Building a better lightbulb

When John Higgins decided to build a new lighting manufacturing facility and relocate his Houston-based company’s corporate headquarters, he was feted by economic development executives from all over the country who offered tax incentives and other financial perks. After receiving abatement offers from several cities, including its second choice of Bryan/College Station, NeuTex Advanced Energy Group Inc. will begin moving its overall corporate functions into its new home this summer, near Houston’s Bush Intercontinental Airport. The owner-financed, completely rehabbed building on Vickery Drive will also house the company’s newest division, NeuTex Lighting. In the process of moving all lighting manufacturing from China, the division is expected to create as many as 250 jobs over the next 18 to 24 months. The total number of incentives Higgins accepted for the project from Houston municipalities was zero. Founded as a logging company in 1986, NeuTex continues a major upward trend as it expands into new industries. Higgins believes, however, that the company should not rely on taxpayers to foster that growth. “I did not want to do this on the backs of the taxpayers,” said Higgins, president and CEO. “I always felt like if a business can’t make it without freebies, you shouldn’t be in business.” He learned that no-nonsense approach from his father — who served in the U.S. Air Force — and applies it to all areas of the company. NeuTex expanded from logging into land clearing and site work to construction to emergency restoration and, most recently, energy-efficient lighting. While the logging business was eventually sold, all the other divisions were combined into one entity, NeuTex Advanced Energy Group, in 2007. Higgins purchased a former MacGregor Medical building, which NeuTex is completely recycling, reusing as much of the 41,000-square-foot building’s interior and exterior as possible in its rehabilitation. That includes disassembling and reusing materials, such as insulation, studs, glass, wood doors, lighting, and even some sinks and toilets. Wood doors that are too damaged to be used as such are being made into shelving and desks. Instead of hauling what was originally estimated to be 119 30-yard containers of debris to the dump as part of the renovation, NeuTex will only fill 41 containers. And the building, which had been using 1,600 amps of power, is expected to become a 600-amp facility once rehab is complete. While the environmental bent comes from Higgins’ years in the construction business, NeuTex’s focus is quickly shifting to the energy-efficient lighting industry. About 75 percent of NeuTex’s revenue comes from commercial construction, and the rest from lighting, but Higgins expects that to shift to 10 percent construction and 90 percent lighting over the next year. As a result, NeuTex’s revenue is expected to jump to $30 million in 2012. That’s a far cry from Higgins’ first turn as an entrepreneur when, as a high school senior, he opened a stained-glass shop with a loan obtained from the U.S. Small Business Administration over the phone. But, since he was too young, he had to ask his father to sign for it. With the help of his mother, Higgins later expanded the Oak Ridge-area business to a second store in Old Town Spring. After his mother passed away, Higgins closed the shops to try his hand at corporate America. After about a year of working for a traditional corporation, Higgins knew he was an entrepreneur at heart. When a friend called to ask if he could remember the name of a logging company based in his old neighborhood, he told that friend he had been thinking of opening a logging service himself and would like to bid on the work. Using a former Coca-Cola truck he bought on the side of the road for $1,000, a pawn-shop chainsaw and some rented equipment, Higgins entered the logging business head-on. “The opportunity was there, and I jumped on it,” he said. “I knew I was a true entrepreneur, and true entrepreneurs find a way to make things happen.” It didn’t take long for Higgins to realize he knew enough about the logging business to handle other aspects of preconstruction work, such as site-clearing and concrete. After a subcontractor handling site-clearing on one of NeuTex’s logging jobs showed up a week late, Higgins knew he did not want to depend on other contractors. “It was my company’s name on the line, and I knew that when you were relying on someone else, they could make you look bad,” he said. “We wanted to be in control of our own reputation. I also knew that the only way to really make money without getting stuck in one place was to diversify.” So NeuTex began expanding into other aspects of the preconstruction business and then into commercial construction, with an emphasis on retail. the next step During a 2006 trip to the International Council of Shopping Centers convention in Las Vegas, Higgins met the executives of an environmentally friendly lighting manufacturing business and decided to invest in the company. Although that company encountered problems and Higgins lost his investment, his own light bulb went off. “Instead of just licking our wounds, we knew they had a good idea, and we wanted to run with it,” he said. “I knew the second I saw their product that they were going in the right direction — we just needed to take the next step.” So NeuTex became involved in the research and development phase of a new type of LED lighting. About a year and a half ago, the energy-efficient product was perfected and taken to market. Although the manufacturing was being done in China, Higgins began hatching a plan to bring it to the U.S. And next month, the first phase of the manufacturing process will move into the Houston facility, with complete ramp-up scheduled to take place by December. Among NeuTex’s lighting clients are Toyota Center, RBH Office LLC and Jordan Ranch in Schulenburg. In addition to commercial clients, NeuTex services the residential market and provides wind and solar lighting and marine lighting. Higgins said the company sells lighting products, solutions, installation and maintenance directly to the end-user, essentially eliminating the middleman. “This way we can control the quality of the product, control the margins so they aren’t marked up by resellers and control how we market the product,” he said. “We are going back to the old-fashioned way that Nabisco sold cookies — knocking on doors and offering samples, not through an Internet site.” Higgins moves on a fast-track, a trait that has enabled the company to expand into so many areas successfully, said Gus N. Lagos, a vice president in retail investment sales at Grubb & Ellis Co. who has referred several clients to NeuTex for construction work over the last several years. “If you miss two weeks without talking to him, what you thought you knew about the company is old news,” Lagos said. “He’s like a chess player. He’s always trying to figure out what the next move is five moves from now. His thinking is so far in advance that it has made the company beyond cutting-edge.” With the expanded elements of the company firmly in place, Higgins said the next phase will be to take NeuTex public. By the end of June, he plans to have completed a reverse merger that will enable the company to trade on the bulletin board market, with a Big Board IPO on the drawing board within the next six months. And Higgins said he’s not afraid of the fact that he will have to give up some control once the company goes public. “I have always thought of this company as my employer, not as my company,” he said. “I know I will lose some control as far as ultimate decision-making, but I have always asked for other people’s opinions, and they always mattered to me in running the company. I think this will be very similar.” by Tanya Rutledge, Houston-based freelance writer, special to Houston Business Journal See Original Article