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Energy Exec Magazine May 2008 - Utilities, Inc. - A Thirst For Innovation
May 1, 2008 -
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May 2008 A thirst for innovationUtilities Inc. has become one of the largest privately owned water and wastewater companies in the country
Under new leadership + Improving efficiency + Green issues
Utilities Inc., formed in 1967, has become one of the largest privately owned water and wastewater companies in the country
Written by Fiona Nicolson and Produced by Robert Tuneburg
In its earlier years, Utilities Inc., a company formed in 1967, focused on acquisitions and formations in the Mid West, before expanding its operations into the South East. Then, in the 1980s, a major opportunity was identified, that would take the company to the next level. The result was that Utilities, Inc. made a number of large multi-state acquisitions of utility companies that were not compliant with the Safe Drinking Water Act of 1974 and the Clean Water Act of 1977. It then improved the facilities of these companies, so that they not only met the legal mandates, but exceeded them. Nowadays Utilities Inc., which is headquartered in Northbrook, Illinois, operates across 17 states, through around 90 or so subsidiaries. It delivers the complete water cycle, meaning that both water and wastewater are provided, to over a million people in total. Under new leadership, Larry Schumacher took over the role of CEO of Utilities Inc. less than a year ago, but he is no newcomer to the challenges of the water industry. Previously a senior manager for Deloitte Touche, Schumacher’s accountancy training has provided him with an eye for the bottom line MAY 2008 execdigital.com and his business acumen has been further sharpened by the rigors of an MBA. He joined Utilities Inc. 16 years ago as director of corporate accounting and was subsequently promoted to the positions of president and CFO, Before moving into his current role.
Improving efficiency
Utilities Inc.’s current revenue levels stand at an impressive $100 million and Schumacher confidently expects this figure to increase: “We are estimating
a growth in revenue of around eight to ten percent,” he confirms. However, there is no sign of complacency. On the contrary, the focus is on continuing improvement. Utilities Inc. is currently undergoing a major re-vamp of its IT systems which is expected to have a positive impact on the streamlining of business processes. “We’ve invested over $15 million"
Utilities Inc.
Utilities, Inc. has invested a total of $160 million back into the business MAY 2008 execdigital.com. Since 1925, Alliant Insurance Services has been a trusted insurance partner committed to providing our clients with the most innovative products, services, and thinking in the industry.As the premier specialty insurance broker in the U.S., we deliver cutting-edge insurance programs to a diverse portfolio of industries, including:Energy and marine ■Healthcare ■Governmental entities ■Real estate ■Construction ■Law firms ■ … and more LOCAL CONTACT:John Munson(312) 546-5608© 2008 Alliant Insurance Services, Inc. All rights reserved. License No. 0C36861 Alliant, the specialty insurance leader.An insurance partner you can trust. A single source for engineering needs Burgin Engineering.
Burgin Engineering. Inc. was established in 1992 to provide consulting engineering services in the area of water and wastewater engineering. Since its founding, the company has successfully completed numerous projects for Utilities, Inc., including projects performed in North and South Carolina, Virginia, Georgia, Louisiana, Maryland and Pennsylvania.
Burgin Engineering’s strength in its areas of expertise relies on the diverse skills of its longtime employees. Its dedicated staff is highly productive, ensuring that all projects are managed efficiently and successfully. The company provides its clients with a single source for their engineering
needs by offering civil engineering, surveying, drafting, and construction management.
In August 2007 Burgin Engineering established a construction management
sister-company called Waterlogic, Inc. This new division provides on-site job services, including overseeing all construction performed as well as giving valuable insight for cost control during the construction process.
Utilities Inc.
in this project,” says Schumacher. “This will enable us to mechanise a number of tasks that are currently operated on a manual basis, which will allow us to make significant efficiencies.” The new system will also facilitate an analysis of the links in the company’s supply chain: “We’re looking to review and enhance our relationships with a wide range of organizations along our supply chain, including chemical suppliers, lenders, legal professionals and others,” Schumacher explains. He adds: “We envisage that our new IT system will enable us to improve our purchasing processes and once it is place we can consider the integration of additional IT tools to further enhance other internal processes.”
Green issues
In the last two years, Utilities Inc. has invested a total of $160 million back into the business in the form of capital improvements. “We’ve deployed the investment through a number of projects throughout the organisation. They are all different, but what they have in common is the goal of improving our services to customers and our commitment to the environment,” says Schumacher. One of the projects relates to the company’s fleet. “We are looking for ways to be more conscientious in our energy consumption, so we are currently testing various hybrid vehicles.” Another example of Utilities Inc.’s green credentials is that it makes effective use of reclaimed water, by recycling wastewater through a highly engineered treatment system. While it is not suitable for drinking, it is often of a higher quality than many existing surface and groundwater sources and is therefore perfect for irrigation of golf courses, nurseries, residential landscaping and other public access areas. " We are estimating a growth in revenue of around eight to ten percent”
-- Larry Schumacher
MAY 2008 execdigital.com
Utilities Inc.
Recruitmement and training
Some CEOs, when asked, might name an acquisition, a deal, or something else they can measure in financial terms, as the company’s biggest
achievement. Not Schumacher. “What I’m most proud of is not easily quantified in facts and figures – it’s our ability to recruit and retain some very talented people,” he says. Utilities Inc. currently employs 500 people, which is deemed to be the optimum level for the moment. “We don’t need to recruit further as we have pretty much the right number of people for what we’re undertaking at Company at a glance Company Name: Utilities Inc.
Established: 1965
Headquarters: Northbrook, IL
Employees: 500
Utilties, Inc. is a holding company for over 75 subsidiary operating companies that provide water and wastewater services to customers in numerous states.
MAY 2008 execdigital.comlenge of having to comply with lots of different regulatory requirements.” The future,looking ahead, it is unlikely that there will be any fundamental changes to the strategic direction of the company: “What makes us successful is quite simple,” Schumacher claims, “we don’t try to expand beyond our core competencies. We stick to what we know best and we know it inside out.” Schumacher also outlines a clearly defined approach to the company’s the moment,” says Schumacher. Staff training is characterized by an emphasis on safety: “As our Chief Operating Officer often tells her staff, we want our employees to go home in at least as good a condition they came to work in, if not better,” Schumacher explains.
Compliance training is another top priority: “We have a lot of rules and regulations in this industry, so compliance are crucial,” Schumacher says, “As Utilities Inc. operates across 15 different states, each with its own jurisdiction, we have the added challenges" We don’t try to expand beyond our core competencies - that’s why we are a success” The company’s portfolio is under review.
Utilities Inc.
target markets: “Our customer base is 90 percent residential and we would describe the remaining ten percent as light commercial. The proportion of this split helps insulate us from the impact of economic conditions on the business market. We plan to maintain this marketing strategy.” There could be some movement in the company’s portfolio of holdings, however, as this is under review. “We will continue to expand in some areas, as we did recently in Arizona, when we acquired Perkins Mountain Water Company, which gave us 40,000 new customers,” says Schumacher: “But we also foresee the possibility of exiting from other states if we conclude there are no opportunities for additional growth.” While he is positive about Utilities Inc.’s plans for the future, Schumacher has some concerns about the state of the water industry as a whole: “It will continue to require a tremendous amount of capital investment,” he emphasises. “The infrastructure needs to be replaced.”
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Utilities Inc.
2335 Sanders Rd, Northbrook, IL 60062-6108
T 847-498-6440 F 847-498-2066 E corporate@uiwater.com
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Energy Exec Magazine May 2008 - Utilities, Inc. - A Thirst For Innovation (PDF)