Make It Clear: Why You Can't Just Flush and Forget
Make It Clear: Why You Can't Just Flush and Forget
Looking to the Future: Craig Taylor
Transitions are never easy but change often leads to growth both for individuals as well as organizations. Our guest, Craig Taylor, CEO of Infiltrator Water Technologies, talks with us about the purchase of Orenco Systems and what that means for the wastewater industry. With our sights set on the future, we talk about the benefits for our customers and end-users of our combined efforts and resources.
If you have comments or questions about our podcast, you can reach us through this link. To discuss a project or talk to one of our engineers, call 800-348-9843.
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Angela: Hello and welcome to Make It Clear, a conversational podcast about all things related to water and wastewater. I'm your host, Angela Bounds, and I'm joined by my co-host, Shawn Rapp. In each episode, we'll tackle a relevant topic with facts and expert opinions and make things clear.
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All right. Welcome back everyone. Today we are joined by Craig Taylor. Hi Craig.
Craig: Good morning.
Angela: And Shawn.
Shawn: Yep.
Angela: Of course. Shawn is here with us as always making sure that we stay on track and don't say anything ridiculous. So as most of you know, Orenco was acquired in October by Infiltrator Water Technologies and Craig
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is the president of IWT as we affectionately call them. They are called that in the industry also. So he is coming on the podcast today to talk to us about the acquisition and we'll save you guys all of the dirty details of the process that is entirely insane if you've never been through it before. But you know, we're going to talk a little bit about what
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transpired, why it transpired, and where we're heading in the future.
Craig: Yeah. It's been an exciting time…
Angela: Yeah.
Craig: over the last five months.
Angela: Yeah. So we went out to market. That's what they call it. We went out to market last spring. It was a bit of an accelerated process. Things went very, very quickly from the time that we went to market. And you guys came to the table immediately.
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So if you want to talk just a little bit about what brought you to the table with Orenco and what this means to have Orenco as part of the IWT family now.
Craig: Sure. First of all, thanks for doing this.
Angela: Yeah, absolutely.
Craig: One of my first for you guys. Overall, you're right, Angela. This was a process that it did go quick, but it wasn't something new for us.
Angela: Right.
Craig: For Infiltrator, we've been going through
02:25
and looking at the advanced treatment industry. And back in 2018, we acquired our Delta business, which is down in Walker, Louisiana. And that was kind of the start of getting into the advanced treatment business. We wanted to get into the commercial side of it and the residential side. Because we've seen the shift in the industry moving forward. Then we went out and bought Presby in 2019. And that was starting to develop our portfolio around advanced treatment. And I joined the company
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in 2020, right at the pandemic. So wasn't the most ideal situation, but it was also an opportunity for me to learn the company. And Roy Moore was their CEO at that time. And he was bringing me into the fold of the strategy and the plans. And 2021, Carl Thompson, our VP of Sales and Business Development. And we were looking at how we were going to strategize and continue to grow the advanced treatment business at that point.
03:24
We were down in Walker, Louisiana and we put together our five-year plan. within that five-year plan, of course you do the market sizing. You look at all the different companies that are in the market at that time. And of course, Orenco was on the radar. And we've looked at several companies and I met Jeff Ball about two years ago at the WETT show and had some conversations with him and our investor relations were there. And we felt like there was about that time. Jeff was looking at the future of the company and strategizing also himself.
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We've known you in the industry. We've known the family, which has brought that along over the last 40 years.
Angela: Yeah.
Craig: And very close to what our business model was like and what we came from.
Angela: Yeah.
Craig: We were a family run business. And then we, of course, bought up by private equity and made a couple of our own transitions during the time. And then in 2019, ADS had bought us.
Angela: Yeah.
Craig: So we've gone through that process that you were just talking about.
Angela: You guys have gone through three times, right?
Craig: Yeah. Being acquired.
Shawn: Wow.
04:23
Craig: And so we know exactly what you guys were feeling of preparing the business and going through the due diligence with us. overall, I mean, this was always in our strategy and our plan to grow our advanced treatment business.
Angela: It's very cool what you guys have done with the business, right? Cause infiltrator really did start with drainfield products and just the expansion out of that market into now tanks and then advanced treatment.
