Todd Pencarinha, President of Altiras, talks about his investment philosophy investing in renewable or reusable products and services.
Please excuse any typos in this hasty transcript.
Matt Register: Welcome back to the show, Texas Business Radio. Texasbusinessradio.com is the website. 844-814-8144 is our 24 hour call-in line, get the calls in. We’re gonna get the experts in here to get those questions answered. We’re talking about business. There’s a million ways to make a living in this country and we love having these guys that have figured something out. We have a gentlemen in here that has started a company and he is in the chemical business. Well, it turns out he has grown his business into an incubator of companies surrounding that environmental cleanup, that reuse of chemical type, and fascinating story. We can’t wait to tell you about it. I’m your host Matt Register. Jay Curry is sitting over there giggling in the cohost chair. What do you think, man?
Jay Curry: Well, I’m agreeing with you. This is really fun. It’s one thing to talk about green and green earth and all of that, but here with Todd, we’ve got a situation where he’s been so successful so many times and it’s developed into its own business of helping good people out there get started and be successful.
Matt Register: Yeah, no doubt. Todd Pencarinha is the President of Altiras out of Houston. Todd, welcome to the show.
Todd Pencarinha: Thank you, it’s great to be here.
Matt Register: Tell us about Altiras. What do you do, who do you do it to?
Todd Pencarinha: Altiras is a … it’s really a family of companies and started out as a company focused on beneficially using chemical co-product and byproducts, [inaudible 00:01:50] fuels in trying to find ways to get values out of those where big companies were paying a lot of money to get rid of them prior to us starting.
Matt Register: Well, and I had the benefit of talking to you during the break and our listeners don’t necessarily. You’re a chemical engineer by background?
Todd Pencarinha: Yes, chemical engineering undergraduate. Yes.
Matt Register: And so a lot of big companies in the process of making something end up with waste chemicals, correct?
Todd Pencarinha: Yeah, trying to make chemical A, you may use chemical B and produce chemical C and have some leftover chemical B.
Matt Register: What that ends up doing is they, in the past, have had to pay to have that stuff removed and taken care of. You have come in and figured out a way to … where there’s a secondary market for some of that stuff, right?
Todd Pencarinha: For a lot of that stuff, we can use it as is to comply with the regulatory environment and for those things that we can’t use as is, we do research and development in trying to figure out what we can do with it to comply with the regulations and make something valuable out of it.
Matt Register: Yeah, what can you turn it into that there’s a market for.
Todd Pencarinha: That’s exactly right.
Matt Register: So, essentially, you have a chemical recycling shop for a lack of a better word, right?
Todd Pencarinha: Yeah. It’s a chemical recycling business and a business to develop other recycling businesses.
Matt Register: Well, talk to me a little bit, because you’ve ended up growing a series of companies out of kind of that birth as a chemical recycler.
Todd Pencarinha: That’s right.
Matt Register: Talk to me a little bit about the progression and when did you guys build the additional add-ons?
Todd Pencarinha: Well, we started out focusing on … We were one company, we were Altiras Industrial Services and we realized that to meet some of the needs of our customers, we needed to rebrand. Companies that have waste chemicals, they don’t want to sell to a fuel company, because that’s a regulatory problem and vice versa and so soon after we formed the company, we had to rebrand. We created Altiras Chemicals, because it’s dedicated to beneficial reuse of chemicals and Altiras Fuels and Altiras Industrial Services to focus on waste related projects where we could minimize the waste and recover value from the waste.
Matt Register: Well, but there’s a whole lot of other things that you have going … Looking at your website and us having talked, but that led to some opportunities with some, I guess, environment remediation, for a lack of a better word.
Todd Pencarinha: That’s right. We had some … had an opportunity to do a major remediation project up in Oklahoma where there was an opportunity to recover quite a bit of the value of the material by doing other things. And so because of that, we created a new company called Altiras Recovery and then we thought, “You know what, there’s gotta be dozens of other projects out there like this, so let’s get those.”
Matt Register: This project, very rarely are those unique, right?
Todd Pencarinha: That’s right.
Matt Register: That’s why it’s a problem out in the market. But one thing that all of them have in common is there’s some kind of weird environmental problem associated. Like the remediation that you did, it was a challenge figuring out how to do it. It wasn’t available on the market for somebody to just come and pick this material up, right?
