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Environmental business surge.

LABELED ONE OF THE BIGGEST business issues of the 1990s, environmentalism is expected to permeate politics, policy and profits. In Fortune magazine's Feb. 12 cover story, associate editor David Kirkpatrick wrote: "Trend spotters and forward thinkers agree that the Nineties will be the Earth Decade and that environmentalism will be a movement of massive worldwide force."

Already the evolution of environmentalism -concern about impact on the environment-has thrust new responsibilities on companies of all sizes. They include waste management, pollution prevention, increased liability, employee education, and monitoring of material handling, disposal and shipping.

Even when compliance to Earth-impact-minimizing behavior is not mandated, firms are posturing to promote positive images, or to avoid tarnished ones. Although costly, contingency planning, remediation, training and evaluation of environmental impacts increasingly are considered essential costs of doing business.

The dizzying demand for talents and technologies to address the Earth Decade's concerns has created a mushrooming environmental business sector. Professional services and products are providing needed solutions and capitalizing on the new opportunities of environmentalism. Their capabilities are touted in resumes and business profiles revised to play up key words such as environmental, hazardous material and toxic.

Following more than a year's highly visible national media coverage of changes wrought by the March 24 wreck of the Exxon Valdez in Prince William Sound, Alaska is one of the first places that comes to mind when conjuring up images of fouled or endangered environment. As a result, the oil-spill state also has been spotlighted as a possible business location by firms seeking slices of the environmental business pie.

Propelled by profitable spill-cleanup business last year, the influence of environmentalism can be seen clearly in Alaska's business fleet. Environmentalism is drawing new firms to the state, creating business opportunities for those already doing business here and encouraging companies to consolidate or reorganize to strengthen their Alaskan environmental service or product capabilities.

One business enjoying swelling demand for its services is Martech USA Inc. of Anchorage. Offers to purchase or merge with the business last year and an independent appraisal of its worth by Paine Webber of New York convinced Ben Tisdale, president of Martech, to take the firm's stock public.

The initial offering in December sold 1.5 million shares of stock. A supplemental stock offering is planned for June.

Martech stock's value recently rose when the company announced second-quarter, fiscal year 1990 revenues of $9.5 million, more than triple the comparable 1989 figure. Halfway through the fiscal year as of Feb. 28, Martech reports total revenues of $22.2 million, compared with $8 million in the first half of fiscal year 1989.

Tisdale attributes the revenue jump to marine construction and diving services in the Gulf of Mexico and hazardous-waste cleanup projects and oil-spill response in Alaska and California. Martech was a major contractor in cleanup work following the early February spill of 400,000 gallons of North Slope crude oil off Huntington Beach, Calif.

Founded in New Orleans in 1974, Martech pioneered the use of remote-control vehicles for deep-sea exploration and construction. It has- become one of the largest deep-diving contractors in the United States and today operates three divisions-marine services, marine pollution control and onshore field remediation.

After visiting Alaska, Tisdale moved corporate headquarters to Anchorage in 1978. Martech also maintains offices in California, Louisiana and Washington, and new locations are anticipated on the East Coast this summer and in the Northern Midwest next year.

The company entered the environmental business in 1988 when it purchased Unitech of Alaska's oil-spill response organization and personnel. Since that time, it has worked on 25 oil spills, including the Prince William Sound spill last year.

Dave Maiero, manager of Martech's Environmental Service Division, says the company operated skimmers and other equipment owned by the Cook Inlet Response Organization. Martech conducts hazardous-waste-handling training for CIRO, an equipment cooperative owned by 15-oil companies, dock owners and shippers.

Also in response to Alaska's infamous oil spill, the company provided training for supervisors of other cleanup contractors; 300 personnel, 17 vessels and a 432-man hotel barge for cleanup work; and diving services for assessment and repair of the oil tanker.

Although not involved in efforts to respond to the Exxon Valdez spill last year, officials of Norpol Group of Norway think their firm's oil-spill experience might have brought new solutions to the effort. In early March, a team of Norpol executives visiting Alaska reviewed Exxon's response to the spill. Says John Bruun Andersen, president of the Norpol Group, "If we'd had a team of talent in Alaska last summer, it might have changed handling of the cleanup operation."

