Filtronics Discusses Effective Filtration Over The Long Haul

Rob Wise explains the Filtronics approach to water and wastewater treatment, equipment life-cycle costs, and environmental responsibility.

Todd Schnick:  We’re coming to you live, from Dallas, Texas. This is day two of AWWA ACE 2012 and Water Online Radio. I’m your host, Todd Schnick, joined my colleague, Todd Youngblood. Todd, we’re on our third interview. It’s already been an amazing day.

Todd Youngblood:  Can you believe how many people came out, just to listen to us? I can’t believe the attendance. It’s all driven by Water Online Radio.

Todd Schnick:  I’m pretty sure it is. The Water Online guys know how to do this right. I think it’s our next guest. I want to welcome Robert Wise, who’s the Vice President of Sales for Filtronics. Welcome, Rob.

Rob:  Thank you very much. I’m glad to be here.

Todd Schnick:  It’s our pleasure to have you. Rob, before we get underway, why don’t you take a second and tell us a little bit about yourself and your background?

Rob:  Well, I started with Filtronics about a year and a half ago. I came out of the water industry for about 30 years, actually, the heavy duty of it – filter presses, belt presses. I moved back to California, met up with Bill Hoyer at Filtronics. He wanted to bring me on board to change the direction of the company, and that’s what we’re doing today.

Todd Schnick:  Take a second and tell us more about Filtronics.

Rob:  Filtronics itself is a coagulation filtration company. We do arsenic, iron, manganese, fluoride, turbidity removal, heavy metals – potable water, basically.

We’re getting into more industrial – side stream, cooling towers, and that type of thing, but our media itself is a non-silica-based operation, and we feel that O&M costs and everything we have down the line are much better than those that currently are in the marketplace.

Todd Schnick:  I am glad to ask this next question to somebody that’s got 30-plus years under his belt and has seen things go up and down. You say O&M costs very casually, and there’s a lot of moving parts inside that. Talk a little bit about all the different components and the cost factor.

Rob:  When you’re looking at O&M cost – and we’ve found this to be very true in the last couple of years with Filtronics – is that everyone goes out for bid: we do specs on equipment; you’re trying to look for the lowest-priced machine you can buy; the buyers are out there, looking. They’re only out there for five to six years in a company. You’re looking at a 20 to 30-year life cycle on equipment, but no one’s looking at the O&M cost down the line – what chemical, labor, operational costs are.

We have to stop and think about what it costs to replace that media in five to 10 years. If you don’t take all that into consideration, what happens is you pay the low bid, but in five years you pay three times for your machine, because you replace the media two or three times.

You’ve got 10-year cycle time, you’ve got four-year cycle time. Most tanks will last 20 years to 30 years, depending on how they’re built. You’ve got tanks out there you buy very cheaply that will last two or three years, and they’ve got holes in them and you’ve got to replace them. So the replacement value, you have to look at it all the way down the line in the NPR. So O&M costing itself is a critical portion of what we do.

When we put a proposal together, we include chemical costs, the power and electrical costs, the cost of replacement media, cost of tank, cost of media – what you’re looking at down the line, in order to give the buyer a more specific look at what he’s really buying, in the long term, even though that buyer may not be around, himself, 10 years from now.

Todd Schnick:  Rob, I’m a little bit of a financial analysis geek, so I get things like net present value and cash flows and all that stuff. My partner Todd, here, doesn’t understand that. Talk to him like you would a plant manager or a water plant engineer, and talk about the financial aspects in making a decision that spans 20 years.

Rob:  I have the analogy that I’m going to buy a hamburger from you today, but I want to pay for it next year. That hamburger today is 99 cents. Well, you have no idea yet what that hamburger costs you, a year from now. In the process of doing analytical work – to your CPA friend, here…

Todd Youngblood: More credit than I deserve.

Rob:  Well, guys, you’ve put me on the spot here, because I’m not a CPA either. You have to look at what the cost of materials is going to be, from labor to chemical to the replacement cost of equipment down the line, because you’re paying for, today, what may cost you more tomorrow. How far do you want me to stretch this?

Todd Youngblood:  I think I understand.

