Volume 44 Number 11
Durda Fills Niche at Aeration Industries Int’l
Aeration sounds like a simple topic but has as many complexities as can be multiplied by the number of constituents in air -- or water, for that matter.
Ask Dan Durda, president of Aeration Industries International, which he founded in 1974 with his father, Joseph, in Minneapolis. The elder Durda died in 1990, but the business continued to grow such that it's now the largest surface aeration equipment maker in the world with nearly 50,000 aerators in operation in the field today.
Now, mind you, these are not residential aeration systems -- although Durda points out the basic mechanics and theories are the same. Instead of radon, iron, hydrogen sulfide or arsenic, targeted treatment is broader focusing on biological oxygen demand (BOD), volatile organic compounds (VOC), denitrification and phosphorus reduction. Systems range from 10,000 gallons a day to millions of gallons a day, but the focus is largely on smaller systems.
Aeration Industries started out aerating lakes in Minnesota, which meant a wide open market considering the state motto of "Land of 10,000 Lakes." Gradually, it moved into municipal and industrial water treatment, the latter including pulp and paper, dairy and food processing, refinery, chemical, and pharmaceutical plants. Its business is 60 percent industrial, 30 percent municipal and 10 percent in aquaculture applications. It employs 50 people at its Minneapolis facility, mostly for assembly work since manufacturing is largely outsourced. Sales, about evenly split between domestic and international clients, are coordinated through a network of about 100 independent manufacturer representatives.
Its anchor product, the AIRE-O2 aspirator aerator system, has almost become synonymous with aeration, according to Durda. The latest version, the Triton aerator mixer, was released three years ago. More recently, it's come out with the Tri-Oval and Unisystem, which combine compact ditch oxidation with a monitor and control system for remote monitoring. He sees this as the future of the market because it reduces reliance on less highly skilled operators, introduces greater efficiency and allows for better security -- the sense of need for which has grown exponentially since 9/11.
"We see -- regretfully, out of the carnage of the New York tragedy at the World Trade Center -- that this could be an excellent opportunity with remote monitoring now for security aspects," Durda said. "… We're (also) very excited about this remote monitoring because it moves us now into the service side of this industry."
He feels a sense of pride his efforts have made the world a bit cleaner and more environmentally friendly. Still, he maintains a sense of levity, telling a story about a Colorado official asked to give a report to the city council on how the city's water supplies were affected by the drought and ongoing pollution.
"He said he had some bad news and some good news to report," Durda related. "The bad news was that, if the city continued to pollute at the rate it was, all the citizens would soon find themselves drinking reclaimed sewer water. But the good news, he said, was there wouldn't be enough to go around."
Now, before getting to the interview itself, here are a few details on Aeration Industries:
Aeration Industries International Int'l
Management: Daniel J. Durda, president; Jandre Doulenns, vice president/business development; Bill Randall, vice president/technology; Henrik Blichfeld, vice president/sales
Staff: 50 in-house; 100 independent manufacturers' representatives
Revenue: Mid-eight-figures range with an average 8% annual growth
Products: Manufacturer of aeration equipment for wastewater treatment -- under the AIRE-O2, Triton and Turbo brands -- for commercial/industrial and municipal small systems applications.
For more resources and hyperlinks on aeration technology, readers should see theEXTRA sidebar at the end of this article. Meanwhile, here's the interview:
WC&P: How long have you been in the water treatment industry?
Durda: We've been in the business since 1974.
WC&P: How did you get started?
Durda: Actually, we started out by aerating lakes here in Minnesota, which is the "Land of 10,000 Lakes." So, that was really the genesis of the business and we gradually moved into municipal and industrial water treatment, after a number of engineers saw our equipment running in these severe Minnesota winters.
WC&P: With "10,000 lakes," I imagine you have basically a wide open market?
Durda: Our principal markets are both industrial and municipal wastewater treatment. Under the industrial, it's pulp and paper, food processing, refineries, chemical, pharmaceutical plants and a host of other sub-industries.
