Smart Growth

Mike Phillips uses new technology to create a competitive edge and anchor growth opportunities on a foundation of established business

Mike Phillips believes in evolution. His business, based in Pelzer, S.C., has evolved from construction contracting to a diversified concern that includes two complementary businesses employing more than 100 people.

A.C.E. Environmental Inc. (A.C.E. stands for A Cleaner Earth) offers solid waste hauling, hazardous waste disposal, construction materials recycling, landfill services and environmental rehabilitation.

Phillips Recoveries Inc. offers industrial cleaning and wet and dry vacuuming, water jetting, vacuum excavation and pipe repair, and is expanding into an increasingly high-tech future, offering laser profiling, video inspection, satellite mapping of buried infrastructure, and submarine inspections.

At the heart of his plan for growth, Phillips insists that all of his ventures must be environmentally sound and grow organically from each other, providing cross-business support when it makes sense. Expanding the business also means aggressively pursuing out-of-state opportunities, particularly high-tech projects involving video inspection and GPS locating services, using increasingly mobile equipment.

Extending the reach

Phillips Recoveries began as a niche business, evolving from a chance opportunity. “We were running a general building contracting business around 1985 when we got a call that a truck had overturned and was spilling diesel fuel on the interstate,” says Vickie Phillips, vice president of both companies and Mike’s wife.

“We had some heavy equipment available, and we responded to the emergency and excavated the soil where the diesel oil had spilled, ” she says. “We kind of liked the work. We got hazardous materials training, and we grew in that direction.”

Over the next decade, the business expanded into industrial cleaning, materials handling, and waste management. The company bought its first vacuum pump in 1996 and established Phillips Recoveries the following year.

The company currently services mainly industrial, institutional and government clients at the state and municipal level. Pelzer, in the northwest corner of South Carolina, is in a nexus near North Carolina, Georgia and Tennessee. But Mike Phillips isn’t shy about extending his reach. Some projects take him as far as Ohio, Virginia, West Virginia, Florida, and even Nevada.

“For jetting and pipe cleaning, we’re largely dealing with cleaning out industrial products like powdered liquids and solids like pellets, clay and cement powder,” he says. “We also vacuum out oil and sludge from tanks and oil separators and have contracts for cleaning and jetting hospital sewage lines.”

Phillips Recoveries has three wet or dry vacuum loaders with high-pressure jetters at its disposal. They are King Vac units with 3,000-gallon tanks, supplied by Keith Huber Inc. Demands on the vehicles are so great that the company has ordered a fourth King Vac. “We’re grossing 20 to 25 percent more every year on the Phillips Recoveries side,” says Mike Phillips. That company represents about 60 percent of overall billings and slightly more than half the employees.

Multiple services

One of the largest contracts is with Owens Corning Corp., which has several plants in the area. “This client is typical in that we perform a whole range of services involving both A.C.E. and Phillips Recoveries,” says Phillips.

“We jet and clean pipes, we haul waste, and we offer vacuum excavation to locate old infrastructure and expose areas to lay new infrastructure,” he says. “Once we’re serving a client with either business, and observing their operations and needs, the first question is: How can we extend that relationship to serve them better?

“We’re continually moving into new niches, and we’re a totally integrated company. If I’m looking for work for Phillips, I always have an eye open for A.C.E. If A.C.E. picks up construction and demolition waste, rather than take it to a landfill, we would rather grind that material and use it to make stabilization media for lagoons and wastewater treatment plants.

“If we drain a sewage lagoon,” he says, “we can offer to just drain it with our vacuum trucks, or we can dry that material in the lagoon using thermal treatment, then provide the client with options for disposing of the material or reusing it. We can help to make companies as green as they want to be, and help them to achieve their recycling and environmental goals now, using available technology, instead of in 2010 or 2012.”

Making industry green

The informal slogan, “We Make Industry Green,” provides a guiding philosophy for the companies as they head toward a future that increasingly embraces environmental stewardship. But Phillips is quick to point out that the business isn’t selling environmental snake oil, especially on the Phillips Recoveries side.

“You have to be honest with the client,” he says. “A.C.E. can take industrial waste products and turn them into fuel, but when Phillips jets a pipe or vacuums out a waste tank, most of that material isn’t reusable. We dispose of it in an environmentally responsible way to regulatory standards, but we’re not at the point yet where we can make that part of the business any greener.”

Phillips says he’s a technophile, constantly examining new technologies to make the business more competitive. It’s in the high-tech field that he’s expanding the geographic range of Phillips Recoveries. He sees the location of new projects as an economic factor, not a physical one.

“If you offer the right service at an acceptable price, you’re only limited by your willingness and ability to move the equipment from location to location,” he says. “You’re obviously limited by how far you’re going to haul a vacuum truck from one central location, but in terms of high-tech services, your clientele will be interested in what you offer, not where you’re from.”

A range of solutions

The company has assembled a range of equipment that allows it to offer video inspection, laser profiling in wet or dry lines and satellite mapping of infrastructure. “When we source the equipment, we don’t look for an all-in-one solution,” says Phillips. “We like to assemble our own solutions out of the best available equipment. We’re not stuck on a particular manufacturer. We look at the specifications and select one from here and one from there.”

The laser profiling equipment not only maps the line’s interior but also calculates optimum flows and available pipe capacity. The company has recently expanded its arsenal with GPS locators that provide detailed digital mapping of infrastructure as it is being inspected below. “As soon as we’re finished, we can dig down from the top and find that line with certainty,” Phillips says.

That provides the client with a map of its permanent infrastructure assets and allows Phillips to offer line repairs on the spot. The company provides trenchless repairs with cured-in-place pipe lining, employing epoxy resin. Recent laser profiling/GPS contracts include the Virginia and South Carolina Depart-ments of Transportation and the city of Buford, S.C.

Empowering the client

While most contractors offer clients a report and a record of the video inspection on tape or CD, Phillips encourages clients to watch live results from a comfortable seat inside one of the service trucks, where a video feed is displayed on a flat-screen monitor.

“This is different from just reporting that the pipe has a blockage or a leak and saying ‘There it is,’ and letting them decide what to do with it,” he says. “When they’re seeing it live, they have a stake in what’s happening.

“We can make them aware of what the options are, and they can see just what the condition of the pipe is themselves. Perhaps the pipe still has enough capacity to handle its expected load,” Phillips says. “We can show them that. Money is really tight these days, and they may decide they don’t need to fix the problem right now, but it’s their decision. It empowers the client, because they’re part of the decision-making process.”

Phillips says the company’s future will increasingly rely on acquiring and mastering the latest technology, then finding new ways to expand its use into further niches. While the businesses continue to grow, he’s preparing for a host of additional opportunities, particularly from state and municipal entities waiting for the release of federal economic stimulus funds earmarked for infrastructure projects.

“Everyone is looking for a better and more economical way to do things,” he says. “Technology gives us the power to make that happen.”


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