Todd Pencarinha: That’s right. In our chemicals business, in our fields business, that’s used as is and so other people can now … have figured out how to do some of that, but in the Altiras Recovery, we look for those things where other people haven’t figured it out. We come in, we’ll do the research, we’ll focus on trying to solve the problem and then we’ll put capital in place to solve that problem.
Jay Curry: Yeah, this is a big, big deal and it’s nasty. Are you able to recover materials from that or is it just a matter of getting it out and finding a …
Todd Pencarinha: Oh no, our focus is on the recovery. Lots of companies can go and remediate sites and clean them up. Our focus is really to derive value from the materials that exist there, which dramatically reduces the cost to some of these site owners.
Jay Curry: Right
Matt Register: If you can get a revenue stream off of the waste product, that’s even better. There are even more companies that you guys are developers; Pipeline Construction Company and others, talk to me a little bit about that.
Todd Pencarinha: Yes, sir. Pipeline Construction was really an opportunity where we had a group of friends, really, one friend in particular, Matt Lee, and Matt understood the pipeline business. He was looking for an opportunity, he had a whole crew of people, so we brought him in and the relation to there is it’s a very environmentally sensitive business. We’ll do all kinds of things. We’ll do asbestos remediation and the pipe itself has value, so there’s beneficial reuse opportunity there, but frankly, it was the opportunity to invest in a person who had a great team and a great idea and we’re looking for lots more of those.
Matt Register: Well, it’s interesting that you’ve almost … you’ve turned your business into a private equity group, for a lack of a better word. I mean, you guys are out looking for opportunities to bolt on companies, to what you have going on. You have set a left and right limit of that environmental, that reuse aspect to the company, but you guys are now set up to be able to take an existing company and grow it or take a company in Greenfield to get it going. What are some of the plans that you have over the next few years with this?
Todd Pencarinha: Well, we’ve got a couple of opportunities where we’re gonna invest in a recycling plant in Puerto Rico, a chemical reuse trading business in Puerto Rico and we’re looking for others. There’s some onsite recycling that we’re interested in doing right here in the Houston area and quite a few other opportunities. The key for us is we’re looking for good opportunities that we already have the personnel to operate, but we’re also looking for people who have really good ideas who are just out there saying, “Give me a chance”
Matt Register: Yeah, they’re just looking for an opportunity to be able to do it. What are your thoughts about the … EPA is a big part of your business, right, with being able to understand and navigate your way through a lot of these regulations. Current administration is certainly not one where the EPA is growing, right?
Todd Pencarinha: To our understanding, right.
Matt Register: What are your thoughts about what’s coming over the next few years or what are some of the next problems that are popping up with the EPA?
Todd Pencarinha: I’m not sure where the EPA is going, but it’s not just the EPAs, the state agencies, and regardless of where they go, there’s a constant need to minimize waste and to make … to find value in those resources that are there.
Matt Register: Sure.
Todd Pencarinha: We have the resources that are here on the planet. It’s not like we’re gonna get a lot more resources than what are already on the planet, so the better job that we can do, just in an environmental stewardship mode of finding ways to reuse or minimize waste. That’s what we have to do. That’s what all companies have to do.
Matt Register: No, can’t disagree with that. Todd Pencarinha is President of Altiras. What’s the easiest way for somebody to learn more, should they want to?
Todd Pencarinha: Go straight to the website, Altiras.com. A-L-T-I-R-A-S dot com.
Matt Register: Altiras.com. Todd, thank you very much for joining us.
Todd Pencarinha: Thank you very much. It’s a great time-
Jay Curry: Congratulations.
Todd Pencarinha: … being here.
Matt Register: Hey, these guys do chemical recycling, they do pipeline, they do all kinds of stuff. If you’re interested, Altiras.com. We’re gonna have that link directly from Texasbusinessradio.com if you’re driving and can’t take notes, we’ll have it right there. Guys, we have a whole lot more Texas Business Radio coming up. We’re just getting warmed up, so don’t go anywhere while we take a quick break, pay a couple of our own bills. We’ll be back right after this.
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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.