H2Scan Senses More Demand, Moves to New Space

Anticipating increased demand for its hydrogen detectors, H2Scan has moved into larger quarters in Valencia, increasing its manufacturing and R&D facility five-fold. The 19,000-square-foot space was custom designed for the company with continual growth in mind. Since occupying the building in early September, company executives have already noticed an improvement in productivity. “By adding calibration stations and workstations and having more streamlined gas flows, it is easier to operate,” said President and CEO Dennis Reid. H2Scan’s detectors and monitors are used in oil and gas refineries, nuclear power plants, and various other industrial facilities to detect the presence of hydrogen and monitor safety and alarm systems. Demand for these products is expected to be strong as utility companies adopting smart grid technology will require more of the hydrogen sensors for use in transformers. H2Scan is a privately held company that does not release revenue figures. While still a small company — there are 31 employees — H2Scan’s devices are being noticed and are gaining wider acceptance. In the past 18 months, the company has signed agreements to provide subassemblies for monitoring devices to three large companies in the energy supply chain. A contract with British Petroleum has H2Scan supplying analyzers for a refinery in Washington State. The company’s current production is 400 units a month, but the goal is to boost that substantially — to 1,000 units or potentially even 2,000 units a month, said Phil Lachina, who is both chief operating officer and chief financial officer. Having five times the space to assemble the detectors and monitors will help reach that goal, Lachina said. H2Scan is making its biggest push in the energy market with a sensor that operates inside electrical transformers to detect potential problems. The sensors are less costly and give immediate results compared to the current hydrogen detection method of taking oil samples from active transformers and waiting for results from a lab, Lachina said. That current approach is fine, but there is a trend of utilities using more technology and a value on online visibility, said Jeff Goolgasian, president of Weidmann Diagnostics Solutions Inc., a Hanover, N.H.-based firm that tests transformer oil. In August, Weidmann announced a deal with H2Scan to sell the company’s monitors to utility companies. Weidmann’s interest stemmed from the device’s ability to handle the “nasty, harsh environment” inside a transformer, Goolgasian said. “They have been able, through hard work and some talented people, to overcome issues and further develop the technology to handle a transformer,” Goolgasian said. Contracting with H2Scan as a supplier full hydrogen monitors is just a start for Weidmann Diagnostics. “Our goal is to improve upon their technology with our knowledge of transformers,” Goolgasian said. New facility Reid started H2Scan in 2002 with the assets of a failed company, DCH Technology. It has always been located in the Santa Clarita Valley, first on Westinghouse Place and now in the bigger space in an industrial park on Turnberry Lane. Manufacturers such as H2Scan are just the type the area wants to attract and retain. “Advanced manufacturing is one of our target industries and we expect the future to look bright,” said Jonas Peterson, executive director of the Santa Clarita Valley Economic Development Corp. “There is a large presence today and we expect it to get stronger.” In its search for a new location, H2Scan didn’t even consider leaving the area. The Santa Clarita Valley has been the company’s home and it’s where its employees live. “They (the employees) are very custom to H2Scan,” Reid said. After settling the terms of the lease in the spring, the company set about improving the space, adding offices, bathrooms and a break room. In configuring the shop floor, H2Scan gave considerable attention to future expansion needs, as well as ease of communication between departments, Lachina said. For instance, sales offices are as close as possible to the shipping dock, Lachina said. H2Scan uses hydrogen gas to calibrate the detectors requiring large groupings of tall, green bottles in the manufacturing area. The organization of the bottles improves efficiency and new connectors to the calibration work stations cuts down on the amount of leaks, Lachina said. More lab space has helped the company refine and further develop its sensors, which are tested over months under simulated life conditions using glass jars of oil pumped with hydrogen. The larger lab is more open, professional and flexible — an environment that does not constrain creativity or discovery, Lachina said. “I like how R&D has its own world,” said Kat Figel, H2Scan’s purchasing and materials manager. “We are not sharing tools, not sharing space and not falling over each other.”