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the way that the company has grown and has expanded and continues to expand into areas that are needed, right? Those areas that are necessary within the industry to really help the country and the world and save the water. I will get on that soapbox for a minute, but the way that you guys are expanding into those areas where you see the most need for individuals and communities throughout the world. To me, that story is
05:22
It's a really cool story.
Craig: Yeah, definitely the sustainability,
Angela: Right
Craig: We need to continue to address as we go forward.
Angela: Right.
Craig: And it starts with Infiltrator where we were using recycled material. That's our sustainability story that 97 % of our materials, recycled material for our dispersal fields, which we use the chambers for, and then also for our tanks. But then taking that sustainability into the product development and that's the advanced treatment side.
Angela: Right.
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Craig: And Florida being a big market that has gone through that, there's the B maps that they've been talking about. And that's really changed the industry from that passive treatment to now the advanced treatment portion of the business. And that's where we've had some really good success with the product that we call our eco pods in that region. But then we were looking at the Orenco side and by putting these two companies together,
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We have now the opportunity to grow the residential side, the commercial side, and the municipal side. And having all those tools in our toolbox is really going to make us a differentiator in the market. And now we're the largest provider of advanced treatment products in the market too. So that's really exciting. that's, think putting the two teams together is going to be the true success of the company going forward.
Angela: That sustainability piece in the plastic recycling was...
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One of the things that made you guys attractive, at least to me in the whole process was, wait, they are actually putting their money where their mouth is, right? Sustainability is something that people talk about a lot. It is a buzzword, right? But not everybody puts that into practice. And it felt like you guys were really putting that into practice with that recycling piece.
Craig: And just not in our business, but also in our parent company with ADS. I mean, the focus to get a
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a billion pounds of recycled material in our products into the market. So we're working towards that. mean, we're over 500 million pounds right now of recycled material. continue to look at our product development as we move forward. And that's the, I would say the underlying of both companies, the innovation portion of the business.
Angela: On opposite ends of the treatment train, so to speak.
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we're both doing it just in different ways. And now bringing those together is really exciting for everybody.
Craig: It definitely is. And taking the engineers here in Oregon, there are engineers in Connecticut and down in Winchester, Kentucky.
Angel: Yeah.
Craig: And letting them brainstorm.
Angela: Yeah.
Craig: And seeing what you guys have for your product development, what we have for our product development, tying it into our manufacturing processes.
Angela: Right.
Craig: And saying, this is what we can do to the market and providing them a high quality product.
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that we can manufacture at a pretty low cost. And low cost doesn't always mean cheap, but it's low cost of making sure the operations that we're putting together have automation behind it. And automation allows for quality, and quality means consistent every time. So that's something Cosmin Batran, our VP of operations, is working here with Paul in saying, let's understand the operations and what we can do as we move forward.
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Angela: So let's talk a little bit about what does it mean now? So we've always been privately held, right? We were a family owned business as were you guys until the first acquisition. So what does it mean now that we're publicly held?
Craig: So when I joined Infiltrator, it was just a couple of months after ADS had bought us. So we were privately held also at the same time. So making the transition from private to public,
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You go through quite a bit. Now you're addressing issues to the investors or educating the investors about the market. So you're reporting up to them and it's quite different. It's looking at the industry overall and how we're performing in the industry and compared to a peers at that point. And all of our information is public out there. Your sales, your profitability, your working capital, how you're spending that money.
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That's little bit of the transition that everyone's going to learn about.
Angela: Right.
Craig: Where before it was the family, of course, making sure that you guys were achieving your expectations and profitability and how you're going to use that profitability, reinvest it back into the company. Well, that's all public for us now.
Angela: Yeah. It's all public information. It's not behind a veil anymore.