Norpol Corp. of Seattle, one of numerous companies held by the Norpol Group and specializing in marine environmental protection and shipping, recently established a new 49th state subsidiary, Norpol Alaska Corp. Alaskan John Anderson was retained as president and general manager.

According to John Andor, president of Norpol Corp., the firm has done business in Alaska for more than seven years, primarily selling oil-spill-response equipment. Anchorage-based Unitech has been a distributor of the company's products.

Through its Alaska subsidiary, Norpol hopes to become involved in implementing spill-prevention plans. The firm is a bidder in CIRO's search for an oil-spill-response vessel. CIRO, which has been leasing a boat owned by Zapata Gulf Marine and is looking at entering into a long-term agreement with owners of a vessel capable of towing disabled tankers and of carrying and deploying spill-response equipment, had set an April 9 bid deadline.

Another firm interested in the CIRO business is Chempro, a Burlington Environmental Inc. subsidiary with offices in Alaska, California, Oregon and Washington. Chempro was created in December 1988 by the merger of Chemical Processors of Seattle, the largest waste-management company in the Pacific Northwest, and Crowley Environmental Services, a Crowley Maritime subsidiary specializing in oil-spill response and site remediation.

Jack Stanger, Chempro's Anchorage marketing manager, says the firm last year put together a new business plan for expansion in the Alaskan market, which Crowley Environmental had served since 1975. In January, Chempro landed a contract to manage hazardous waste generated by the military services in Alaska, using its treatment, storage and disposal sites in Washington.

According to Stanger, the company is introducing its own line of groundwater treatment and soil remediation equipment. Among other services Chempro delivers are spill management and training. Unusual for combining both services and products, Chempro also markets absorbents, booms, vessels, storage structures and industrial-effluent treatment equipment.

Stanger says Chempro's Alaska business has grown substantially over the last year because of increasing opportunities in the market and the company's efforts to expand in the 49th state. He expects the Anchorage office's staff of 10 full-time employees to almost double by the first quarter of 1991.

Through its engineering consulting practice, Peratrovich, Nottingham and Drage of Anchorage has become involved in environmental products. But Roy Peratrovich, senior vice president of the company, says he doesn't expect the business to diversify into product marketing; instead its principals are interested in the full rights of engineering applications for those products.

Bill Gunderson, a civil engineer with Peratrovich, Nottingham and Drage, invented the Gunderboom. Although originally envisioned as an easily deployed boom system to prevent shoreline contamination during construction and dredging, the product proved particularly useful in Prince William Sound cleanup work last year. In January a new business unrelated to Peratrovich, Nottingham and Drage, Gunderboom Inc., was created to market the Gunderboom and other environmental services, materials and equipment.

Peratrovich, Nottingyam and Drage is part owner of another business, Sorby Sales Ltd., an enterprise created to market a spill-response product called Sansorb. Sorby Sales acquired the North American licensing rights to manufacture and distribute the plastic absorbent capable of selectively lifting liquid hazardous materials from other liquids.

Although not used in cleanup work in Prince William Sound last year, Sansorb has been proven in other oils-pill-response efforts. The product's promoters say it has wide applications for cleanup and readiness, as well as for packaging to ship hazardous chemicals.

Sorby Sales is a holding company for Sorby Alaska Inc., which was incorporated in December to build and operate a factory to produce Sansorb, according to Terry Brady, president and an owner of Sorby Sales. He expects the Anchorage plant to begin operation in early summer, employing fewer than a dozen and marking but the first of several factories to be built throughout the country. Major customers targeted are spill-cleanup contractors and oil companies stocking shelves for spill readiness.

Oil-spill response has generated increasing business for VRCA Environmental Services, a division of Natchiq Inc., one of Arctic Slope Regional Corp.'s many subsidiaries. Formerly part of GSL Oilfield Services, which was acquired by ASRC in 1988, VRCA over the last year and a half has responded to oil spills on the Alaska Peninsula, in Prince William Sound, in Fairbanks and at Anaktuvuk Pass, according to jim Steward, senior project manager. "Smaller spills are being reported and being remediated than in the past," he says.

VRCA also provides technicians who monitor fuel transfers at marine and land drilling platforms and, since acquiring Tracer Industries' Alaska business, is performing leak trace testing to identify underground pipe and tank leaks. Additionally, VRCA is launching an asbestos-abatement division to address the growing need for handling asbestos in schools and other public buildings.

