Former Plextronics CEO and president Andy Hannah said the story of his previous company — which filed for bankruptcy earlier this year and was sold in March — is a successful one.
Plextronics was sold for $32.6 million to Solvay, a Belgian Chemical company that has pledged to keep development of its products in southwestern Pennsylvania. The firm turned Plextronics into an incubator under the Solvay OLED name, renewing the lease at the University of Pittsburgh’s Applied Research Center in Harmar, said Bill Chen, general manager of Solvay OLED.
The company had about 70 employees when Plextronics filed for bankruptcy. Mr. Chen could not provide an exact figure for current employment numbers but said it is in the process of expanding its workforce in the area.
A Carnegie Mellon spinout, Plextronics was the brainchild of former CMU professor Richard McCollough, built out of his research on conductive inks. The company used that research to help develop a more efficient way to produce solar panels and organic light emitting diode screens. OLED screens are used for televisions, computers, mobile devices and even watches.
The technology was still a few years away from large scale development when Plextronics ran into funding issues, forcing its sale.
“To take something that was made in a very small quantity, that had features that were not quite ready to be put into a product, to a point where household names are using our products to develop next-generation electronics, that to me is success,” Mr. Hannah said.
That doesn‘t mean he wouldn’t like to see more progress. “Could it be a much bigger success? Yeah, and we’ll see through Solvay. Could it have been on its own? I don’t know. It’s hard to grow a chemistry company from zero to large scale. We took it to where we could. Now it’s in Solvay’s hands.”
The goal is to take the technology developed in Western Pennsylvania and use it to produce next generation OLED televisions, which offer energy savings over current high-definition models and provide better picture quality.
OLEDs are more energy efficient than the ever-popular liquid crystal displays because they do not require a backlight. The least expensive of those TV models currently cost between $4,000 and $5,000, but Mr. Chen and Mr. Hannah hope the technology developed by Plextronics and acquired by Solvay OLED can reduce those costs in the next few years.
Though most electronics giants reside elsewhere — LG and Samsung in South Korea, Sony, Hitachi and Panasonic in Japan — Solvay decided to keep much of its OLED development in Pittsburgh.
“They built a great team and great technology, and those technologies are deeply connected to the local community, the local university and academia,” Mr. Chen said. “They are a part of Pittsburgh.
“Of course, we would like to continue to build on this capability, and in combination with Solvay’s capability, bring this technology to the global market. We have to have a route, and the route is here.”
Mr. Hannah, who is working with Solvay as a consultant during the first few months of transition, said Plextronics was ultimately faced with the same choice when it launched operations in 2002.
“When you start a company, you want to build it where you think it has the best chance at success,” he said.
“We could have moved the company anywhere once it was spun out of the university, and we just decided there was a richness in Pittsburgh in terms of a chemistry and material science background. It offered a great opportunity to hire people, and that new technologies would be developed.”
Solvay has three U.S. hubs — Houston, Atlanta and New Jersey — but has had limited experience working in Pittsburgh. The company generated $13.7 billion in revenue in 2013. About 20 percent of its revenue was generated in the United States, 6 percent in the technology field.
The company also opened an OLED electronics laboratory in Seoul City, South Korea, after acquiring Plextronics.
It had started working with Plextronics in 2006, when the small firm was looking to partner with companies that better understood how to increase the scale of a chemicals and material sciences operation and reach the world market. Solvay became Plextronics’ first corporate investor the following year.
Michael Sanserino: firstname.lastname@example.org, 412-263-1969 and Twitter @msanserino.