Injecting Innovation

Injecting Innovation

company by Dave Szymanski | Tampa Bay Editor

Entrepreneur Frank Daniels carries on a family tradition of leading a water-powered chemical injector company in Largo into new markets.

Tampa Bay area businessman Ray Daniels started a sign company which he sold to National 3M.

A restless entrepreneur, Daniels saw that pushing a fertilizer spreader around the yard wasn't fun. So he and his friend, Norm Shine, invented a product that would automatically inject fertilizer into water and treat a yard. They took it to a garden show. One of the people there invited them to go to a trade show in Atlanta.

The lawn fertilizer product didn't attract a lot of attention, but the non-electric chemical-injection technology behind it did. And the application drew attention for agricultural uses.

That led to the 1976 beginning of Chemilizer Products Inc., a water filtration company based in Largo.

Fast forward to 1991. Daniels' son Frank, at his father's suggestion, sold his telephone equipment installation company in Citrus County and joined Chemilizer, working in sales.

"The company was in really poor shape," Frank Daniels says. "We felt the best way to find out was going on the road and listening to customers, so that's what I did. Dad got sick literally, listening to what some of the customers said. It upset him. I developed an appreciation for the person selling and buying."

In 1994, Frank bought the business from Shine and became president. He rededicated the company toward improving products and service in a timely, cost-effective way. Frank Daniels bought new manufacturing equipment, added a production line and added an engineering group.

Chemilizer still assembles the product in Largo. A Largo company called Zeus does the molding for Chemilizer. About 98% of the parts are plastic.

The company has been international for two decades. Chemilizer distributes in China, Asia, Australia, South America and North America.

Fuel impact

Like many companies, the cost of fuel is affecting Chemilizer revenues and profits. Rising fuel costs raise price of grain, which is tied into the agricultural side of its business, it's largest part.

"Right now, we are struggling like every company," Frank Daniels, 59, says.

For chickens, a big part of their feed is from corn. But corn is being diverted to ethanol by government mandate, creating an expensive problem for producers.

"The industry is in a serious, serious condition and is trying to adjust," Daniels says. "Gas is more than $4 a gallon. Also there's the lack and high cost of feed. They are having to adjust, to find new strategies to stay profitable. It's difficult at best ... most difficult part of all, is that it's happening so fast."

How is Chemilizer responding? It is evaluating its pricing structure and cutting costs.

"I have a lot of people working for me and sometimes you lose sleep at night," Daniels says. "You make decisions with them in mind. It's been a challenge, more so than in the past.

"I've never been a doom and gloom prophet. But I get real mad about people who don't recognize difficult situations. I think we'll weather the storm and be stronger for it. We will come out of it smarter, stronger."

As Chemilizer worked on its products, it developed a wider variety, from a tank model to sprayers you can strap to your chest. By increasing its rates of injection, it opened up new markets.

"From a economic standpoint, that's allowed us to keep our costs down," Daniels says. "I never say we are a cheap product. We are a value-added product."

Competitors have grown over the years. There are now about eight non-electric injector companies. Instead of using an electric motor, the Chemilizer injector lets water flow push the chemical out.

Chemilizer set itself apart by the longevity and cost efficiency of its product. The other companies' products have a sliding piston, like a car. That creates a wear factor higher than the Chemilizer products.

Chemilizer also has a removable pump and the total cost of ownership is one-third of its competitors. The company has a half percent or less failure rate on its products. In the future, it hopes to launch new water treatment products.

Although being green is popular, Daniels bristles when asked about the popular environmental trend among businesses.

"I hate the term 'green,'" Daniels says. "There's no clear-cut definition of what they are talking about. I have a product that reduces irrigation by 50 percent."

Chemilizer is working with engineers on designing cities and parks that use water more wisely. The goal will be parks with runoff water that won't have contaminants.

"Quite frankly, I'm concerned for our grandkids," Daniels says. "We have a water problem in Florida. About 85 to 90 percent of our water is consumed in agriculture - lawns and irrigation. We can reduce our water use. We can reduce our demand. We know how to reduce runoff contaminants. We can have our cake and eat it too."

Another large market for Chemilizer is swimming pools. It offers one of the few non-electric chemical injection devices for pools and drinking water.

There are roughly 1 million pools in Florida and about 90,000 in the Tampa Bay area. There are nine million swimming pools nationally. The Southeast and Southwest have larger swimming pools, which need chlorine to maintain proper ph levels.

The Chemilizer product helps Daniels and his five grandkids and hairy dog who loves to swim use two gallons of chlorine a week and do it inexpensively, cutting about $100 a month from the electric bill, he estimates.

Another new product will be a steam water distiller for home use. The company has tested water from a sewage plant and it came back well within federal drinking levels using the distiller.

The company has prototyped it. It is now trying to package it.

"That's what takes the longest: how to get it to the public," Daniels says. "The products are affordable, people want to use them, want to try them. Making them work is easy."

The future

Daniels sees more competition and cost pressures causing consolidation in the chemical injector industry.

Companies have approached Chemilizer about acquiring it, but Daniels has resisted. Besides wanting to stay independent, he also wants to protect his employees, who include his daughter, vice president of operations. His brother-in-law and sister-in-law also work at Chemilizer.

"It's a good company," Daniels says. "I've got good people. I don't want anything to happen to my people. I want to be able to give them opportunities, better opportunities than anywhere else."

Because the company's product mix has evolved, Daniels has thought about changing the company's name, but Chemilizer Products has brand value.

"It's a very good name," he says. "We've worked hard to make sure it's a good product."

Daniels wants to get more marketing reach from its Web site and is in the process of lowering prices.

Revenues for the past five years have been more than $3 million per year, with increases of 7% to 10% a year.

Ironically, very little sales are in Florida. International sales are strong, but increased fuel costs are affecting shipping costs. The freight charge to get from Tampa to England rose $19 per unit this year.

REVIEW SUMMARY

Company: Chemilizer Products Inc.

Industry: Water-powered chemical injectors

Key: Finding new markets and new applications for water-powered chemical injectors