Volume 44 Number 8
Barnstorming with Pro Products’ Robin Barna
The corn is high and dry in the fields surrounding Fort Wayne, Ind., at this time of year. Amidst that golden hue, though, Robin Barna found a different treasure in the rapid growth of Pro Products LLC.
Pro Products began as a wholesale division of Iron Out Inc. in 1994. The division sold potassium permanganate and sodium hydrosulfite as cleaners for filters and water conditioning resin. In 1999, the division established itself as a standalone company, even though Iron Out's Joe Harter remains as president and owner of both.
Before Iron Out, Barna, a Kalamazoo, Mich., native, had worked in chemical sales for his own company, which he sold to Harter in 1989. An Indiana University business school graduate, he then joined the company and handled major retail accounts.
"I was selling to the Home Depots, the Lowes? Ace Hardwares and True Values," Barna said. "I'd rather sell to the down-home folks, the dealers and OEM market (in water treatment)."
He credits a now-retired Iron Out national sales manager Ed Snell with convincing him he'd find it more satisfying.
"He was in that side of the industry for a lot of years and always enjoyed the people and told me I would very likely find it worthwhile working with those people also. He was right? I'm from the Midwest and I was in big business. I like small business better than big business."
Pro Products has doubled in size since separating from Iron Out. It's PRO line of six products in 1994 has grown to more than 20 in 45 different packaging configurations. Among new products this year are hydrogen peroxide, calcite and a neutralizer blend. It also has made two acquisitions?Merit Labs, its major competitor out of Grafton, Wis., in November 2000; and the water chemicals division of Virginia Technical Products, of Portsmouth, Va., earlier that year.
"Our goal is to be the chemical supplier for one-stop shopping, one that would have all the chemicals a water conditioning dealer would need (to buy) from just one company," Barna said. He points out that quality in most water chemicals is generally fairly consistent, so the market revolves on price competition mostly. Pro Products, however, became ISO 9001:2000 certified in May 2002, offering it an advantage of having earned a reputation for higher quality products.
As for trends, he sees the industry continuing to consolidate, which puts pressure on companies like Pro Products to grow as well "to stay on top." The biggest impact he sees over the next few years will be government regulations, which his company keeps a close eye on in terms of the impact on its clients, the water softening dealers and equipment companies that supply them.
Before getting to the interview itself, here are a few details on Pro Products:
Pro Products, LLC
Established: 1994 as division of Iron Out, 1999 became independent company
Revenues: Annual double-digit growth since inception and doubled overall since 1999
Products: Water treatment chemicals and cleaners for commercial/industrial and residential use, focusing on iron filter, water softening and conditioning equipment
And now for the interview:
WC&P: How long have you been in the business and how did you get started?
Barna: I've been in the business about 12 years. I got started on the retail side with Iron Out in its retail division in 1989. Then, in about 1994, Iron Out wanted to get into the wholesale and private label business. It launched a new division. That's how the Pro Line of Water Treatment Products got started.
WC&P: Is that Water Treatment Products a company?
Barna: Yes, it was a division of Iron Out. Then in 1999, they split that off into a separate company. That company is Pro Products, LLC. That's a new corporation with its own production facilities, sales staff and its own building.
WC&P: How big is your facility?
Barna: We're at 20,000 square feet. That's what we started with.
WC&P: Will you be needing additional space any time soon?
Barna: I'd say within the next two to three years, we'll be looking at an expansion.
WC&P: Where are you at in Fort Wayne?
Barna: We're just north of the city off of Interstate 69 between Indianapolis, Detroit and Chicago and Toledo, Ohio.
WC&P: I did a reporting internship at one of the newspapers there, the Journal-Gazette, right after I graduated from college.
Barna: Really. I read it.
WC&P: How big is your staff?
Barna: Right now, we have about 12 people on board.
WC&P: Are you still affiliated with Iron Out?
Barna: No. The only connection is that the family that owns Iron Out also owns Pro Products.
WC&P: What's that family?
Barna: Joel Harter, he's the president.
WC&P: What's your title?
Barna: I'm vice president and general manager.
WC&P: Tell us a little bit about your company in terms of what's new. What new products or services are you offering? Are there things you have planned or that will be coming out later this year or next year?
Barna: Time-wise, I'd like to talk about a couple other developments that have occurred recently. In the year 2000, we acquired Merit Labs, out of Grafton, Wis. Merit Labs was a competitor that specialized in private label water treatment chemicals. We acquired them in early 2000. That was our second acquisition.
WC&P: Your first one being??
Barna: It was a muncipality private label brand in water treatment chemicals.
WC&P: What was the name of that?
Barna: Virginia Technical Products.