Craig: And it takes a little bit and we're working through that right now and just making sure we were putting the
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the strategy together, putting the budgets that are out there and then people understanding like here are the expectations and here are our targets and tying it back to economic indices. And we follow the housing market very closely on the residential side, the commercial, how much spend is out there in the market. Right now we're seeing a little bit of tightening with the administration changes and everyone's trying to understand what's happening. For myself, it is going through that process
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We have to develop both a quarterly and annual assumptions of what's going to happen. And then that gets rolled up into the legacy infiltrator. then that's then rolled up under ADS and our CFO and CEO will go out to the market and tell them, here's our expectations for the year, what the consensus is. And then at that point we just start operating against those plans. Now we've done a really good job in the last five years of putting together
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our plans and we've had this five year strategy plan always in place. And so when I became the president, two years ago, we'll be June, when I became president, we stepped back into the office with all the leadership team and said, let's put together our five year plan again, reassess it, came over the five pillars of what we wanted really focus on. And that has really been our guiding light. And by doing that, it helps to then make sure the
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external environment knows what we're doing for our strategy going forward. So we're starting to do that with the team here.
Angela: Yeah.
Craig: And getting that alignment with the Orenco and putting it in place as we move forward.
Angela: So what differences will people see in the marketplace? That is always the question, right? So we see a lot of difference on our side.
Shawn: Right.
Angela: Just running things a little bit differently. Kind of shoring up processes.
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going through new processes that we've never gone through before, change is happening. Almost all of that changes for the better and for the good. may not feel like that in the moment because change is hard. But you have to always try and look, you know, will this matter five months from now, five years from now? Will we be in a better place? Yes. Okay. Let's go through the pain right now. But in the marketplace,
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What differences do you think that people are going to see out there?
Craig: They won't see any immediate changes right now. What we're doing is we're both known in the market, Infiltrator and Orenco, and it's leveraging those relationships and making sure we're providing the best solution to the market. We want to make sure that's clear. So if it's a commercial project that's being designed, if Infiltrator has the better
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product offering, we're going to make sure that that customer is getting that offering.
Angela: For that market.
Craig: For that market. the same thing for Orenco. If it's an offering that is best suited for Orenco product, then we're going to do that. And then there's going to be, of course, those opportunities where it could be either product.
Angela: Right.
Craig: But we're giving those options. And it's the same thing that was happening before. What we are going to do is making sure that the sales organization is working with our contacts.
Angela: Right.
Craig: And we're putting those organizations together so we don't have this overlap.
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Angela: Right.
Craig: And how to best structure it throughout the U S.
Angela: Yeah.
Craig: And so that's actually happening while we're out here. So we're going through that transition, some great conversations and it's educating both sides about the products.
Angela: Right.
Craig: So we're educating our engineered system consultants. Those are our sales individuals that go to the market about the products for both businesses. And then of course we're going to be educating our system engineers. We're going to educate them too going forward.
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on the different product offerings and so they can design to them.
Angela: And the goal as always, as it has always been for both organizations is to provide the best solution for the customer. what best suits them, where they're at, what is going to best treat their wastewater and what ends up being most financially responsible for them.
Craig: Correct. And now we have the opportunity, as you mentioned earlier, we were heavily
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supporting the market on the dispersal fields. So now we can say, okay, here's the advanced treatment system, and then here's the dispersal field. And we're all under one company and we can design it all together.
Angela: And all the pipe.
Shawn: Right.
Craig: And think about it. the pipe or even make it even bigger and saying, why not a whole solution of here's the advanced treatment system, here's the dispersal field, here's the composite building that could be there right next to advanced treatment center. And then we got the control build.
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business together.
Angela: I mean, between the three, right? We can… I mean the three organizations. You literally cover everything.
Craig: Yeah.
Shawn: Sounds like there is a lot of opportunities for synergies.
Craig: It's a single solution for synergies. Yeah. It's a single solution, Shawn. Exactly that. It's the synergies that we're looking at. And our synergy here is to grow the businesses together. And that is our key focus. And it was always our priority. It was what we presented to the board and saying, once you put these two companies together, product offerings,
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the ease of doing business with us is gonna be one of the key attributes. Everyone's gonna look at it and say, okay, I understand how it works. Now it's not gonna happen right over night. I we have different systems. We have our IT department working with our finance organizations and saying, let's get these harmonized. They, of course, always take time when you go through acquisitions. So it's patience, but it should not impact
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our customers. That's always the key focus. Customers, number one, focusing on that, the product offerings that we have them serving the market in a timely manner. So that's what we'll continue to strive and do.
