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Government Grants Fund AlphaMicron’s Growth
Published 17.MAR.09
By Dan O'Brien
AlphaMicron
Inc. is a small company with big ideas that bring in big money – a good
chunk of which is taxpayer dollars mined by lobbyists from federal
earmarks and state grants.
The Kent-based company has patented
technology that its chief executive officer says no one else in the
world has – technology that has important military applications and
could pioneer energy efficiency in the consumer market.
The
company has drawn attention recently because AlphaMicron was a client
of The PMA Group, the lobby based in Arlington, Va., that authorities
raided late last year. Federal agents are looking into the possibility
of illegal campaign contributions from the firm to members of Congress,
particulary those with influence in Department of Defense
appropriations.
“There are some companies trying to do what
we’re doing, but they aren’t even in the same ballpark,” says
AlphaMicron’s chief executive officer, Bahman Taheri.
AlphaMicron
manufactures liquid crystal film that can be laminated onto curved
plastic, a process that has eluded all other research and development
specialists in the field, Taheri says. The company has applied its
technology to ski goggles and motorcycle helmets sold primarily in
Germany and Italy. AlphaMicron is also working with the U.S. Air Force
to develop helmet visors that can be controlled manually to cast a
variety of tints during flight operations so pilots can better read
digital displays.
And that’s where PMA lends its expertise,
Taheri says. AlphaMicron relied on the firm for what the CEO describes
as “business development,” that is, PMA advocated uses for the
company’s technology that could be applied to other areas of the
military. “They brought up the idea of using this technology for
flight-deck crews. We didn’t think of that,” he says.
Taheri
says he was connected to PMA through Michigan-based Gentex Corp.,
another PMA client that deals heavily in automotive applications. Since
2005, AlphaMicron has paid PMA $630,000 for its services. PMA is also
the largest single donor to U.S. Rep. Tim Ryan’s campaigns – at least
$54,000 – for the 2006 and 2008 election cycles.
Since 2005, the congressman has secured more than $5 million in federal earmarks for the company.
AlphaMicron
primarily employs scientists, not business experts, Taheri explains.
“When the company needs financial and tax advice, we use accountants.
When we need patent help, we hire lawyers. When we needed help with
business development, we called on PMA because they have the
connections in the military,” he says.
Taheri says the overall
objective is to cultivate and grow liquid crystal and other technology
in northeastern Ohio and help plug the “brain drain” that’s afflicted
this region the past three decades. “We’ve created high-paying jobs
that are not leaving the state,” he declares.
The company
employs about 40 whose salaries average $50,000 to $60,000 a year and
sales are “more than $4 million annually,” he reports. The majority of
those employed are physicists and chemists.
Taheri and two
others who taught at KSU’s Liquid Crystal Institute formed the company
in 1997. The challenge was that traditional liquid crystal companies
use flat, not curved, surfaces. And, adhesive and laminate companies
such as 3M Corp. couldn’t handle something as complex as liquid
crystals. “So, we had to create something new,” he explains.
Since
then, the firm has become an important asset to the city of Kent and to
the university’s effort to create a technology culture around the
campus and northeastern Ohio, says Gregory Wilson, KSU’s associate vice
president for economic development and strategic partnerships.
The
university formed a partnership with AlphaMicron and another company to
create Kent Centennial Park, a former bus garage under renovation to
provide new space for AlphaMicron. “They’re a very important anchor
tenant,” Wilson says. “We wanted to see them stay in the Kent area.”
Within
the next few weeks, AlphaMicron will relocate from the
10,000-square-foot building it occupies to 30,000 square-feet at Kent
Centennial Park. “It’s one of our most promising spinoff companies” and
contributes to enhancing northeastern Ohio’s emerging technology belt,
Wilson says.
The new building will include testing areas for
laser optics, two “clean rooms,” liquid crystal film production, a
chemical laboratory and product assembly. “The money is in the
technology and the film we produce,” Taheri says, while the most costly
operation is goggle or visor assembly.
None of this would have
been possible without government support, the CEO relates. During the
1950s, the technology that adapted liquid crystals for light display
was invented at Kent State University. However, the government saw
little reason to support the development of this then-fledgling
enterprise.
That was a huge mistake, Taheri states. “This
country never invested in it. The technology was invented here and it’s
now produced mainly overseas” in Japan and Korea, he laments. Today,
the industry commands $30 billion each year and is on track to reach
$100 billion in the coming years. “We just didn’t get it,” he remarks.
One person who does get it is Ryan, Taheri says. “He’s energetic, and he understands what we’re doing.”
Ryan
has sponsored earmarks in excess of $5 million since 2005 to enhance
research and development at AlphaMicron, records show. The most recent
monies were included in the $410 billion spending bill President Obama
signed March 11. The company received $1.6 million toward research and
development of liquid crystal eye protection for visors and goggles
that can deflect or absorb lasers. Another $951,500 was earmarked to
fund collaborative research with NASA that would apply liquid crystal
technology to commercial and residential windows and would make
buildings and houses more energy-efficient.
Taheri has made
sizeable donations to political campaigns over the years. According to
campaignmoney.com, Taheri has contributed $8,000 to Ryan’s campaigns
since 2005. He’s also made contributions to U.S. Sen. Sherrod Brown,
D-Ohio, and former U.S. Sen. Mike DeWine, R-Ohio, whom Brown defeated
in 2006. In all, the AlphaMicron executive has shelled out $93,900 in
various campaign contributions since 2005 – the bulk of which has gone
to support the Democratic National Committee.
AlphaMicron has
also secured research grants from the state. In 2008, the company
landed the single largest award from the Third Frontier program for $5
million toward research related to its commercial windows project. In
2006, the state delivered $350,000 related to research supporting
commercialization of its Digital Mirror TM, a liquid crystal-based
automotive dimming mirror.
Taheri says every proposal the
company submits is subject to tough scrutiny from others in the
scientific community. In the case of the $5 million Third Frontier
proposal, for example, Taheri had to justify his concept before a team
from the National Academy of Sciences before the project could be
cleared. “It’s not like the state is just dishing out money,” he says.
The technology allows a liquid crystal film laminated to windows to
tint when activated by solar energy.
Taheri, a physicist, says
the commercial window product has enormous potential in the market. “In
the United States, we use 100 quadrillion BTUs of energy a year. Our
homes use a total of three quadrillion a year.”
This
technology could significantly reduce consumption of energy for houses
and buildings, Taheri says. However, he’s hesitant to place a time
frame on when this technology will become a commercial reality.
And,
there’s some doubt whether companies such as AlphaMicron will see the
sort of federal earmarks it’s been accustomed to. President Obama has
proposed all future earmarks involving for-profit companies be open to
competitive bidding and scrutiny at public hearings.
“Right now,
I’d say we’re in a high-growth phase,” Taheri says. “Hopefully we’ll be
able to double revenues in the next three years.”
Copyright 2009 The Business Journal, Youngstown, Ohio.
 
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