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March 2003: Volume 45, Number 3

Where Paradise is Never Lost: ClearWater Systems Ltd. of Hamilton, Bermuda
by Ronald Y. Pérez, WC&P Managing Editor

As you trapes through the Water Quality Association (WQA) trade show and convention later this month, you may catch a glimpse of Bermuda’s finest WQA member—and it’s only one. According to the 2001 WQA Membership Directory, ClearWater Systems Bermuda Ltd., of Hamilton, Bermuda, is the island country’s (actually, a group of islands) lone representative in one of the most breathtaking locales in the world.

As proprietor of the five-year-old company, Paul Claude’s journey in the water treatment industry began in his hometown of Eastern Township, Quebec, Canada. Between 1983-85, he was stationed in Bermuda while with the Canadian military. During that time, Claude devised a plan to begin a bottled water company. Coincidentally, he also met his future wife, a Bermuda native. After returning to Canada for a few years, Claude retired from the military, packed his bags, and moved to Bermuda for good in 1991. The Claudes have two daughters, 12 and 6 years old, and one son, age 4.

Currently, the 42-year-old Claude is president and chief executive officer for ClearWater Systems, an independent water treatment dealer. During his tenure, he has managed to accrue 500 customer accounts from a country that’s 20 square miles and home to just under 65,000 residents—quite amazing considering the country was colonized by an English admiral nearly 400 years ago.

A bottled start
Claude’s roots are firmly planted in bottled water: “I actually began in the bottled water industry in 1987 in Canada. I partnered with a few Bermudan entrepreneurs to launch the first bottled water company in the region in 1992. We were primarily a bottled water outlet, but also carried a wide range of point-of-use (POU) filters and under-the-sink reverse osmosis (RO) systems as separate product lines. Our strategy was to secure new business for the bottled water business but, if that wasn’t possible, then try to secure business with POU water treatment products.”

In turn, the business evolved along with the particular dynamics of drinking water availability in Bermuda. For instance, the country is almost entirely dependent on rain as its source of fresh water, Claude claims. Rainwater is collected from the roofs of every home and building, and kept in underground cisterns. There are water lenses throughout the island, but the water is generally very hard and mostly brackish or salty. Utility water tends to also be hard and high in total dissolved solids (TDS). Municipal water feeds the majority of commercial buildings, and is generally used to “top-up” existing cisterns under the buildings. Most of ClearWater’s business derives from commercial applications for small RO, undersink systems to remove sedimentation, TDS and many other contaminants so as to provide offices with purified water for drinking, ice and coffee-making purposes.

In the household
Meanwhile, most of the business for household applications is for combination sediment, carbon and ultraviolet (UV) water treatment systems. The water collected in residential cisterns is generally quite soft and good, but is susceptible to contamination from pollution that lands on the roofs, bacteria and decomposing vegetation; therefore, combination sediment/carbon/UV systems are ideal for the market. Most of Clear- Water’s business for industrial applications involves the engineering, sale, installation, and maintenance of brackish and seawater RO plants for large and small guest hotels as well as multi-dwelling properties. The business also uses chlorination, UV and filtration for large building complexes.

Many of the manufacturers that ClearWater utilizes are based in the United States including CUNO Inc., Hydrotech, Pura, Flowmatic, Oasis, Crane Environmental and, more recently, Spectra Watermakers and Advance Membrane Systems.

Despite the seemingly great extent of commercial and industrial work being conducted by ClearWater, Claude says that home is where the sale is. He explains, “I would have to say the household market is the fastest growing segment mainly because people have become much more conscious of water issues with various news stories that made headlines in the past few years.

“People are asking more questions, and realize the importance of drinking clean, safe water. I would say we are evenly distributed between residential, commercial and industrial in terms of revenues; however, the greatest potential lies in the residential market for the foreseeable future.”

