Seprotech's strategy is pure and simple Seprotech's strategy is pure and simple
Date February 02, 2005
Section(s) OBJ-Business
When Gilles Turcotte talks about his company's future, you can tell he's struggling to contain his enthusiasm.
The president and CEO of the Ottawa's Seprotech Systems Inc. says the company's 20-year-old business strategy has always been a pure and simple one, so to speak. First, find customers in the industrial, municipal, property-development and military sectors that have a water production or wastewater problem, and ask them how pure they need the water to be. Next, design and manufacture the equipment to purify the water, and make it simple and convenient for the customer to operate. Pure and simple.
What's feeding Mr. Turcotte's enthusiasm now is what he calls the "major technology breakthrough" that Seprotech has achieved right here in Ottawa. He and his team have high hopes it will mean a significant increase in customer orders from environment-conscious municipalities and regulatory authorities throughout North America.
Seprotech's achievement stems from its Rotordisk P-03 technology, a new phosphorous removal system it developed for its wastewater treatment plant in Manotick.
Phosphorus, the leading cause of excessive weed and algae growth in lakes and rivers, presents a major threat to fish and detracts from the recreational value of waterways.
Seprotech's challenge was to treat the 30 cubic metres of household wastewater generated daily by 72 residences in Manotick so that it was sufficiently free of phosphorous, and other contaminants, for release into the environmentally-sensitive Rideau River. The river falls into the Ontario Ministry of Environment's stringent "Policy 2 watershed" category.
Earlier this month, the ministry issued a discharge certificate for the Manotick plant, validating the capability of Seprotech's new Rotordisk P-03 technology to produce water that's 99.999997 percent phosphorous-free. At a phosphorous level of less than 30 parts per billion, the effluent from the system is almost drinking water quality. This is great news for Seprotech's customer, the City of Ottawa, and for Manotick residents, who have grappled with wastewater management problems for years. The Manotick plant has the capacity to process in excess of 100 cubic metres of wastewater daily, nearly quadruple its current treatment flow.
Seprotech is billing the new system as leaving at least three times less phosphorous in wastewater than other available systems. Mr. Turcotte said the new system "shatters all previous technical barriers and sets new industry standards."
If he's right, there could be a big market in a world increasingly thirsty for an environmentally-friendly solution to its wastewater management problems and looking for new ways to keep its waterways clean.
Admitting earnings during 2004 were "disappointing," Mr. Turcotte said satisfying this tough environmental standard will allow Seprotech to reposition itself in the market in 2005.
"The new technology we have developed will allow us to turn the corner in terms of earnings," Mr. Turcotte said.
Seprotech's last fiscal year, which ended in last August, finished on a sour note. Revenues in the company's fourth quarter plummeted to about $398,000 from $1.74 million the year before. Despite the loss of momentum in the final quarter of the year, full-year revenues were up still up by 24 per cent.
Mr. Turcotte attributed last year's lacklustre finish to several factors, including contract delays for Rotordisk products - the heart of the company's biological treatment capability.
First-quarter results released earlier this month also demonstrated a slow start to the new fiscal year, with revenues down by half from the year before at $662,000.
"We are regaining traction and this should be reflected over the next two quarters," Mr. Turcotte said. "Our current backlog is a healthy $2.5 million and goes a long way to getting us back on track. "
He is also expecting work to start in the near future on a $1-million contract with the Canadian Forces that was awarded last March to repair and overhaul its fleet of reverse osmosis water purification units. These units are similar to those in use by Canada's Disaster Assistance Response Team (DART) in the tsunami-devastated Ampara region of Sri Lanka to provide clean drinking water for disaster survivors.
This work is in addition to Seprotech's ongoing three-year, $6.5-million contract with the Canadian Navy to repair and overhaul its shipboard reverse osmosis delsalinators used on naval vessels to produce fresh water from salt water.
The company generates about half its revenue through manufacturing and commission of its Rotordisk systems. The other half comes from the repair and overhaul work with National Defence.
Seprotech's 10,000-square-foot facility on Holly Lane is where the company carries out its "core technology manufacturing function," according to Martin Hauschild, executive vice-president of business development.
Mr. Hauschild, who spent 16 years as an army engineer, said the manufacturing, and repair and overhaul operations are not as separate as one might think. The work from National Defence has honed the company's ability to meet the testing, quality assurance and high-performance standards required for military and naval equipment.
"The units we repair and overhaul are used in the most rugged, isolated and inhospitable locations in the world, often under hostile conditions or within war zones," Mr. Hauschild said. "We've taken those lessons to heart, and incorporated them into the design, engineering and manufacturing of our Rotordisk technology products."
As proof, Mr. Hauschild points to Seprotech's large wastewater plant at a gold mine in the Andes Mountains in Peru. At an altitude of about 4,615 metres, he claims it is the highest wastewater facility in the world.
These dual goals of robustness and operating simplicity are evident in Seprotech's Clementine product, rolled out last March. The quiet, odour-free and portable unit is a self-contained wastewater plant in a package no larger than three by 2.5 by 2.5 metres.
"The Clementine is truly a 'plug 'n' play' plant," Mr. Turcotte said.
"You just connect your wastewater pipe, plug the unit into your power source, and you're producing high-quality effluent within hours," Mr. Hauschild added.
With the momentum generated by Seprotech's new advanced phosphorous system combined with the user-friendly convenience of the Clementine, Mr. Turcotte is anticipating a busy and bright future. Pure and simple.
By Jeff Esau
Special to the Ottawa Business Journal