WC&P: Is there a split between industrial and municipal?
Durda: Yes, we do about 60 percent industrial, 30 percent municipal and the remaining 10 percent of our business is in the aquaculture industry.
WC&P: When you first got started, what were the early years like?
Durda: Well, very exciting. Our technology -- the AIRE-O2 is what we marketed it as -- was a complete departure from existing technologies that were on the market already. It was primarily diffused air or surface-splasher type aerators that really were what was the available technology at the time. So, we had a product differentiation that was very clear and it was very exciting when we introduced it. Those early years were discovering new types of applications and the successes we experienced from that. So, it was really exciting then.
WC&P: What was the goal? What were you treating?
Durda: Initially, again, cleaning lakes to start with. And then we got into the municipal wastewater business in about '76-'77. And it was after that point that we began moving into different industries in different towns. Being in the Midwest, there were a lot of dairies up here. We sold a lot of equipment to dairy and food plants.
WC&P: What were you aerating? What were the contaminants being removed?
Durda: Well, the wastewater from those plants in food processors, there was potatoes, vegetables, strawberries, beverages… breweries, a lot of cheese plants with residual waste such as the whey that is produced.
WC&P: You are very close to Wisconsin, the cheese state, after all.
Durda: Yes, those were the types of pollutants in the water, the BOD (biological oxygen demand) -- bringing it down and arresting the odor problems often associated with these plants.
WC&P: Tell us a little bit about your company and what's new?
Durda: We've been doing a lot of things of late. We've grown from a single product company to a multi-product company today where we have not only aeration equipment and variations of the technology, but we have a breakthrough in our technology. We call it the Triton. It's a dual-process aerator/mixer device that's the only process aerator on the market today. And that's been growing at about 110 percent compounded annual growth rate. That would be available up to 75 horsepower.
WC&P: When did you introduce that?
Durda: We just introduced it about three years ago.
WC&P: Does it have a particular niche market or target market?
Durda: The same markets. We're seeing that the industry and the EPA is starting to place more emphasis on phosphorus removal. And in order to do that, it's going to require some two-step process vs. a traditional just aeration of ponds or tanks, whatever. Beyond that, we also have evolved into a process company.
WC&P: By that, you mean?
Durda: We design and build and engineer what we call our Tri-Oval wastewater treatment plant and our Unisystem, which is a combination of unifying different technology to a single system. So, it's a turnkey process. When we first started out, we just did lagoons. Today, there's a lot of places, a lot of companies that maybe don't have the land to build a lagoon, so you can basically put one of these package plants in their parking lot almost.
WC&P: Now, this is a far cry from the aeration that the majority of the people that read our magazine look at regarding aeration systems for potable water, particularly residential systems. The principles, though, are the same just on a larger, varied scale, correct?
Durda: Yes, I would say it's close to the same. A few things are different, but basically it's conditioning of the water so that it can be released into a receiving stream or be reused. From that sense, it's very similar. And what's very new for our company, not only those two things, the Triton and the Tri-Oval, but the remote monitoring. For many plants, both potable water and wastewater, there's a shortage of plant operators. And we are now providing remote monitoring services. We actually have three contracts now where -- through the technology of computers and probes that are available today -- we can actually run and monitor the activities of a plant 24 hours a day, seven days a week.
WC&P: Where are those three contracts?
Durda: Here, they're all in Minnesota for starters, which is real nice because its close.
WC&P: How many employees do you have?
Durda: We have about 50 here. We outsource much of what we do. We're basically an assembly house, so I've avoided getting around hiring all the manufacturing people. We market through manufacturers independent representatives and we've got about 100 of those. So, working independently with those groups, we probably have about 200 people involved.
WC&P: How do you want to indicate your revenue?
Durda: Well, let's see. I guess you'd say we were in the mid-eight figures. The reason I'm reluctant is we're a private company and we've sort of spawned a mini-cottage industry -- people who are doing various degrees of look-a-like product or knockoffs of our product. So, I don't usually share much information anymore.