WC&P: It was located where?
Barna: Portsmouth, Va. We bought the water chemicals division and it later sold the rest of the company to another group.
WC&P: When was that?
Barna: That was the beginning of 2000. Both acquisitions were in 2000.
WC&P: What month was Merit Labs?
Barna: That was in November 2000.
WC&P: So, about January/February (for Virginia Technical Products) and then November.
WC&P: Did you just consolidate everything there in Fort Wayne?
Barna: Right. We brought everything from Wisconsin into our building here.
WC&P: Any employees come along?
WC&P: Why did you go after these two particular companies?
Barna: To make our presence larger in the water industry. Our goal is to be the chemical supplier for one-stop shopping, one that would have all the chemicals a water conditioning dealer would need, buying from just one company. A lot of times in this industry, you would buy a water softener cleaner over here, an iron filter cleaner over here, a citric acid cleaner over here, soda ash over here. What we do is we have over 25 different products that you can buy from one place, one spot. So, that's kind of the reason why we formed Pro Products.
WC&P: Do you distribute products from other companies as well to fill out a broader line?
Barna: The only product we distribute through the wholesale end is we distribute products made by other companies with our name on it.
WC&P: Those include products for iron filters, etc.?
Barna: Yes, but we do distribute chemicals also.
WC&P: For membrane cleaning and things like that?
Barna: Not so much membrane cleaning. What sell for water softener cleaning, iron filter cleaning. We get into trouble water chemicals, like chemicals you'd use for acid water, for tannins, rust, iron, impurities?
WC&P: Do you have an interesting story or anecdote about your experience in water treatment? It could be something offbeat, funny, irregular?
Barna: Y'know it's hard to pin that down.
WC&P: Even if it was how you got involved and someone who convinced you that "Hey, this is a field that you can make a career out of!" Who was the person that did that for you?
Barna: A guy who's always been in this industry. I suppose I wanted to go into the water industry because there's just good people -- good, honest, down-home people. I'm from the Midwest and I was in big business. I like small business better than big business.
WC&P: What were you doing before?
Barna: I was selling to corporate America. I was selling to the Home Depots and the Lowes?
WC&P: In water treatment?
Barna: No, on the retail side in chemicals. The ACE Hardware, the True Values? So, I'd rather be selling to the down-home folks, the water treatment dealers and the OEM market.
WC&P: Any stories about some of those sales or interesting, funny people you've worked with?
Barna: You could mention Ed Snell. Ed was an old-time Iron Out guy. He's the one that kind of convinced me that water conditioning was kind of a good industry to be in.
WC&P: What was Ed's position at Iron Out?
Barna: He was the national sales manager.
WC&P: He's no longer with them, I take it?
Barna: He retired in about 1995-96.
WC&P: What did Ed say to you that was so inspiring?
Barna: Nothing specific. He was in that side of the industry for a lot of years and always enjoyed the people and told me I would very likely find it worthwhile working with those people also. He was right.
WC&P: What's a major challenge your company faced and how did you overcome it? For instance, you might discuss being a small company and the challenge of merging two other companies with it in the same year.
Barna: Well, when we first started our division, we had only two products. We sold potassium permanganate and sodium hydrosulfite resin cleaner. The second is a mixture between sodium hydrosulfite and sodium bisulfite. The first is for cleaning manganese greensand filters. Those were our two products we sold to the industry. So, when we first came out as our own company, we brought out six more products. Our basic challenge is to be that one-stop supplier for all the dealers and OEMs, to bring out products that are needed by the dealers in the industry so we can stay on top and be the one place that people think of when they think of chemicals in the water industry. The challenge was to build a division into a company, only starting with two products. Now, we have over 20 products. We have over 45 different skews.
WC&P: By skews, you mean what?
Barna: Skews are when we have one product that's packaged three different ways?1.5-pound, 5-pound, 10-pound packages. That's part of the challenge, putting chemicals in the right size container?
WC&P: For the needs of the customer?
Barna: Right. Another challenge was bringing Merit Labs into the fold, as you mentioned, which allowed us to get into the private label business ourselves.
WC&P: How big a competitor were they?
Barna: They were probably our largest competitor.
WC&P: Is there anything unique about competition in this segment of the water treatment industry?
Barna: It's real price sensitive.
WC&P: Everybody's pretty consistent on quality, so you've got to compete on price?
Barna: Right. Quality's pretty consistent so we try to sell to the highest quality. Like our potassium permanganate is NSF-approved, but it's also USA-made. There's only one plant in the United States that makes potassium permanganate. We choose not to buy the foreign material.
WC&P: Why not?
Barna: It's just the quality of the foreign material.
