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Water treatment firm sells system

BlueinGreen lands $750,000 deal with canning company

By John Magsam

This article was published August 4, 2014 at 2:20 a.m.


NWA Media/DAVID GOTTSCHALK - 7/30/14 - Robert Hime, with Bear Automation, left, and Darryl Fendley, senior product engineer with BlueinGreen, continues to prepare a CDOX for delivery to Omaha Ne., at their manufacturing facility in Fayetteville Wednesday July 30, 2014.

FAYETTEVILLE -- Sales at water treatment technology company BlueinGreen are on track to break records this year, including its largest sale to date to the new owners of the defunct Allens Inc. of Siloam Springs.

The sale to Sager Creek Vegetable Co. of BlueinGreen's SDOX system, which uses supersaturated dissolved oxygen to improve general water quality, was finalized recently. The cost of the system is about $750,000, according to BlueinGreen.

Allens filed for bankruptcy in October and was sold at auction in February to a group of its creditors, who changed the company name to Sager Creek Vegetable in July. Allens has faced complaints from the neighbors of its Siloam Springs processing plant and an administrative consent order from the Arkansas Department of Environmental Quality because of the water quality at a creek near its Siloam Springs plant.

In response to emailed questions and in a phone interview, James Phillips, a spokesman for Sager Creek Vegetable, said the BlueinGreen system will be used to convert the existing wastewater lagoon into an aerobic treatment system. The intent is to partially treat the wastewater prior to discharging it to Siloam Springs and concentrate the nutrient-rich portion of the wastewater.

"The investments we are making in the wastewater system at the Siloam Springs operations are positive for the environment and for our neighbors," Phillips said in an email. "We looked for and found a wastewater system that would support the production at the facility to accomplish both of these goals and also be able to be operated year round."

He said the BlueinGreen system is cost efficient and saves energy. The fact that BlueinGreen is Arkansas-based was a bonus, he said.

Phillips said that if the BlueinGreen system works as well as expected at the Siloam Springs plant, Sager Creek Vegetable would consider placing systems at its other production operations. Sager Creek Vegetable expects to have the Siloam Springs BlueinGreen system online in October.

This year, BlueinGreen has also sold three of its CDOX systems, which use supersaturated dissolved carbon dioxide to lower pH in drinking water or in industrial applications. The CDOX systems were sold to water treatment operations in Omaha, Neb.; Bismark, N.D.; and Antelope Valley in California, north of Los Angeles. The three sales totaled $756,000.

BlueinGreen Chief Executive Officer Clete Brewer predicted sales in the second half of the year would be just as successful. He said the purchase of the SDOX system by Sager Creek Vegetable was not only BlueinGreen's biggest sale to date, it represented an important step into the industrial market.

"We needed this," Brewer said. "You can only be a startup company for so long."

The company sells four systems that deliver either dissolved, oxygen, carbon dioxide or ozone into water to deal with a variety of water treatment applications. The systems are highly efficient, compact, self-monitoring and, in some cases, can do away with some major infrastructure costs such as retention basins, Brewer said.

The company was founded in 2004 by Scott Osborn and Marty Matlock, both University of Arkansas professors. Osborn still sits on BlueinGreen's board of trustees, and Matlock serves as an adviser. The company's headquarters is at the Arkansas Research and Technology Park.

BlueinGreen is backed by private investors, the Arkansas Development Finance Authority, the Fund for Arkansas' Future and New Road Ventures. It is a VIC Technology Venture Development portfolio company. Fayetteville-based VIC has 15 companies in fields including nanotechnology, cancer diagnostics, pharmaceuticals and semiconductors.

The company employs 12, most of them engineers. It assembles its systems in Fayetteville after outsourcing parts but hopes to eventually manufacture the systems in house. BlueinGreen sells its products through representatives throughout the U.S.

Prices vary, but typical systems sell for an average of $200,000, with larger units selling in the neighborhood of $500,000.

Brewer, an entrepreneur who co-founded Staffmark and took the company public and also the former president and co-owner of Sport Clips, came to the company in 2010. Brewer also is a partner with the investment group New Road Ventures, an investor in BlueinGreen.

He said pilot programs and smaller systems sold over the years have paved the way for the company's sales growth this year.

"Engineers are not known for going first," Brewer said. "We've had to prove our technology."

He added that municipalities, some of the company's main target customers, have been holding off on spending money on infrastructure since the economy turned sour in 2008. The recent sales indicate cities are looking to spend money again, putting BlueinGreen in a good position to capitalize on demand for its technology, Brewer said.

According to the 2013 Report Card for America's Infrastructure produced by the American Society of Civil Engineers, U.S. water systems received a grade of D. The grade is not for water quality, which is high overall, but for the condition of infrastructure.

The report notes that the Environmental Protection Agency projects that during the next 20 years, water systems will need $334.8 billion to keep pace with infrastructure demands, mostly in the form of pipe replacement, with $67 billion of the total going toward water treatment systems.

The nation's wastewater and stormwater systems also received a grade of D. The report projects an estimated total investment need of $298 billion over the next 20 years.

Most of that expense will go to replacing pipe, but needs for treatment plants are expected to make up 15 percent to 20 percent of that figure. The report indicates that the amount for water treatment will likely increase because of regulatory requirements.

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