Matthew White, Director of Global Sales and Technology for Economy Polymers, talks about their Texas-based global chemical business.
Please excuse any typos in this hasty transcript.
Matt Register: Hey guys, welcome to Texas Business Radio. We are going to continue to bring you very interesting stories of folks that are growing their business. Folks that are, you know, making the most out of this great country we have and the economic opportunity we have through business. Today we’re going to talk a little bit about the energy industry. In Texas the energy industry is big. It’s certainly not everything in our, but it is big. It is big and there is a whole lot of services surrounding this industry that we wanted to highlight today. And we got a studio full of folks I think you’re really, really going to enjoy. I’m your host Matt Register, here as always with Jay Curry. Jay talk to me.
Jay Curry: Well, I’ve got to tell you our guest here, Matthew from Economy Polymers… It’s really fun to watch a company that takes advantage of the down time to prepare themselves for what they want to be in up time. And these people have mastered it. I mean this is going to be very informative. I think our listeners will get a lot out of this.
Matt Register: Yeah, no doubt. Go ahead and get your questions in guys, 844-814-8144 is our 24 hour call in line. That means call in now, call in later, call in at 3 o’clock in the morning. It doesn’t really matter me. We’re going to get the experts in here to get those questions answered. We also monitor #TBR on Twitter. Or go to the web site, Texasbusinessradio.com and see the whole thing a beautiful high definition video or get your questions in there. OK. Matthew White is the Global Sales Manager for Economy Polymers and Chemicals. Matthew, welcome to the show sir.
Matthew White: Thanks for having me.
Matt Register: So tell me a little bit about Economy Polymers and Chemicals. What do you do? Who do you do it too?
Matthew White: Well, we are the manufacturer for a lot of the hydraulic fracturing chemicals used today. We’ve been around since 1951, were a family owned business. We manufacture different adjunct polymers for hydraulic fracturing and the chemicals that go along with those. Our customers are the Halliburton’s and Schlumberger and major service companies of the world all the way down to guys doing one or two wells a year. So.
Matt Register: Well, we were talking during the break. You guys do well more then than that. You do a lot of other things with other industries. Mining and…
Matthew White: We do some, some mining and some healthcare, personal care, stuff like that as well.
Matt Register: Okay.
Matthew White: But mostly, 90 percent of our business is oil and gas.
Matt Register: Well, if, I don’t know if you have noticed or if it’s affected you guys but there is a downturn going on right now.
Matthew White: I heard something about it.
Jay Curry: Yeah I bet you did.
Matt Register: So, tell me a little bit about that because I find it interesting when, you know, some companies they know there’s a downturn, there’s really nothing they do about it. Right? They, they just weather it.
Jay Curry: Buckle down.
Matt Register: They buckle down and they and they ride it all the way through. And some companies actually take proactive action. Tell me a little bit about when you guys identified it and what it is you guys have done.
Matthew White: Sure. I mean there’s companies out there, a lot of them are not with us anymore. That didn’t see it coming or didn’t react in the correct way. So we had a couple of opportunities of putting our head in the sand or going to the beach and riding this thing out. We decided to go a different route and really doubled down on our business model. And our family values of, you know, staying whole, not taking any money and basically investing ourselves back into the business. Growing vertically through trucking, warehousing and making polyacrylamide might not just forego. So…
Jay Curry: So you basically took, you looked at your operation and you said “Hey, we could cut some costs by providing the trucking and we could cut the costs by…” and then got into that. As a way to reduce your costs and keep you more diversified.
Matthew White: That’s exactly what’s happened. We’ve had to go back and look at; what are we spending money on, who are we paying to do something we can do ourselves. And then with that, so started a trucking company, started a warehousing company. OK. We got ourselves as a customer. Let’s go out and sell trucking to other people, sell warehousing to other people. You know, do distribution for other folks. We’re doing it for feed companies for cows and chickens right now,out of Shulenburg, Texas. So…
Matt Register: And more importantly, it’s other industries that do not cycle in the same rate as the oil field does. Right?
Matthew White: Exactly. So we’ve looked to do things outside of oil and gas that aren’t so up and down. You know, they’re not geopolitical decisions on the, on their price. And so we’ve looked to do that and we have done that. We’re doing that in mining, we’re doing it in personal care.
