a winner for its high-performance manifolds -- they reciprocate natural gas compressors, eliminating pulsation control bottles and their vibration-related failures, significantly improving compressor reliability and operating efficiency. TM Industrial Supply of Erie won thanks to its technology that filters contaminants from the natural extraction process.

A fourth company, NG Innovations, Inc. of West Virginia, was also named a winner. 

Opportunity abounds, but bringing shale-related products and services to market can be daunting, says SGICC Director Bill Hall.

"Until you’ve been in the trenches, so to speak, it’s hard to explain how challenging it is to advance an idea all the way to commercial success," he explains. "SGICC’s job is to sort through the dozens and dozens of promising ideas, and identify the ones that we can impact by shining a light on them using a small amount of seed funding, and then helping them vet their concept with potential end users.”

The contest brings value, he adds, not only for the dollars but also for the wide industry exposure. He cites REV LNG of Ulysses, one of last year's winners and a supplier of "on demand" liquid natural gas. CEO David Kailbourne says the win was instrumental in propelling recent company growth.

"Our process is making a difference for the next generation of shale energy innovators," says Hall. "Our partnership with many of the leading shale energy companies helps expose these ideas to the right audience, and fast track the best ones to a successful commercial launch."

Source: Bill Hall, SGICC
Writer: Elise Vider

BFTP/SEP invests $975,000 in nine startups

Startups working on social gaming, a meal-planning app, a sports video publishing platform and medical technology and devices are among nine early-stage regional companies approved for a total investment of $975,000 from Ben Franklin Technology Partners of Southeastern Pennsylvania (BFTP/SEP) 

BioDetego, LLC of Philadelphia will receive $50,000 to further develop VASPfore, a new biomarker test for selecting cancer treatment protocols. BioDetego predicts that the VASPfore will save millions of dollars a year by reducing total treatment costs.

Essential Medical in Chester County has been awarded $75,000 (Ben Franklin previously invested $500,000) to develop X-SealTM and MANTATM, two innovative vascular closure devices. These devices are used to close incisions in the leg artery after cardiac catheterizations.
Fitly, Inc. of Philadelphia will receive $50,000. The company's web app allows customers to personalize weekly meal plans featuring healthy recipes in less than five minutes; the necessary ingredients and cooking instructions are then delivered to the diner's door. 
Grand Round Table of Philadelphia has been awarded $50,000. GRT has developed an innovative clinical decision support tool integrated into the electronic health record. GRT helps hospitals and clinics save time and money by directing doctors to appropriate solutions faster, reducing the number of unnecessary tests, ineffective treatments and consultations that patients receive.

HealthQx in Montgomery County will receive $250,000 (Ben Franklin previously invested $150,000). This healthcare technology company delivers a big-data driven SaaS solution to healthcare payers, providers and partners on the leading edge of the shift from fee-for-service to transparent, value-based healthcare payment.

MemVu in Bucks County has been awarded $50,000. This social gaming company delivers an innovative and engaging brain fitness gaming platform that facilitates the involvement of families and caregivers in the care, socialization and stimulation of loved ones suffering from a brain health condition such as Alzheimer’s.
NETMINDER in Montgomery County will use its $150,000 to increase the sustainable efficacy of saltwater nets, traps and related equipment -- their products dramatically decrease underwater fouling by using nontoxic coatings. 
SideCar in Philadelphia has been awarded $100,000 (Ben Franklin previously invested $385,000). The company is positioning itself as a name-brand powerhouse in the world of big data marketing solutions by combining paid search, comparison shopping, on-site personalization and personalized email.
SilverLine Global in Philadelphia will receive $200,000. A digital video publishing platform for the endurance sports industry, the company enables endurance sports events to leverage digital video directly on their websites and social media. 

Source: BFTP/SEP
Writer: Elise Vider

A father-daughter team spearheads Kempton's Tree Armor

In 1992, when Jill Saunders was a year old, her family planted 20 sycamores and maples on their Kempton farm. Since then, only one of those trees has survived the year-round damage done by deer.
Jill and her father, Jim, tried wrapping their trees with a variety of tree guards -- "glorified ace bandages," recalls Jill. Eventually, the pair decided to design a better tree guard.
Their invention, Tree Armor, is a coiled PVC plastic engineered to unwind around any size trunk. The product is brown and almost invisible from a short distance. It is reusable, perforated to prevent mold and mildew, and certified to be free of heavy metals and other toxins that can leach into the ground, a critical factor for orchard farmers and food growers.
And the product is now made in America, a special point of pride for the Saunders family.

