| When someone
comes looking for the services of Locus Technologies, it is because they
have a problem that company co-founder and CEO Neno
Duplancic likens to cancer.
But it is not an anomaly of the human body
that Locus seeks to cure. Rather, its target anomalies in the air, water,
or soil that leads people to the Mountain View-based company.
"If you get to cancer early enough, there
is a chance you will survive and get out of it. But if you let it go too
long, your chances of survival are minimal," Mr. Duplancic said. "It's
the same with environmental contamination. If you get to the source early
and move aggressively to contain, chances are it would be a major headache
and you won't have to spend a lot of money to remediate. But if you wait
until next quarter and then the next quarter, it's going to cost more and
more." Locus Technologies was founded
in April 1997, at a time when nobody, its founders included, thought it
was a good time to start an environmental firm. Indeed, Locus found its
origins in the failure of another environmental firm where Mr. Duplancic
and the seven others who comprise Locus' management team once worked.
Two factors led to the rocky times for the
environmental industry. First, environmental regulations that created significant
market growth in the 1980s diminished demand in the 1990s.
When Congress enacted Superfund regulations
in 1980, an army of engineers and geologists switched to environmental
work But that work began to grind to a halt in the 1990s because while
a lot of money had been spent investigating remediation, not all that much
remediation actually took place.
Second, merger mania began sweeping through
the industry.
Mr. Duplancic's previous employer was acquired
by a group of investors, whom he said underestimated the financial needs
of the company while at the same time overestimating their management abilities.
"The company found itself in a serious
financial crisis," said Mr. Duplancic. "But we had a good team and good
clients and we split to form the new company."
Meanwhile, the previous employer fell into
bankruptcy.
Mr. Duplancic founded Locus with one goal-engineer
the lowest cost remedy at its clients' sites while satisfying regulatory
environmental standards. The company helps clients minimize environmental
liability by using pure science and renegotiating site remedies with regulatory
agencies.
Chevron Oil, for example, was facing a
$45 million fee for remediation at the Purity Oil site, where companies
dispose of used oil. Chevron officials were somewhat skeptical when Locus
told them they could take a different approach.
After conducting studies, Locus was able
to come up with a remedy that cost Chevron less than $10 million.
"Better, faster and cheaper. Everything
starts with a single bore hole in the ground," Mr. Duplancic said. "Clients
hope we will hold their hands and get them out of trouble. They just want
the cheapest and safest way out and that's where we come into play."
Mr. Duplancic gained his knowledge of the
environmental industry during his years at IT Corp., which eventually became
the largest environmental company in the United States, and at D'Appolonia
Consulting Engineers in America and Europe. There, he was responsible for
nuclear power plants and offshore platform projects in Belgium, Italy,
the Netherlands, Spain, Germany, the Mediterranean and the Middle East.
Like many startups, Locus operated on a
tight budget at its outset. Startup financing came from six of the founding
partners and a Bank of America line of credit.
Mr. Duplancic said within its first two
months, Locus landed several major contracts, negotiated favorable payment
terms with its major client, and negotiated to rent office space from two
major clients.
In its fifth month, Locus became profitable.
Initial revenues for 1997 are estimated at $10 million.
Companies from Xerox to Schlumberger, which
bought Fairchild Semiconductors and inherited its contaminated sites, have
turned to Locus Technologies since its founding. In so doing, some of these
companies have found Locus was able to solve problems that had confounded
other environmental firms.
Xerox, for example, had been trying for
some time to obtain a letter of closure from the Regional Water Quality
Control Board for a site in Hayward it wanted to vacate.
When Xerox retained Locus, engineers conducted
an environmental audit and found contaminants in a shallow groundwater
aquifer and a small area of the unsaturated soil above the aquifer. The
water contamination was not a threat to public water supplies, but the
soil required remediation. Using a conventional method - a soil cap - would
have required a maintenance lifetime of 200 years to keep the Environmental
Protection Agency happy.
Using a new policy that was about to come
into effect, as well as newer technology to reduce the soil contamination,
Locus eliminated the need for a soil cap. Within three months after landing
the project, Locus obtained the letter of closure for Xerox.
The Xerox project was Locus' first job
and it remains a favorite story of Mr. Duplancic's.
"This was a case where no matter what Xerox
did and how they did it, none of it made a difference because they couldn't
get that letter," Mr. Duplancic said. "Xerox had used many consultants
there, they called us on short notice and we were able to figure out how
Xerox could use this new policy."
Mr. Duplancic's involvement with Schlumberger
dates to 1982, when he was with a previous employer.
He and members of his team were retained
by Fairchild Semiconductors to address the now-infamous South San Jose
site, which at the time was considered to be a small project.
When Schlumberger acquired Fairchild, it
also acquired the company's problems, which snowballed so much that Mr.
Duplancic's team now manages all of Schlumberger's contaminated sites in
California and one in New York.
"They didn't know at the time they had
such a problem. But they are very responsible corporate citizens," he said.
"They are trying to prevent the spread of contaminants and we are applying
some pretty exciting technologies."
Tom Jones, who manages contaminated sites
for Schlumberger, believes that not using Locus is a mistake most companies
can't afford to make.
"In environmental cleanup technology, disciplines
are intertwined. I don't know if it was by happenstance or design, but
Locus has each of the disciplines represented in its group," he said.
Barbara Jagiello, a San Francisco attorney
who met Mr. Duplancic at a Croatian-American event, finds that people are
drawn to Mr. Duplancic not only because of his impressive credentials,
but because he doesn't spend a lot of time talking about himself.
"He listens a lot and watches a lot and
he seems to have a good sense of people and how they are likely to respond,"
she said.
Mr. Duplancic is watching how his company
is likely to grow in the coming years. Most likely, he said, expansion
is in the future.
"We know what we do well and we are good
at it," he said. "Our goal is to put a couple of more points on the map,
where our primary growth will come from, and then we will try to go international." |