WC&P: That's fine. I understand that. What sort of percentage growth have you been experiencing per year on average?
Durda: We've been growing about 8 percent a year.
WC&P: OK. Now, who are some of your vendors, where you get product from?
Durda: Well, it's actually made to our specifications, so the only vendors you'd know by name would be for motors like Reliance or U.S. Motors or Baldor. That's about it. Otherwise, the rest of the stuff is all made to our specifications and they're not vendors that anyone would just go to.
WC&P: Are you having it made in the states?
WC&P: You're the president, but who are your next in command?
Durda: Jandre Doulenns is vice president of business development, William Randall is technical vice president, and then our vice president of sales is Henrik Blichfeld. Jandre speaks French and Spanish, a little Portuguese, and English. Henrik speaks Danish and English. We also have a regional sales manager that actually lived in Thailand and speaks Thai and Chinese.
WC&P: What's the geographic spread of the business that you do?
Durda: We're a national and international company. We have equipment and installations in every state in the union and 70 countries worldwide. We are by the way, I should mention, the largest surface aeration manufacturer in the world, with approaching 50,000 aerators in operation in the field today.
WC&P: What are some of the sizes of these that you do? For instance, our readers may be interested in likely the smaller systems since they're more apt to be working with smaller communities.
Durda: Smaller communities are where we're focused. Our market's not New York City or Tampa Bay or Chicago or those places. It's Middle America. We have small systems down to 10,000 gallons a day all the way up to pulp and paper plants that may have as much as 25-30 million gallons a day flow. So, there's a big variation there.
WC&P: Do you have any interesting anecdotes or stories about your experience in water treatment? A couple examples mentioned in the past were a pig farm where the hogs slogged into an unfenced pond supplying the farmhouse with water, got stuck and died -- polluting the water. That was a bit interesting, if not shocking.
Durda: Geez. Well, we do aeration systems for hog farms and other livestock operations.
WC&P: Another was an executive who'd been approached several times by dealers wanting to sell him their businesses and within a year later suffered heart attacks. We call that "an arresting development." So, what's a story you tend to repeat from time to time about your experiences?
Durda: Well, in fact, this was several years ago -- and it wasn't so much an issue here in Minnesota because we were deluged with rain recently -- but there's been a drought across the country. Quite a bit of that, of which I'm sure you've heard. One of the stories I'm reminded of is about a city official, though I can't remember whether it was Colorado or even here in my region. He was asked to make a report to the city council members regarding the condition of the water supply and sources given the drought and ongoing pollution and so forth. He said he had some bad news and some good news to report. The bad news was that, if the city continued to pollute at the rate it was, all the citizens would soon find themselves drinking reclaimed sewer water. But the good news, he said was there wouldn't be enough to go around. That's one of my favorite stories. It kind of says it all in a nutshell.
WC&P: Definitely. Now, correct me if I'm wrong but, in browsing your website, I seem to recall reading that you started the business with your father.
Durda: That's correct.
WC&P: He's no longer with us, though.
Durda: No, he passed on in 1990. We started together aerating lakes. It really went back as far as 1972, but we incorporated in 1974.
WC&P: Timing everything with the creation of the USEPA and the Safe Drinking Water Act?
Durda: Yes, I was doing a lot of volunteer work. I'd just gotten out of college in 1971, which is when I graduated. And that period of time, there was the Vietnam War, the social movement of the civil rights effort, and the environmental movement…
WC&P: I believe it was called "ecology" then.