WC&P: Where's the only U.S. plant that makes potassium permanganate?
Barna: It's owned by Carus Chemical.
WC&P: One of the things that might be good to mention at this point is your position in the marketplace in terms of you're such a percentage of the market and maybe your sales have grown to a certain level?
Barna: I would think we've doubled our size since we started Pro Products. We've grown at double-digit increases each year.
WC&P: What about your revenues? Where are they at these days?
Barna: Since we've started in 1989, it's doubled. Again, it's been double-digit increases each year we've been in business.
WC&P: From your perspective in the market, where do you see the industry going?
Barna: I don't know if I want to stick my neck out to actually say where I think it's going?
WC&P: That's what this is all about, though.
Barna: I know (laughs). Well, I think the industry is changing. Where it's going, I'm not sure. I think it's going bigger and not smaller. The bigger are getting bigger, y'know, just like in all the other industries. I think the big guys are going to continue to get bigger. And we want to make sure we stay with the trend to stay on top.
WC&P: How has your market size changed geographically?
Barna: Well, we sell all over the United States and Canada.
WC&P: Before the acquisitions as well?
WC&P: Are there areas that are stronger than others? And have the acquisitions strengthened you in other areas?
Barna: Well, I think the Midwest and East Coast, it definitely helped us. I could also mention some new things we're doing that have also helped us.
WC&P: Go ahead.
Barna: A lot of people are now using peroxide more in the industry, so we brought out a 7% peroxide solution.
WC&P: Hydrogen peroxide.
Barna: Yes, that's used in some of the new equipment coming out in the industry and some of the changes going on in the market. As the industry changes, we try to change with it. We know that we've had some calls for it and this is the next biggest thing in the industry.
WC&P: What's it used for?
Barna: It's used for hydrogen sulfide. A lot of people are opting for this instead of chlorine.
WC&P: Why's that? To avoid trihalomethanes and other disinfection by-products?
Barna: Well, they're using this because a lot of people think it's easier to use and works better.
WC&P: I take it sales have taken off?
WC&P: Who do you get your supply from? Solvay Interox?
Barna: You're familiar with Solvay?
WC&P: We get news releases from them on occasion about price hikes for hydrogen peroxide.
Barna: Oh, yeah. Right now, we're having it private label packaged for us and we're looking into packaging it for ourselves. We have a couple of other interesting new products. We're also packaging calcite now in three different sizes.
WC&P: Now, refresh me, please. What's calcite used for again?
Barna: Calcite is used for acid water.
WC&P: To raise the pH?
Barna: Right. And we have a neutralizer blend, which is also for acid water.
WC&P: Now, when you say new, does this mean they came out this year?
Barna: Right. Well, we've had the calcite, but I like to mention it. There's also the hydrogen peroxide (and) neutralizer blend, which is a blend of calcite and magnesium oxide. Then we have magnesium oxide, which we're packaging as well.
WC&P: Now, who buys these products -- dealers?
Barna: Dealers and OEMs. It's a replenished product. They have to replenish their equipment with it.
WC&P: Are they using it in what sort of instances?
Barna: Acid water, mostly.
WC&P: So is this for commercial/industrial customers?
Barna: Oh, residential, too. It's big time in residential out East. The water passes through the calcite, the calcite dissolves and changes the pH.
WC&P: This is for areas with very naturally low pH water then?
WC&P: What's the one hot-button issue facing water treatment dealers or the industry that will have the most impact in the next few years from your perspective?
Barna: Government regulations. I don't know about federal so much as state and local. California is always on this. It's always on the cutting edge. You see things there all the time going on before you see them elsewhere. State and local issues are very important.
WC&P: How has this affected you?
Barna: It really hasn't at this point in time, unless sales of softeners start going down because of the local regulations.
WC&P: Do you have any restrictions that get put on you too as far as these regulations.
Barna: Not at this point in time. We're always aware of the topic.
WC&P: You're very concerned about how it will affect your client, however?
Barna: Right, particularly with the sale of softeners and water conditioning equipment, because that's where our sales of chemicals go to?
WC&P: Are there other areas in the country where you see some of those issues popping up?
Barna: They pop every once in a while in different states.
WC&P: The type of thing you're talking about would be what kind of regulations?
Barna: Plumbers licensing to put in equipment, discharge from water softeners, local building codes, different licenses and permits that make it harder for the dealers to do business.
WC&P: Do you do any business internationally?
Barna: Not very much, no.
WC&P: Just primarily Canada?
WC&P: A little Mexico, maybe?
Barna: Once in a while, we ship something down to Mexico. I'd say you can say Canada, U.S. and Mexico?North America.
WC&P: Anything else you'd like to add?
Barna: No, not at this time.