Pollution-control makers confident they'll weather recession

EARTH MATTERS IN BUSINESS

April 11, 1991|By Grant Ferrier | Grant Ferrier,1991 Los Angeles Times Syndicate

Emboldened by the flood of environment regulations pouring out of government agencies over the past few years, companies developing pollution-control technologies seem confident that the recession will leave them relatively unscathed.

"Business looks pretty good," says Walter Everett, chairman, president and chief executive officerMet-Pro Corp. of Bala Cynwyd, Pa., a manufacturer of liquid and air purification systems.

Not only does Everett expect sales for fiscal 1991 to be higher than the $37.9 million reported for fiscal 1990, but bookings have remained firm and he proudly points to a 10 percent debt-to-equity ratio. At a time when companies in other industries are canceling expansion plans, laying off employees, closing sites and streamlining operations, Met-Pro is spending $5 million on two new facilities, Everett says.

Other pollution-control companies also are viewing their futures optimistically.

"Our backlog is twice what it was last year," says Dave Eakin, president of Gundle Environmental Systems Inc., a Houston company that manufactures synthetic liners for landfills.

Gundle is just beginning to enjoy the fruits of its patience, thanks to imminent passage of the federal Resource, Conservation and Recovery Act's Subtitle D rules, which mandate synthetic liners for all new landfills.

The company is well positioned to pursue a market that is expected to reach $300 million to $500 million in the next few years. It already controls 60 percent of today's U.S. market for landfill liners and has "a significant presence" abroad.

Many environmental companies note that customers aren't waiting until the last minute to make changes that will bring them into compliance with the regulations.

Still, regulations won't help if basic industries are forced to shut down, notes David Unger, CEO and chairman of Midwesco Filter Resources Inc. of Niles, Ill. Midwesco supplies filter bags for industrial air pollution-control systems at utilities and for coal-fired boilers, incinerators, co-generators and producers of metals, cement, chemicals and other industrial products.

"We're seeing some effects from the recession, but it's more on our profit margins than our order volume," Unger says. He attributes the "margin compression" to price-shaving by competitors and tough dealing by customers, products of a "recession mind-set" rather than an economic downturn.

While executives admit that an increase in the recession's severity may hurt future business, most seem relatively confident that the environmental industry, and air pollution-control technologies in particular, would survive the economic downturn unimpaired.

"We think the environmental industry will be one of the industries less affected," Unger says.

Grant Ferrier is editor of the Environmental Business Journal, San Diego.

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