Casella builds to serve growing markets
Following a year of "unprecedented growth" in 2002/03, characterised by the five major acquisitions (Airmec, Alpheus/Legionella, Spectrascan, EMC/ETI & Monitor Europe) environmental services and technologies provider The Casella Group this year is now implementing the integration of these "building blocks" within a policy of consolidation. One move on the rationalisation front saw the selling of its ventilation hygiene, water treatment services businesses, which were part of the Airmec Ltd subsidiary, to an MBO team in May. The remaining Hazmat remediation business remains part of Casella. The deal highlighted the continuing focus by Casella on environmental consulting services and measurement technologies for the built and natural environments. In an interview with Managing Director Will Pope, LAWE Editor Alexander Catto explores the management philosophy behind Casella's emergence as a leading player in the environmental sector. The company has achieved remarkable growth, hitting record monthly sales in March this year of over £5 million - a figure nearly double that of the annual sales recorded in 1996. With a wide-ranging background in environmental science and services, Will Pope has had two spells with Casella's consultancy services arm and was appointed MD of the Group in 1997Asked to elaborate on the philosophy underlying Casella's aim to provide "integrated environmental solutions," Will Pope responds: "Our brief is to take a holistic view. We take a wide view of the environment. We see it as a broad church."
For him an environmental impact relates to human health, assessing " the air you breathe, the land you walk on, the water that you drink, the food that you eat, or the microbiology that you are exposed to in the workplace air." These are all examples of areas in which the group is active.
As environmental regulation increases pressures across a wide area on businesses and local authorities alike there is a growing role for specialist advice and services to solve problems.
Discussing the main strategic objectives of the group across its main fields of operation, the Casella MD only accepts the suggestion that the group might be aiming to provide the proverbial "one-stop-shop" as very much a shorthand term, "because there will always be services and technologies that we don't offer." The group certainly wants to convey to its clients that it can handle their environmental problems, though a small proportion of expertise may not necessarily be sourced in-house.
Will Pope sounds a confident note when asked to quantify how significantly Casella's capability in offering environmental solutions to the public sector and industry has been enhanced by the recent acquisition policy.
The impact can be seen "because we had a very targeted acquisition programme and we were looking for the building blocks. I knew what we wanted to end up with and we went out and looked for those building blocks. So it was very specific. In our acquisition, for instance, of Stanger we were looking for particularly the ambient environment, the natural environment skills in noise and vibration; when we acquired Winton we were looking specifically for the built environment skills, workplace environment, health and safety, Legionella; when we acquired EMC we were specifically after the ambient gas technologies that those businesses brought and air pollution monitoring stations."
Another key aspect he underlines is the acquisition of the skills individuals can offer. Of the assets that are acquired, he says: "the most significant one is the people and it's the knowledge they bring, the skills, the dedication and the people that really are our business."Market growth
The March sales figures of over £5 million were seen as a "ringing endorsement" of the strategy Casella had adopted and even better figures were promised for the current year. Commenting on progress Will Pope says: "We are seeing strong growth in most if not all of our markets and the business is out there to be got for both local authorities and private industry."
Discussing the main growth areas in the business and what are the drivers in the environmental field, the Casella MD picks out "regulation and corporate awareness" as the main drivers, plus corporate PR , corporate risk management and legislation. Other important factors are environmental management systems, for private and public bodies - and noise and vibration.
In specific terms air quality is very important for Casella, where Will Pope says "we are the biggest player" in a market that is "still very strong and growing." He also picks out hazardous materials, or particular relevance at the moment to anybody with a property portfolio.
Casella's business has two main arms - consultancy and equipment. Explaining the mix the MD says: "We are about 75 % of what we call Professional and Technical Services (PTS), that's the people business, and about 25% Measurement Technology Services (MTS). The market I would say at the moment is stronger for the PTS." On the equipment front Casella has a strong manufacturing base in noise, vibration and ambient air measurement equipment, which is augmented by access to products such as Rupprecht & Patashnick (R&P)'s airborne particulate monitoring technology.
