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Gelest Pushes Ahead

Organometallics specialist finds its niche just below the radar of much larger competitors

by Marc S. Reisch
January 18, 2010 | A version of this story appeared in Volume 88, Issue 3

Credit: Gelest
A worker unloads a silane reducing agent for use in pharmaceutical synthesis.
Credit: Gelest
A worker unloads a silane reducing agent for use in pharmaceutical synthesis.

Gelest, a specialist in organosilicones and metal organics, has a knack for survival. A plucky maker of custom chemicals with 100 employees and annual sales in the double-digit millions, it has found a niche supplying high-value intermediates in quantities that barely register on the radar of multi-billion-dollar competitors such as Dow Corning, Momentive Performance Materials, and Wacker Chemie.

Silicon-based materials make up about 85% of sales and have been the primary engine of Gelest's growth in recent years. But metal organic derivatives, used in electronic applications, are now on the rise at the management-owned firm.

Earlier this month, Gelest arranged to sell high-purity germane (GeH4) for electronics and solar-cell applications exclusively through Matheson Tri-Gas, the U.S. subsidiary of Japanese industrial gas major Taiyo Nippon Sanso. The deal, says Joel Zazyczny, Gelest's business manager for silanes and metal organics, also includes plans for a joint manufacturing operation.

Germane is a colorless gas used to make photovoltaic reflective coatings, diodes, and semiconductors that are more efficient than their silicon-based cousins. The partners also plan to develop other germanium-based molecules for electronics industry customers through a joint research effort, Zazyczny says.

However, Gelest is not ignoring silicon-based materials at its current site, a 21-acre complex in Morrisville, Pa. The firm recently commissioned new equipment to modify substrates for cosmetics and industrial fillers in an 8,000-sq-ft stand-alone manufacturing suite. The suite was added two years ago as part of a project that doubled capacity with new reactors.

A large part of the recently commissioned equipment will provide products and services for personal care industry customers, allowing Gelest, for instance, to supply silane-treated pigments for skin care formulations. The firm hopes to expand its business with cosmetic industry customers, explains Matt Edison, manager of silicones and performance products.

As important as silicon-based materials are to Gelest today, it started in 1991 as a maker of metal organic compounds, mostly for electronics makers. Barry Arkles, the firm's president, notes that the name Gelest is made up of the first two letters of germanium, lead, and stannate.

Arkles has a Ph.D. in biochemistry from Temple University and holds about 65 patents, most covering silicones, silanes, and metal organic materials. Earlier in his career, Arkles owned a silicones catalog company called Petrarch Systems. He sold it in 1985 to a predecessor of the German firm Hüls and became a H¨ls vice president. But he missed the day-to-day customer interaction and intimacy with technology that he had at a smaller firm, he says, and decided to leave HÜls together with Kevin King, now Gelest's vice president of operations, to start Gelest.

Under the terms of his departure, Arkles had agreed to not compete with HÜls, now a part of Evonik Industries, until 1993. Gelest started making silicon compounds in 1994. The extra year was long enough, he says, so that "there could be no hard feelings about our return to silicones." The firm built a significant business supplying pharmaceutical intermediates, custom silica, silanes for chemical separation and diagnostic markets, and silicon-based materials for optics applications.

Production of Roche's flu treatment Tamiflu uses Gelest intermediates. Microarrays from life sciences firm Affymetrix contain Gelest's silanes to complex DNA for gene identification. Some contact lens makers use Gelest's reactive monomers and silicone macromers as starting materials.

Although Gelest has had its share of successes, it has experienced setbacks, too. An explosion and fire destroyed the firm's first location, in Tullytown, Pa., in 2001.

Fortunately, the company was already planning the Morrisville site and was able to start building it in 2002. Silicones manager Edison, a mechanical engineer, was hired to help design the manufacturing facility and warehouse. The buildings boast 14-inch-thick concrete walls at critical locations and a ventilation system that keeps air hazards at bay. To date, the firm has invested about $25 million in the Morrisville site.

Silicon specialists like Gelest are "good at capturing high-value, low-volume business," notes Ray Will, a senior consultant at business research publisher SRI Consulting. Big firms typically have more resources they can put into developing highly sophisticated products. But the smaller silicone specialists, such as Carpinteria, Calif.-based NuSil Technology and Bristol, Pa.-based United Chemical Technologies, often do very well with their customized approaches, Will says.

What Gelest also has going for it is a well-known catalog containing about 3,000 compounds, most of which are stored at the Morrisville site. Arkles says the catalog helps customers open discussions with Gerald Larson, vice president of research and a former Petrarch employee, and his 20-member research staff.

Researchers can then tweak catalog molecules for customers' specific needs and custom-make small quantities. For bigger volumes, the Morrisville plant can generate quantities from 20 to 80 tons, depending on the product. "Above that, customers would want to contract with larger manufacturers," Edison says.

"For us here, the excitement is getting involved in the nitty-gritty," Arkles says. "We are unapologetic chemists."



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