Durda: Yes. And I was really into that. My father at the time was on the economic development committee for the state of Minnesota here. An elderly gentleman had come to that committee to try and find some money to help found a factory so he could build these aerators that had something to do with cleaning up water. My father knew that at the time I was interested in that kind of thing and asked if I'd like to meet this guy. I said, "Sure, that'd be great." So, that was 1972 and the gentleman at one time had been the mayor of Rhinelander, Wis., and he was in the DNR -- the State Department of Natural Resources. I mean he was a real eccentric kind of guy. Never had any kids and kind of took a liking to me. I was 23-24 years old and he was in his 80s at the time. Obviously, the state wasn't going to give him any money, but we got to know each other very well. I was extremely intrigued with what he had, so he and I and my father basically started the company at that point in time. He probably died a year after we met him and the machine that we basically had was the forerunner of what we have today, but it was quite primitive. It was probably what the Monitor or Merrimac would look like compared to the Nautilus or Thresher would look like today.
WC&P: Or a Los Angeles class submarine…
Durda: Yes. So, that's kinda how it all got started. We really got into this thinking, you know, it was a good feeling. It all felt good. You're wearing a white hat -- that kind of thing. I'm proud to be in the industry I'm in 'cause I feel good everyday that we're doing something for humanity every time we sell one of these machines and put them out in the field. Although, when you are in the business day to day, there's warranty issues, there's collections, there's all the things that go into running a business…
WC&P: You can sometimes forget what it is you're doing it all for…
Durda: You forget about the good part of it. And so I like to remind myself and my employees from time to time: "You know, we're helping this planet to be a better place for all of us." That's kind of my reward in the end.
WC&P: What's a major challenge that you and your company faced and how did you overcome it?
Durda: Did we face or will we face?
WC&P: We'll get to "will" later.
Durda: I think probably as any fledgling startup business, probably the most difficult challenges have been structuring of the business and all its incumbent categories in terms of financing the business. Bootstrapping it, basically. This was a family founded business. We never went public. We never had access to large sums of capital. With that and all the things that go around with being undercapitalized and so forth and trying to develop and grow a business -- to get as far as we did internationally speaking, we're pretty proud of it. Our name, the AIRE-O2 aeration system, is almost as well known in our industry as certainly Coke is in theirs. You go around and ask for a Coke, you're asking for that kind of a soda basically. And people identify or ask for aeration systems as AIRE-O2s now. In fact, there's a lot of people that know our company as AIRE-O2 and not as Aeration Industries. So, I think those challenges are just all those little things that involve taking an idea to a reality.
WC&P: You mentioned international again. How much of your business is international?
Durda: It'll vary from year to year. But, I would say for the last seven, eight or nine years, it's been about 50-50.
WC&P: Are there particular markets where you're doing more business or experiencing better growth than others?
Durda: You mean national markets?
Durda: That moves around a little bit. One year, we may do real well in Europe. Another, we do well in South America. South America has gotten much better in recent years because of NAFTA.
WC&P: I would imagine aquaculture is a big reason as well, considering all the shrimp and fish farms.
Durda: Yes. Our aquaculture business has always been pretty consistent. It's very, very competitive, but that moves around a lot.
WC&P: So, you're saying NAFTA has improved prospects for the entire region, not just Mexico?
Durda: I think so, oh yeah, for sure. Of course, we've always been out there. We started our international business probably 20 years ago. We got very serious about it in 1985. So, we've been in it well over 15 years on the international side. China we now see as a very good opportunity for us. We've been doing very well over there.
WC&P: From your perspective in the market, where do you see the industry going?
Durda: More towards turnkey systems.
WC&P: Would you want to elaborate a little bit?
Durda: As I'd mentioned, our Tri-Oval systems are an example. You've probably heard the expression. It's a bit overused. It's a one-stop shopping kind of thing. I think you need to offer for the customers more than just a piece of equipment. Although we still sell a lot of pieces of equipment, I think the companies that can provide more solutions are what's most sought after.
WC&P: I was just thinking that as a mantra I've heard lately -- providing solutions rather than just equipment.