No matter what business segment ClearWater may call its bread-and-butter, the revenue numbers seem to paint a picture of a healthy company. Clear- Water experienced a 35 percent growth in revenues last year over 2001, which was almost identical to the previous year in terms of growth rate. Claude anticipates 20-30 percent growth in 2003.

He’s quick to identify people skills as an important factor in keeping customers happy and has a strong staff driving the bottom line. In all, the business has seven full-time employees and three on retainer as consultants. Claude describes himself as a “jack-of-all-trades” involved in general management, sales and marketing. In addition, ClearWater boasts three senior installation and service technicians (mainly for commercial, industrial, and large household system installations and maintenance); two installation and service technicians (primarily for undersink systems installation and maintenance); one customer support manager, and the three consultants—a full-time engineer, a part-time bookkeeper and a part-time accountant.

On an island
Being from a rather remote locale presents a give-and-take of sorts for Claude and ClearWater. On one hand, in such a small market (though Hamilton is the capitol of Bermuda), very little competition exists and this saves on some expenses such as advertising, marketing, etc. Still, businesses have a very small talent pool for hiring purposes. After all, it’s rather difficult to ask that prospective certified installer from Miami to make the commute to work every day.

“Our biggest struggle lies in recruiting the right staff from a limited, highly regulated pool of employees,” he says. “Bermuda protects the job market for its people and rightfully so, but that makes it very difficult and expensive because there are very few water treatment specialists available in this market.”

To offset the conundrum, Claude relies on optimum customer service and a growing reputation. As time goes on, people feel more comfortable ClearWater will be around for a long time into the future. Among his competition, “big box” stores have captivated his attention. How does he confront this growing phenomenon? “No. 1 is providing impeccable customer service, superior expertise, responsiveness, and high quality workmanship coupled with the word-of-mouth that these generate,” he says. “The water treatment business requires expertise and a sound knowledge of the products and services involved, and that’s something the ‘big box’ retailers cannot afford to provide with advertising alone.”

Power of experience
When you listen to Claude, you’re reminded that—although he has run his own business for only five years—his experience in the bottled water business (16 years) comes to the fore and will benefit him and the business in spite of a rather difficult market.

“I think that we have a winning combination of great products, excellent services, and a highly motivated customer focused staff. There is only one way we can go with that, and it’s up!” he exclaims. “We do have a limited market in this small island, but I think we have a blueprint for success with our business model in other island jurisdictions and, in the near future, we will be actively pursuing opportunities and partnerships to make this happen.”

Another key to networking possibilities and potential growth and opportunities, Claude claims, is the WQA and its trade shows and emphasis on educational meetings. As a WQA member for four years, it makes him come back for more of everything. “I love going to the shows every year,” he says. “I am very keen on the educational side that the WQA offers. We’ve moved a bit slowly at getting ourselves certified, but this has been more a result of the tremendous growth we’ve had to manage these past few years as opposed to a lack of desire. We will have a few technicians certified this year, and get everyone else involved in studying toward certification.”

Conclusion
Claude was a certified plant operator from his days in the bottled water industry so he knows something about certification. All of ClearWater’s technicians are certified or experienced plumbers. His plan is to get all employees certified as water specialists within the next three years starting with two people being tested at the WQA show in Las Vegas this month. So, if you plan on spotting Bermuda’s lone WQA member, you may want to check the educational session rooms at the Las Vegas Hilton.

ClearWater Systems Bermuda Ltd.
12 Church Street, Ste. 105
Hamilton, HM 11 Bermuda
Tel: (441) 296-7355
Fax: (441) 296-7388
Email: clearwater@ibl.bm
Website: coming later this year

Founded: September 1997

President and CEO: Paul E. Claude

Staff: 7 full-time employees and 3 consultants

Revenues: Expected 25-30 percent jump over last year

Quotable: “Water is the most valuable resource on Earth, and it’s getting more and more polluted every day. The water treatment industry is, and will continue to be, critical in developing new technologies, products and services to keep up with the world’s demand for clean and safe water. There’s only one way this industry can go with that, too—way up!”

Paul E. Claude