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USALCO Increases Its Capabilities Through New Acquisition
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SALCO is a chemical manufacturing firm whose products are used widely in the municipal water treatment field. It recently acquired the companies AlChem and CalCHEM, gaining two new plants, new capabilities, and a new geographical range. In this interview, USALCO Vice President of Sales and Marketing Terry Badwak tells Municipal Water Leader about the company’s history and current growth. Municipal Water Leader: Tell us about your background and how you came to be in your current position. Terry Badwak: I started working for a company called Delta Chemical Corporation in 1989 in a sales role. Delta made aluminum-based coagulants for water treatment and other industrial applications. As time progressed, we developed some new products, mainly for water treatment, and my position developed into a sales and marketing role. By 2000, Delta had grown to be a significant business, and it continued to grow during early part of the 2000s. Delta was privately owned, as are a lot of the companies in the aluminum-coagulant space. In early 2011, USALCO acquired Delta Chemical. At that time, I was Delta’s vice president of sales and marketing, and I’ve maintained that position with USALCO for the last 10 years. Since then, we’ve continued to grow the business and bring additional salespeople on board. Also since that time, USALCO has built two additional plants and has acquired AlChem and CalCHEM, which had one plant each. Municipal Water Leader: Is USALCO privately held? Terry Badwak: The company is majority owned by the private equity firm HIG Capital. Founding family members David and Peter Askew retain a significant minority interest and serve as cochairs on the company’s board. Municipal Water Leader: How many plants does USALCO have today? Terry Badwak: Delta Chemical had two plants, USALCO had five at the time it acquired Delta, and now that USALCO has built two additional plants of its own and acquired AlChem and CalCHEM, it has 11 plants total. USALCO started in 1981 with a single plant, so in 40 years, it has gone from 1 plant to 11.
Terry Badwak: The common theme across all our plants is aluminum-based chemistry and technology, which gives
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us economies of scale and the expertise to meet customer needs. We tailor our solutions to meet unique customer requirements, so the specific products made at each plant may vary. Moreover, all the products we produce are limited from a transportation standpoint. They can only be transported about 300 miles from the plant where they are manufactured. That means that we have to create new plants to expand our geographic reach. Accordingly, the product mix manufactured at a plant is matched to what customers need in each new area. Municipal Water Leader: With 11 plants, does USALCO have a nationwide reach? Terry Badwak: With the addition of CalCHEM, we now have a plant in California. We also have a plant in Little Rock, Arkansas. Everything else is east of the Mississippi. We cover most of the 50 states, except for a few in the Southwest. We do ship and sell to Canada and Alaska as well. Municipal Water Leader: What are the limiting factors in chemical transportation? Terry Badwak: The main limitation is that freight is a component of the cost. Most of the products are 50 percent water, and after you get past the 250- to 300‑mile range, the cost of transportation starts to escalate, making the product noncompetitive from a cost standpoint. We do manufacture a new, patented dry product that is not as freight sensitive. municipalwaterleader.com
PHOTO COURTESY OF USALCO.
Municipal Water Leader: Do those plants each manufacture something different, or do they manufacture the same thing?
The USALCO plant and corporate headquarters in Baltimore, Maryland.