Durda: That's true. And we're very excited about this remote monitoring because it moves us now into the service side of this industry. We see -- regretfully, out of the carnage of the New York tragedy at the World Trade Center -- that this could be an excellent opportunity with remote monitoring now for security aspects. Rather than us come in and say simply, "We can help you run your plant more efficiently" -- there's more interest. You see what's interesting with this industry, and that just absolutely amazes me about it, is you have all these engineers with a minimum four-year degrees. And many, you know, have a P.E., which involves five years of training, like a residency, to become a professional engineer. Then, many of these engineers have master's and Ph.D.s. With all of the work and the thought and the skills and biology that go into making a water or wastewater treatment plant work, many systems can be hundreds of thousands to multi-million dollar systems. At the end of the day, though, they turn it all over to a guy with a baseball cap and a screwdriver in his back pocket -- and he's the guy responsible for making it all work right. It just amazes me that these guys are really not adept. They're expected to be mechanics, electricians, biologists and engineers, but they simply aren't. A huge onus is being placed on them. So, we see it as an opportunity, I believe, going forward that the remote monitoring will help these plants to optimize the way they're operating and with the security needs since 9/11 -- they tie together. We're working right now with a very large security firm -- and we hope we're in the final stages of negotiating with them on that -- so we can provide the whole 24-7 monitoring needs.
WC&P: Not only are you providing remote monitoring, but you'd provide security such that no intrusions would be allowed. Kinda like a computer firewall system?
Durda: We're tying all that together. It's interesting that this industry has not been well known for its service capabilities. It sells its capital goods. They sell the stuff once and that’s it. Nobody's really around to service these plants. And, you know, there's been -- since 1972 and the passage of the Clean Water Act and the funding of the Construction Grants Bill -- billions and billions of dollars invested in this industry. And basically everybody's walked away from it waiting 'til they have to go back and upgrade them or something. Well, that's all fine and dandy, but a large reason why a lot of these plants go out of compliance is that they're really not designed correctly anymore. Moreso than that, they're not run very well.
WC&P: For the previous reasons you mentioned.
WC&P: That may tie in well with the last question, which is what's the hot button issue facing the water treatment industry that will have the most impact in the next few years, particularly for those people to whom you're selling your equipment?
Durda: That, I think, is going to be the continued funding and commitment of the Environmental Protection Agency to enforce its regulations and to monitor for the legislation that's been enacted over the past 30 years.
WC&P: You'd mentioned a lot of the small operators and, for the segment of the industry that our magazine covers, i.e., the majority of readers, the Water Quality Association is representative association. Even there, it's being approached to offer operating training for these small systems. It's been working closely with the state of Illinois for the past few years to develop such a program. It's even created a Water Quality Society to bring them into the organization and create educational opportunities for them, expand their professionalism and create links between the water equipment manufacturers and the operators themselves. Do you provide training?
Durda: We're not really a training organization. We find ourselves positioning ourselves in ways we've always done. We work very closely with customers and engineers. Whenever we've had a problem site -- and everybody has one from time to time; at any given time, you've got a site that's an oddball one; none of these plants are the same -- we've always stayed with the customer and worked through every possible way to solve the problem for them. I see us continuing to provide that kind of service in the future via the remote monitoring. That will be our training, to work with and assist the client. Again, it's kind of back to school book kind of stuff. We're talking about us being a participant with the operator, city superintendent or whoever it might be in the day-to-day issues that may be bothering him or creating difficulties at his plant.
WC&P: In this case, there often are state health or environmental or natural resources departments that are responsible for ensuring proper education and certification of operators of these facilities.
Durda: Yes, that's usually left up to agencies like that, state agencies or operator associations. We don't want to be a training organization. What we will do training on is how to use, operate and maintain systems, mainly our own for our own promotion. But, what we see our role as -- if we go to a town 10 miles away or across the country in helping them to run their plant -- is not a consulting engineer but we're going to be like that sounding board for the plant operator or superintendent on day-to-day issues on running the plant efficiently.
EXTRA: Aeration & Air Stripping
* Technical Bulletins, Environmental Dynamics Inc.: www.wastewater.com/TechBulletIndx.html