"Dad and I took our prototypes to 12 different extruders in Pennsylvania, New Jersey, Connecticut and Delaware," says Jill. "Some wouldn't even bid on making samples. Others couldn't give us a price that we could sell at. We were frustrated when we sent the prototypes to China. The Chinese were glad to make our initial order -- the price was right and the quality was pretty good. The second order came back at a higher cost and the quality wasn't nearly as good. That last order made us more determined to find an American manufacturer."
A sales call to Lehigh University resulted in an introduction to Lehigh’s Small Business Development Center; they connected Tree Armor with GSH Industries in Ohio, who began manufacturing the product in November.
That third run of 30,000 pieces is selling well over the Internet, and Tree Armor hopes to move into big-box retail. Meanwhile, the Saunders have invented a new product, Tree Armor Plus, a tree guard impregnated with a scent that repels deer, rabbits and rodents. 
Source: Jill Saunders, Tree Armor
Writer: Elise Vider

Penn State student entrepreneurs earn scholarship support

Coffee, tea, beer, spirits -- how do makers of craft beverages like these measure and quantify flavor in a consistent, even standardized, way? 

Analytical Flavor Systems aims to solve that problem with Gastrograph, a tech-based flavor analysis system for artisan products.

Jason Cohen founded the company in 2012 as an outgrowth of his undergraduate research at Penn State. Now co-founder and frontend developer John Dori, a junior at Penn State's College of Information Sciences and Technology (IST), has been awarded the David Rusenko Entrepreneur-in-Residence Scholarship, which carries a $10,000 stipend, along with support from a faculty mentor and the opportunity to earn six credits while working on the startup.

Gastrograph is based on Cohen's research "and thousands of Gastrograph reviews done in pen and paper and manually entered into a database in order to help producers of artisan coffee, beer and spirits understand their products' flavor profiles and make a more consistent product," explains Dori.

The company currently has nine employees (including Ted Papaioannou, the other co-founder) who live and work together in State College, and four customers: Otto's Brewery, Robin Hood Brewery, DJ Coffee and Perfect Coffee.

"We've begun development on two sensors that will be used inside of coffee roasters and beer tanks as the products are made," says Dori. "[This provides] the producer with as much data about their product as possible."

The startup is also planning to release an iOS version of its Gastrograph Review app by September.

Meanwhile, IST sophomore Jules Dupont received the Rusenko Emerging Entrepreneur Scholarship for his startup, Mobile Library Apps, a product that provides mobile access to library catalogs. 

Rusenko, a 2007 IST alumnus and co-founder of Weebly, a San Francisco-based web hosting service, donated $400,000 in 2012 to establish the scholarships.

For more on how PA colleges and universities are fostering entrepreneurship, check out this week's lead feature.

Source: John Dori, Analytical Flavor Systems; Jules Dupont, Mobile Library Apps and IST
Writer: Elise Vider

Robotics and technology keep Hatfield's Rodon Group 'cheaper than China'

At a time when many American manufacturers were busily outsourcing to China, Hatfield's Rodon Group -- and its sister company, K’NEX Brands -- doubled down on domestic production. Their multi-million dollar investment in new presses, robotics and advanced computer mold-making equipment has translated into robust growth and a proud claim of being "cheaper than China."

Rodon was founded in 1956. Today it is a third-generation family plastic injection molder that manufactures billions (with a "B") of small plastic parts every year -- everything from hose washers to push pins to all manner of connectors, brackets and fasteners. About 25 percent of its output is parts for K'NEX, the toy company founded in 1992 by Joel Glickman, Rodon's then-chairman. 

Today Glickman's son-in-law, Michael Araten, is CEO of both companies; each employ about 100 people and operate out of two 125,000-square-foot plants, about a mile apart.

Rodon's prices are competitive with foreign-made products, says Araten, in part because of the company's vertical integration. The company designs its products at no charge, fabricates its own molds at considerable savings to the customer and has heavily automated its manufacturing.

"By doing all that in one place, we have efficiency and economy of scale," he explains.

In addition, their heavy investment in technology, especially in robotics over the last five to seven years, enables 24/7 production and also helps negate China's cheap labor advantage. 

With 19 percent average annual growth since 2009, Rodon is continuing to add capacity. Thanks to an imminent $2 million investment, the company is adding more plastic injection molding presses (to its current 105), new robots and other upgrades. Rodon is also pondering a physical expansion into a separate warehousing and distribution facility. Araten projects that the combined workforce will grow 5 to 10 percent by 2016.

According to Araten, expanding markets supporting the growth include construction (think plumbing parts and hardware), food and beverage (bottle caps), and apparel (buttons and zipper pulls).

Source: Michael Araten, The Rodon Group and K’NEX Brands
Writer: Elise Vider
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