Angela: Yeah. Yeah. I've sat in enough conference booths and heard enough people that are, that are new to the concept, right? New to something other than big pipe. And they go, but wait, I can't just get the pipe from you too. I have to buy pipe somewhere else.
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Now we can say, oh, we've got a solution for pipe and we've got a solution for another tank possibility. And we've got a solution for drain fields. Like, no, we can help you.
Craig: Right.
Angela: Like the port made all of this as opposed to, yeah, we're going to give you this. And then here's a suggestion. You go figure it out.
Craig: It's having that whole portfolio.
Angela: All right. So what do you see the future? What do you see in the future for this organization?
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Craig: Well, first I'm very excited of what we've been able to do so far, just in a short period of time and getting out there and educating the market of what this looks like as we move forward. I see the future here is continued product develop and having those product solutions to support the ever-changing market that's out there. We're always looking at how we can make a smaller footprint of the product because the market
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is seeing that the housing is on smaller lots. There's not these two, three acre lots that we have that we can put our systems in, but having something that's smaller that can support the onsite. I really think that there's an opportunity on the municipal side to really grow the Prelos portion of the business. And if it's using an Orenco tank or an infiltrator tank to support it, but that's going to be an area that we can really, I think, grow significantly.
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and support the communities for it and how we can also be a utility too. So there's plenty of these different paths we can go down, but I think with the innovation of our products, the sales force that's out there, working with the contractors, the distributors, all of our customers and educating them and giving them these different options will solve any of the problems that they're seeing out in the market.
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And even from a regulatory standpoint and educating the regulatory agencies and telling them what's changing in the market and that we can develop the product that can get the, in our market, of course, we're looking at nitrogen quite a bit, the nitrogen reduction and achieving those higher levels, again, to be more sustainable out in the market too.
Angela: Yeah. I think we're really excited also. You, you never come to these decisions lightly, nor should you.
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you are kind of trusting your baby to somebody when you've grown something for 40 years like some of us have not me. I was really young 40 years ago, but.
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You know, and I think we did choose the best partner, the best organization to take what we've built and really take it to the next level. And with the offerings really bring together that full solution
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and take things into the future, places that we've only dreamed of.
Craig: Right. It just to kind of give you a sense of why I'm excited, because since 2021, when we really had a start of a focus on this advanced treatment portion of business, by the end of this year, our fiscal year, which ends in March of 2025, we've been able to grow that business by fivefold.
Angela: Right.
Shawn: Oh, wow.
Craig: And so that's why now we've got a rank underneath our belt and that offering.
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That's why I'm excited because we've we're able to do it with just our Delta and our Presby product and now bringing in someone like an Orenco will definitely continue that growth as we move forward.
Angela: Yeah.
Shawn: That's great.
Angela: And that's kind of what I've been really excited about too is, you know, that our mission is always to clean water and to offer that solution. And the more people that you can get that solution to, the more you're fulfilling your mission.
Craig: Right.
Angela: Right. So if we can grow it, then that means that more people
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have saved their water. More people have clean drinking water in the end, cleaner water. They don't have standing wastewater in their yard.
Criag: Yeah. And there's a couple of markets that are out there that are really challenged in that. And we've looked at Hawaii. I we know there's over 80,000 cesspools. Mike Saunders has been out there trying to crack that market and getting the support from different paths. If it's just private contributions to regulatory.
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And we of course know out in Long Island is another key area too. And Cape Cod. I mean these are all areas.
Angela: And everywhere in between.
Craig: In between. So it just, it continued to be an area that our product is going to be looked for to support what you were just talking about. How do we just make sure our neighbors know that we're going to have using clean water going forward.
Angela: Yep. Perfect. All right. Anything else you want to add?
Craig: No, thanks for doing this. I had a great time.
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Looking forward to, of course, what we're going to do here over the next several years.
Shawn: That's great.
Angela: Me too.
Angela: Thanks for joining us and thank you all for listening. We want to thank you again for joining us today. Before you go, don't forget to subscribe where you listen to podcasts so you're notified when new episodes are posted. Also, you can leave your comments or suggestions through the contact link on our website, www.orenco.com. Until next time, have a great day.