Jay Curry: So one of the things we’ve noticed in the energy industry is when we get these down times, you really have to figure out how to be more productive. How to be more cost effective, how to be more efficient or go out of business. And that’s basically what you’ve done by looking at where your costs are and how you can drive that cost out of your product. And at the same time it opens up other areas for you, other non energy areas. I just think it’s great.
Matthew White: Yeah. I mean that’s, those are the two options, as you know, either die or get smart about it.
Jay Curry: Yeah.
Matt Register: I’ll tell you what, you know, we preach all the time on this show. There is a time during, during the downturn. Right? When you’re, when your work is shrinking, you have cash falling out of working capital.
Jay Curry: Right.
Matt Register: And if your debt level is such that, that you can well weather that, that level of debt. That is an opportunity then to expand. You guys have expanded not only vertically but horizontally as well. And vertically you went from we need to be able to, now this wasn’t all for this downturn but over the years, we need to control our raw material.
Matthew White: Certainly.
Matt Register: Right? We need to be able to produce it, which is what we do. Now we need to be able to warehouse it and truck it and distribute it. And, but very recently you decided you’re expanding product lines. Right? You’re expanding horizontally and taking over not only the frac water part of it but you’re set up a slick water plan as well. Tell me a little bit about that. What the decision was to do that?
Matthew White: Sure. So the two major systems for hydraulic fracturing or the ghawar based system and a polyacrylamide based system, friction reducer or gel. So we’re world leaders in the ghawar technology, basic all the way back to the fields in India. On the slick water side, we were not. And there’s only a handful of companies in that business. So we decided to get into that business in a innovative way, strategic way, where we’re located, how we’re doing the manufacturing and the quality of the product. And the time from the manufacturing plant to the wellhead and that distance is the lowest in the business.
Jay Curry: So these are used in different places. So different applications their not competitive to each other. Right?
Matthew White: Well they’re both used in hydraulic fracturing but they can also be used, one can be used in, in other places. Wastewater treatment being the, the largest driver there. So going to municipalities and things like that, that will be probably our next step after gaining as much market share as we can in oil and gas.
Matt Register: Well, during the break we were talking about this and the technology that has gone into your plant there in South Texas, your slick water plant, is pretty substantial. Yes, we’re able to take advantage of a lot of technical, technological advancements that your competitors in that business do not have.
Matthew White: Correct. Yeah, our footprint is, is a twentieth of the size there. So overhead and manpower, utilities everything is substantially shrunk. And the way we’re making the product is cutting edge, leading edge technology on continuous process reaction. So it’s…
Jay Curry: A big advantage.
Matthew White: And nobody else is doing. And we’re getting higher quality than our competitors can get right now.
Matt Register: Well, hey, good for you. God bless America. That is what it’s all about. Matthew White is the Global Sales Manager for Economy Polymers and Chemicals. Matthew thank you for joining us.
Matthew White: Thank you.
Jay Curry: Great story.
Matt Register: Now the easiest way to get in touch with you guys. What’s that Web site if somebody wants to learn a little bit more.
Matthew White: It’s economypolymers.com or my email is firstname.lastname@example.org. Those would be the two.
Matt Register: Wonderful. economypolymers.com. Guys, if you’re driving, don’t have time to write that down, texasbusinessradio.com. We’re going have links to this and every other guest we have as well. What a remarkable story. And this is something that, you know, like I say, God bless America. This is, this is a family business. Matthew you’re fourth generation in this business. Company is going strong. Weathered the downturn. Identified there was a downturn, decided to go to other industries and in the middle of the downturn, grew to be the company they want to be during the next upturn.
Jay Curry: Remarkable story, it really is.
Matt Register: And that’s exactly how you’re supposed to do it. So hats off to you and continued success. Guys, we got to go take a break. We’ve got to go pay a couple of bills. We’re just getting warmed up. We’re talking about the service surrounding the energy business here in Texas. But we’re going to go to a break. Don’t go anywhere. You don’t even have time really to go anywhere. We’re going to be right back, right after this. Don’t go anywhere.
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In addition to hosting "Texas Business Radio," Matt is an investment banker and serial entrepreneur from Montgomery, Texas. He is the owner of RREA Media and Register Real Estate Advisors and a Managing Director and Principal at Corporate Finance Associates. He has a BS from the United States Military Academy at West Point and an MBA from Rice University in Houston. You can read more about Matt HERE.