"Our philosophy is not to reinvent the wheel, " says Will Pope. "So if there's something out there that's already the right tool, our philosophy is simply to acquire the technology if we can."R&D commitment
However, the group MD underlines that the company has a strong commitment to R&D, including areas such as particle sizing and particle counting.
One of Casella CEL's latest products is the Apex range of personal Air Sampling Pumps for use by occupational and industrial hygienists, health, safety and environmental monitoring consultants and other professionals seeking to monitor personal and background environments for compliance and legislation.
Casella has products coming through in a development pipeline to supply what is a very big range. Will Pope explains that the new personal sampling pump "was the result of about three years' research and development to produce a piece of equipment that is so smart that it self downloads, self calibrates, removes largely the possibility of operator error for hazardous industries, particularly the nuclear industry where there is still a big requirement."
Dealing with particular markets for Casella's services, such as local authority and national environmental regulation, traffic pollution, local air quality management, noise and nuisance, Will Pope says they are "substantial" and "growing", particularly air and noise and vibration, "where we do a lot of work as well for central government in standard writing and standard setting.
"Then the implementation of those new regulations throughout the country becomes a big challenge - noise footprinting, for instance, is a new big issue and silent cities," he adds.
"There is also the technology of actually understanding, assessing and handling that information and GIS is increasingly important for us as a tool." GIS is applied particularly to air and noise and certain aspects of environmental impacts such as wind turbine impact assessment.Investing in GIS
The Casella MD says the company has just made "a huge investment" in GIS, spending over £200,000. "We believe we have got the largest environmental GIS team in the country and we certainly have got the newest technology."
The investment in the GIS equipment underlines Casella's commitment to R&D which runs into millions a year . Will Pope declares "most of our competitors don't have sales as big as our R&D spend."
In the water quality, water treatment and effluent monitoring sector Will Pope also sees many challenges, particularly in keeping wastewater treatment plants efficient and effective. The group added to its capability in that market with the acquisition of Spectrascan which specialises in water technology.
An obvious plus for Casella in developing new products is the experience its consultancy staff has in the application of specialised equipment and the ability of consultants and manufacturers to benefit from each other's knowledge.
The MD sees this giving the group "the advantage in understanding what the market requires - what users require bearing in mind that we are one of the largest users, if not the largest user, of environmental technology equipment - we know what it needs to be like. We run more air pollution monitoring stations that anyone else in the UK. So we know what's required of the instrumentation because we have got scientists and engineers using it day in and day out."Global scope
Casella has a global role both in its consultancy and monitoring equipment businesses.
Citing current activity ranging from Qatar and Bahrein to Thailand and Siberia, he says also: "At the present time we are growing our business in the US. We have a principal office on the East coast near Boston and we have just opened an office on the West coast.
"The market for us is interesting. Half the world market is in North America. There's a lot of competition but nevertheless our products are increasingly accepted in the US. It is certainly a big market to address."Future trends
Commenting on the prospects for the environmental services sector on the UK scene he says: " There are five big players in our marketplace."
Asked to crystal ball gaze into the future in terms of the "big hitters", Casella's MD says: "What we believe is that the market will consolidate with us or without us doing it and therefore we are going to do it.
"You need to be a quality company. You need to invest in systems, you need to invest in R&D and to do that you need to be a certain size - you have got to hit a critical mass."
Will Pope's view is "The market is still growing. I believe at the moment it is growing at a slower rate than it did in the previous five to six years but it is still growing."
He adds: "We see no reason to suggest that the market will not continue to grow at 10 -15% a year compound at the moment - it varies of course, we have got sections of the market that are growing at maybe 20-25% a year and some that are a lot less."'Green' credentials
Dealing with a final question, recalling his initial reference to taking a "holistic" view, and asking whether he felt the group is as "green" as it made out to be, Will Pope concludes on a positive note.
"I think we are as green as we make out to be," he says, " but we don't put a green spin on it. Green per se is not the target. We are looking for sustainability and common sense: we're very client focused: so we have to look after our clients and advise them of the best routes to take. Now if that means promoting sustainability for, and to, a client then that's what we'll do."