COVID-19 Drives Growth of NC Medical Supply Chain Companies
COVID-19 has changed the business landscape markedly over the past year-and-a-half. Companies both large and small have been forced to adjust to an uncertain economy, dwindling raw materials, supply challenges and dramatically different ways of working.
But it hasn’t been all bad. A number of North Carolina-based businesses linked to the biopharmaceutical supply chain have seen their fortunes improve – in some cases markedly – as demand for medical products and services has intensified. It’s a trend that promises to continue as the country shrugs off the most severe effects of the pandemic, but faces new challenges from the Delta variant and the unpredictable nature of COVID-19.
Included among those homegrown companies experiencing a coronavirus-driven bump in their businesses are Core Technology Molding Corporation – a minority-owned company in Greensboro – and RGEES, a cold-storage shipping company located just outside Asheville.
Core’s pharma business finds explosive growth
Custom plastics injection molding company Core Technology, created in 2006 by New Jersey transplant Geoff Foster, has seen its biotechnology and biopharma segment grow organically from 5% of its total business last year to a whopping 60% in 2021.
Core Technology supplies specially designed materials to a wide variety of customers in the medical device, automotive, aerospace, pharmaceutical, consumer goods, appliance and outdoor lawn equipment businesses. The company’s client base includes such big non-pharma names as Newell Rubbermaid, Husqvarna, BMW, Volvo & Mack Trucks, and HAECO (a supplier for Airbus). It delivers its products to 150 countries.
Foster, who is the company’s CEO and president, said the non-pharma segments of the business have continued to increase steadily. But demand for pharma products has exploded, primarily due to the demand for single-use vaccine assemblies and plunger rods. Vaccine production at Merck and the addition of Pfizer as a new client are the main drivers. His company currently is experiencing triple-digit growth, Foster said, and he expects the trend to continue next year.
Core Technology will produce 100 million plunger rods in 2022 and double that number to 200 million in 2023, he pointed out. The highly automated plant operates on a continuous seven-days-a-week schedule. Rapid growth will likely require an expansion of the company’s current manufacturing footprint at Greensboro’s Gateway Research Park, a joint partnership between North Carolina Agricultural and Technical State University and the University of North Carolina Greensboro. “We also are increasing our workforce from our current 30 employees,” he added.
Ironically, a global shortage of raw materials has helped juice Core Technology’s business. Companies that previously sourced products in India, China and other low-cost locations have come back home to the U.S. where there are fewer delays and production and product availability are more predictable.
“We get a lot of our raw materials from the United States, which has allowed us to meet our schedules and take market share from other companies,” Foster explained. “And we’re able to deliver product to our more-local customers in a couple of hours rather than a couple of weeks.”
15-year-old firm recognized for its achievements
Foster founded Core Technology 15 years ago with three employees and the engineering experience he’d gained at Corning Life Sciences, AMP Inc. and Tyco Electronics. A New Jersey native, he got his BS and MS degrees in applied engineering from NCA&T – where he also played football – and his MBA from Wake Forest University’s Babcock Graduate School of Business.
Foster met his wife, Tonya – a Greensboro native – in college. A registered nurse by training, she now manages all human resources activities for the company and also is safety and environmental coordinator.
The Triad Business Journal named Core Technology one of the Triad’s “Top Family Businesses” in 2018. Among its other accomplishments, the company has been recognized as Minority Supplier of the Year on several occasions and as Minority Small Business of the Year in 2015 by the Greensboro Chamber of Commerce.
“As a global supplier and entrepreneurial leader, Geoff along with his team is helping to shape the growth of North Carolina’s life sciences community while contributing to our regional efforts,” said Nancy Johnston, executive director of the North Carolina Biotechnology Center’s Piedmont Triad office.
“Geoff’s expertise, energy and strong commitment as a member of our Piedmont Triad Advisory Committee is valued as we work to advance economic growth opportunities.”
As dry ice dwindles, companies switch to RGEES
RGEES – based in the Buncombe County city of Arden, just south of Asheville – is experiencing a similar growth spurt. The company was created in 2009 by Harshul and Elena Gupta and Andreas and Nina Reinhardt.
It’s a local business with an international flair. Harshul and Elena met in college in the Ukraine. He moved to the U.S. from Kazakhstan and she’s originally from Russia. Andreas is a native of Germany and Nina has Korean roots. The two families met in the Asheville area where Harshul Gupta – an electrical engineer by training – had begun working for a Canton-based manufacturer and where Nina had grown up.
RGEES specializes in manufacturing Phase Change Material (PCM) packs and designing and assembling temperature-controlled shipping containers for life science customers. PCMs are capable of storing and releasing large amounts of thermal energy as they change from a solid to a liquid state. That process maintains the constant temperatures – from several hours to several days – required for shipping many biopharmaceutical and medical products.
COVID-19 creates opportunity for growth
The current pandemic has created a shortage of dry ice used to transport temperature-sensitive healthcare products, Harshul pointed out. So a number of pharma and clinical laboratory companies have shifted to REGEES’ phase change technology as a safe, reusable and environmentally friendly alternative.
RGEES provides PCM packs in the sizes required to transport everything from COVID tests to clinical trial samples, lab reagents, blood samples, vaccines and other pharmaceutical products, and even heart and kidney transplant kits. Companies including Labcorp and Quest Diagnostics rely on RGEES’ technology.
COVID-19-driven reliance on home testing and delivery – instead of medical facilities, pharmacies, or labs – also has significantly increased business, Harshul said. Revenues for the 12-employee company doubled last year and he anticipates another 30- to 40% jump in 2021.
RGEES’ Akuratemp unit custom designs validated parcel shipping containers that are integrated with PCM refrigerants for transporting biologics. That gives customers a turnkey shipping option. Gupta said the containers are a good fit for multi-use applications. And their insulation properties, in combination with PCM technology, provide excellent temperature control.
Akuratemp uses IoT (Internet of Things) imbedded sensors and software to monitor the temperatures of its shipping containers. The software also provides end-to-end supply chain traceability, from packaging to delivery.
The company focuses primarily on smaller parcel shippers in the U.S. but has exported to Europe and the Far East as well, according to Harshul.
He said he and his partners chose North Carolina as the base for their business because of the state’s well-established and fast-growing life sciences ecosystem. RGEES hopes to increase the number of its N.C.-based customers in the future.
“I have known and been following the owners of RGEES for a decade and am glad they are growing in this difficult pandemic business environment,” said Jonathan Snover, Ph.D., executive director of NCBiotech’s Western Office. “They are a testament to the need for entrepreneurs to be patient and nimble as they deploy a transformative product.”
The benefits of a strong supply chain
In addition to Core Technology and RGEES, North Carolina is home to dozens of other suppliers of products and services used by the health care and biopharmaceutical industry. Their presence is a real plus for the sector and the state.
“A significant strength of the biopharmaceutical industry in North Carolina is the tremendous array of businesses that exist to support it,” said Doug Edgeton, NCBiotech president and CEO. “We are indeed fortunate not only to have one of the largest and most diverse pharmaceutical and biotechnology hubs in the country, but also one of the strongest supply chains.
“The presence of both makes our state a magnet for companies that want to relocate or expand, as well as for new businesses just getting started,” he added. “We think we offer the ideal climate for both.”