In another area of opportunity, the Native-regional-corporation-owned environmental business is developing certified courses for oil-spill response, hazardous-material handling and industrial first aid and safety The firm anticipates increased demand for such instruction because new federal and state requirements now mandate certified training for workers performing hazardous-substance, spill-response duties at sites for which a government agency has required cleanup.

Increasingly engineering and design firms must be able to offer their clients environmental expertise. In Alaska's recent and ongoing construction doldrums, demand for evaluation and technical solutions is creating a significant source of business for those companies.

Arctic Slope Consulting Group, another ASRC subsidiary, teaches asbestos abatement courses, as well as providing environmental design information for new and existing facilities. The largest Alaskan-owned engineering firm, its environment-related services include handling property transfers and environmental assessment; evaluation of underground storage tanks; sampling of air, liquid, solids and sludges; and conducting on-site analysis. Related to its growing environmental services, Arctic Slope Consulting Group in February added a risk-management division that assists businesses in dealing with liability and risk assessment.

Although environmental services skyrocketed revenues last year for Veco International of Anchorage, the firm's marketing and sales manager, Gary Matlock, notes long-term impact of the Exxon Valdez oil spill may be bad for the company: "We are a general contractor, as opposed to an environmental concern. We can respond if there is a spill and bring together all the services. But the push for no development as a result of the spill is pretty negative for our business, which relies largely on exploration and production."

As the general contractor for Exxon's spill-cleanup work, Veco's spring and summer expenses for labor, supplies, boats and subcontractors through early September totaled $700 million. Matlock says the firm is seeking to land new business based on its management of the massive response project. "Veco is vigorously pursuing oll-spill-response-related business with organizations such as CIRO and PIRO (Petroleum Industry Response Organization)," he explains.

Matlock adds that although the firm does not plan to undertake related lines of business, such as hazardous-waste disposal or scientific investigations, Veco is able to marshal a huge labor pool for emergency response. "Our primary business has been as a response contractor to major oil companies on the North Slope. Oil companies look to contractors to maintain skilled staff and quite a bit of equipment, sometimes with no commitment to employ those resources on a firm basis," he says.

One of Veco's largest cleanup supply vendors last summer was Unitech of Alaska. Founded in 1985, Unitech sold its service operation to concentrate on product and equipment sales in 1988.

Says George Lorenz, president of the company, "We made that decision because of our size. It was a lot easier to revert back to supply side only. One down side of being small and being a contractor is insurance is extremely expensive. Today, even with people here that are certified spill technicians and hazardous-waste handlers, we are strictly a supply depot, which carries less liability."

Last summer Unitech bought the assets and distributorships of an Anchorage company, adding industrial and janitorial supplies to its product lines. It also recently acquired a 15-state distributorship for a premium brand of absorbent products.

According to Lorenz, Unitech's business has grown about 25 percent a year, but spiked significantly last year. He says revenues approached $9 million in 1989, of which roughly $4 million in sales was attributed to Alaska spill business.

The company opened a Seattle office in 1986, a Portland office in 1987 and a California office this year. "We get a lot of attention with the Alaska in our name, especially farther south," notes Lorenz.

Unitech's president says the environmental business is as hot-if not hotter - than electronics were 10 years ago. Since the spill last summer, a lot of new companies are competing for market share here in Alaska. It's a normal thing - kind of like a gold rush," he adds.

Although the evolution of environmentalism has drawn new competition for the state's established environment-related companies, it also is enabling Alaskan companies to tap larger markets and is encouraging new business startups. Many firms likely will profit, but others will be rebuffed by competition and the difficulties of managing and operating fast-growing businesses. Lorenz points out the majority of environmental companies are small firms and easily could fall prey to the dangers of overleveraging to meet capital demands of rapid expansion.

In Unitech's immediate future, he sees brisk business from equipment purchases over the next couple of years. Environmental business is ripe with opportunity for Lorenz and others. "Admittedly it's hot. Admittedly it's a great business to be in," he says.
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Title Annotation:Alaska
Author:Griffin, Judith Fuerst
Publication:Alaska Business Monthly
Date:May 1, 1990
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