Cleaning the air and turning a profit in Pensacola makes for a positive combination for these air pollution control specialists.

During the last few decades, concerns about air quality and environmental issues became big news. Since the passage of the first Clean Air Act in 1963, federal and state pollution controls have expanded and tightened. In the midst of all this, companies like Southern Environmental Inc. have faced the perils of an industry as hazardous as the smog it is expected to clear. But finding success in this business is worthwhile, as it can make everyone breathe a little easier.

John Caine, General Manager

Southern Environmental was started in 1988 to rebuild electrostatic precipitators (ESPs), collection devices that remove particles from industrial emissions using an induced electrostatic charge. It has become a major player in the marketplace precisely because it avoids the big mistakes. This is crucial, as its margin for error is painfully thin—and sometimes out of its control.

“We had a turnkey project in Mississippi stopped by Hurricane George a few years back. We were granted an extension but afterward it was impossible to hire labor at our prices,” said Caine. “All the labor was wrapped up in recovery efforts, and we took about a million dollar hit on that project.”

Natural disasters aside, Caine’s team must be nearly perfect in every aspect of planning and execution. Price estimates are fixed, so his application manager cannot afford to make a bad estimate. The company also has to make performance guarantees on its work, so if anything fails after a job is complete, it falls on Caine’s team to eat the cost.

“And we must meet the tight outage requirements. When you’re rebuilding the unit, the plant has to be shut down, and during that time the plant is not making electricity or money,” Caine said. “If we miss our target date, that hurts our customer, which hurts us.”

A narrow focus
However, Southern Environmental finds itself in the envious position of knowing exactly where to look to exploit potential business opportunities. With few exceptions, the majority of its business originates from either the pulp and paper industry or utility companies. In fact, Caine said well over 80% of his company’s work comes from those two sources. And while on the surface such a narrow focus may seemingly limit its opportunity to grow, current industry conditions suggests there is an ample supply of potential customers.

“The big driver of the business is the need to upgrade and replace existing ESPs,” said Caine, noting that paper mill equipment has a shorter lifespan due to the highly corrosive environment. Caine also said that while his company does consider projects outside the US as part of its long-term strategy, the cost of pursuing that business instead of domestic opportunities is not worth the expense.

“You hear horror stories about building in places like China, and then they copy your design and you don’t get another opportunity. So if we exert a little more effort here, we’ll get more orders domestically,” said Caine.
As part of the SEI Group, three companies sharing common majority ownership, Southern Environmental has the advantage of being a one-stop shop for potential clients. Originally, Southern Environmental was a spin-off of Southern Erectors Inc., a company that began operations in the industrial metal fabrication and erection business in 1973. The third company, Thermal Systems Group, was founded in 1985, focusing on the engineering and design of machinery and systems used in the pulp and paper industry.

“The three components of the projects are engineering, fabrication and procurement, and erection. It helps to have all of those functions under one control,” Caine said, adding that this ability gives his company an edge over the competition. “Some of the bigger companies do engineering but outsource the rest, which hurts you when you try to meet fast-track schedules.”

Southern Environmental hopes to keep its edge against its competition by being both more efficient and more innovative. The company is in the process of upgrading its AutoCAD software programs and has also launched a new wet ESP using a fabric membrane for collecting particles.
“In a normal wet precipitator, you have to use expensive stainless steel. Our design is much less expensive and lighter,” said Caine. “It is a bit unusual because this industry is fairly mature. We’ve been trying hard to bring that new design to market because it is unique.”

Clearing the air
One of the biggest challenges facing Southern Environmental as it works to keep up with increased business volume is government regulations. Without the existence of state and federal regulations, there would be no central body unilaterally applying these pollution control rules. So as the powers-that-be continue to exert pressure on industries that create the toxins, so does the pressure rise on the companies expected to clean them up.

“There is more pressure these days since people recognize that pollution is a national problem, not a state problem. The states are pressuring the federal government, more systems are being built, and more existing ESPs need to be upgraded,” Caine said, adding that his industry is working to address staffing issues resulting from the additional work. One way is by promoting the importance of the work his company is doing to clean up the air.

“We stress that when we interview new people. Hopefully, they’ll find a home with us and be comfortable knowing they’ll be contributing to the environment,” said Caine. “That’s the big motivator for me to stay in the business.”