CMS to build new lab to prep for commercial products
© 2023 Delaware Business Times
NEWPORT — With eyes on bringing three pilot manufacturing systems online next year, Compact Membrane Systems (CMS) is moving to a larger lab space and growing its workforce with the assistance of a state grant.
Founded three decades ago by former DuPont employee Stuart Nemser, CMS develops membranes that are used in the petrochemical industry for preventative maintenance. But in the last decade, the company has also pivoted to reducing greenhouse emissions by coding membranes to separate gas products for reuse.
CMS is looking to finalize pilot demonstrations within the next 18 months and bring a product to market potentially as early as 2026. But in order to do that, CMS Special Projects Director Charlie Swartz said the company would need to move out of its space on Water Street in Newport and into a 15,000-square-foot warehouse converted into an applied lab and manufacturing space.
Renovations and building three wet labs would cost $3.1 million, according to the Delaware Prosperity Partnership.
“All 15,000 square feet will be utilized in this new location. Eventually, we’ll have three wet labs for us to test various product lines, new materials and to build out a robust pilot or a new manufacturing line to coat our products,” Swartz told the state’s jobs investment board, the Council on Development Finance (CDF), on Monday morning. “It fits perfectly within what we’re trying to do over the next three years, and then there’s an opportunity to expand further.”
Right now, CMS has 28 employees and plans on hiring another 38 full-time staff members in the next three years. Swartz projected that by 2025, with another fundraising round from investors, it would get the company to 50 employees.
To support additional hiring and its new lab space, the CDF approved on Monday a total grant of $875,480, breaking down to $115,000 for job creation and $760,480 for the graduate lab space construction.
CMS first started in 1993 for the industrial sector, but recently turned to carbon capture for more commercial practices. Membranes, like the company’s patented Optiperm, work to separate nitrogen from carbon dioxide, allowing the harmless gas to pass through emission stacks while sequestering the harmful greenhouse gas. When carbon dioxide hits 90% to 95% purity, it’s hard to reuse, but at lower concentrations like 8%to 12%, it is safer for the environment or can be used in chemical and thermal processes.
“As we’re looking to abate carbon emissions, a large portion of industries like cement, steel, and the petrochemical industry that account for roughly 40% of global total emissions, membranes can play a part in a pathway to abate that,” Swartz said.
CSM has 26 patents issued, and has signed joint development agreements with Chevron and Braskem as well as cement and steel manufacturers in the United States and Europe. There are roughly four other companies internationally working on similar membranes. Other post-combustion carbon capture companies are on the market, but the most widely utilized method right now involves chemicals called amines.
“They’re just so mature that the industry has looked at that to start the momentum. Membranes are the next generation and they provide a lot of operational and community benefits,” Swartz added.
In the past, CMS has used federal grants to support its research and development, but as the company looks to tap into the commercial market, it raised $16.5 million in a Series A fundraising round. The company has $2 million in recurring revenue right now, which Swartz said was not enough to pay for a large pilot program to demonstrate to potential customers what their membranes can do.
“It does depend on how we perform in our pilots, and in Europe there’s a path to profitability once we’re starting to manufacture at scale,” he said. “We can’t deliver a commercial system with the manufacturing capabilities right now. People aren’t going to go from a small land-based model to a $15 million commercial system. We have to scale it, provide our technology and then invest in the more traditional sales force to knock on doors.”
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