Todd Schnick:  Rob, isn’t it best just to choose the lowest-cost alternative?

Rob:  No, and the reason it isn’t is because of the fact – the old adage is “You get what you pay for.” In a municipal industry, you’re looking for 20- to 30-year payback – the life cycle for that period of time. If I buy a piece of equipment for, let’s just say, around $100,000, and that’s my lowest price today. My next bid was $230,000.

I, as the buyer, say, “Gee, I’ve only got this budget in mind, and I can only stick to that, so I’m going to buy the $100,000 piece of equipment.”

When he analyzes, during the time that he’s buying it, his original cost for equipment, his chemical cost, his labor cost, his operational replacements down the road for a year, he’ll find out that he spends more a year from now than he did when he originally bought it.

Todd Schnick:  I want to be careful how I ask this next question, because I’m not taking a cheap shot at anybody, but I look at this 20-year timespan, all the maintenance costs, the repair costs, the replacement parts…

It would be easy if I wanted to be a little less than honest, as a vendor, to go and try to sell a set of equipment, as you do, and not really point out all these cost factors. Is that something you run into? Is that a differentiator for Filtronics?

Rob:  It is and it isn’t. There are companies that do the same thing that we do, that are honest, that go out about it. There are those, of course, that want to try to just get in and get it sold and be done with it.

The problem with that is that it’s an emotion that the manufacturer, the people, the salespeople, our reps, myself, have to get with the customer you’re dealing with people, and give them what you feel is the honest to God truth.

What we do is we lay out those costs in writing – so you have chemical costs, power costs, power arrangements that you’re looking at… media costs, replacements. And on top of that, Filtronics is one of very few companies that actually gives a process guarantee to what it does; not only a mechanical guarantee, but a process guarantee for that length of time.

To give you an example, in 1974, the first system for Filtronics was put in a little town called Buellton, up the coast from Santa Barbara. That location has only changed media out one time, and not really changed it out, only replaced it 10% at one time, in the last 30 years.

Todd Schnick:  You did say 1974?

Rob:  I said 1974, correct.

Todd Schnick:  Holy cow.

Rob:  It gives you the idea of what we look at as a life expectancy for our material. We look at a 30-year cycle, rather than 10 or 15 years, as a lot of people do.

Todd Schnick:  Rob, one final question. Let’s shift focus and go up to 10,000 feet and look down on the industry. What trends do you see coming down the pike in the next three to five years?

Rob:  What I see is the culling in of many manufacturers, and I think you see a lot of big companies buying up smaller companies. Everybody’s getting into it. I happened to be up at a show in Nova Scotia this last year, and I think the big push in the United States is going to be what they call, and excuse the phrase, “toilet-to-tap.”

You’re going to see the industry, as a whole, start to gather together to figure out how we can conserve water and do a lot of more reuse than we’re doing now.

Water’s precious, and we’re in an industry that we can do something – we’re sort of the guardians of what’s happening. So I take my job seriously, as to how I remove heavy metals, arsenic, manganese, turbidity, fluoride.

People, if you did a test, just sitting at the table, and you had smelly water that was clean and a little glass of dirty water, I will guarantee you the people will drink the dirty water before they drink the smelly water.

It’s a situation where we’re trying to give back to the community, through what we do, and make the environment better. I think you’re going to see more manufacturers themselves getting more involved in the environment, rather than just the industry.

Todd Schnick:  Rob, I hate to say it, but we’re out of time. Before we let you go, where can people get in touch with you, and where can they learn more about Filtronics?

Rob:  You can reach me at Filtronics, Inc., in Anaheim, California. We’re on the website at www.filtronics.com. You want me to give a phone number?

Todd Schnick:  Sure, if you want.

Rob:  (714) 630-5040.

Todd Schnick:  Outstanding. Robert Wise, Vice President of Sales at Filtronics, it was great to have you. Thanks so much for joining us.

Rob:  Thank you, gentlemen.

Todd Schnick:  Alright, that wraps this segment, on behalf of our guest, Rob Wise, my cohost, Todd Youngblood, all of us at Water Online. I’m Todd Schnick, and we’ll be right back with our next guest.