Making Its Mark

Kim A. O'Connell

On a Wednesday morning in July, Scott Eden, president and CEO of EnviroSolutions Inc. (ESI Waste), sat at a small table in his Chantilly, Va., office and talked about his company. Although he was friendly and forthcoming, he only had about an hour to spare. The previous day, he had visited the company's landfill in Ashland, Ky., and he was soon due at a ribbon-cutting ceremony in nearby Manassas, Va., where an ESI subsidiary, Potomac Disposal Services (PDS), was opening its new operations center.

In a larger company, it might be unusual for a CEO to give so much face-time to its subsidiaries, customers or, for that matter, waste-industry reporters. But Eden would have it no other way. After two decades in the industry working with such big guns as BFI, USA Waste and Waste Management, Eden decided in 2003 to start his own firm. Instead of growing for growth's sake, his company would aim to be painstakingly disciplined about its acquisitions, placing a strong emphasis on vertical integration between collection, transfer, recycling and landfilling.

After Eden assembled a team of industry veterans from around the country, the company launched in 2004. Two years later, in its first appearance on the “Waste Age 100,” ESI leapfrogged over many veteran companies to No. 19. With its subsidiaries, ESI has 400 employees, as well as about 25 executives and support staff at its headquarters. In 2005, the company took in $158.5 million in revenue and expects to exceed $200 million this year.

“This company offered us an opportunity to do it differently and do it right,” Eden says. “We're not the biggest company, but we have a lot of people who have worked at the larger companies for 15 or more years. So we have the expertise; we have great financing; and we picked a great market to start in, in a place where people had limited choices. We're more nimble than some companies. We make decisions right here at the table.”

Vertical Integration

As they planned the new company, Eden and his partners scouted 40 metropolitan areas to headquarter in, before settling on the greater Washington area. In addition to being centrally located along the East Coast, the company's target market, the D.C. area was growing rapidly and remained nearly recession-proof. This Thanksgiving, the company will move its headquarters to Manassas, located in Prince William County, Va., one of the fastest-growing counties in the nation.

“We've done a lot of work here in the Baltimore-Washington-Northern Virginia corridor,” Eden says. “We have extensive operations here. We focus on buying infrastructure first, such as transfer stations and landfills, and once we have a network of those kinds of facilities set up, we backfill that with hauling companies so that we have waste to bring to those sites.”

In early 2004, for example, the company purchased a large construction and demolition (C&D) landfill in Lorton, Va., located in populous Fairfax County, which has undergone a massive building boom in recent years. The acquisition of PDS, a commercial collection company, allowed ESI to have a soup-to-nuts commercial waste stream.

“It's a sometimes laborious process, but we try to be very specific about what will be accretive to the company,” Eden says. “We could buy a hauling company in Cleveland or North Carolina, but we want the infrastructure to be vertically integrated. We're not out to plant flags everywhere.”

Currently, the company owns three landfills — the Lorton and Ashland facilities, as well as a soon-to-open landfill in West Virginia (the latter two accept municipal solid waste) — and three transfer stations, one in northern New Jersey and two in Baltimore. The firm has also acquired nearly a dozen small hauling companies that can serve these disposal and transfer facilities. Although one subsidiary collects recyclables, and some recycling occurs at ESI's transfer stations, the company does not yet own a recyclables processing facility. But Eden says that that's a likely eventuality.

“Transfer stations and landfills are very difficult to permit and locate, so we see them as the key assets in this whole industry,” says Clayton Walton, ESI's vice president of government affairs and an environmental lawyer who came to the company because of its entrepreneurial potential and Eden's executive team. “We're very disciplined about acquiring what we think are premium pieces of this infrastructure. We were going to be very focused and targeted and rifle-shot in terms of where we put our money and our assets. And our numbers have shown that it's working.”

A Local Business

Despite its growing reach in the mid-Atlantic region and beyond, ESI has maintained a surprisingly low profile. For example, its subsidiary companies all maintain their original names and operating structures. The only outwardly visible sign of their connection to ESI is that both the parent company and the subsidiaries use the same three-letter logo format.

“We use the same logo and the same colors, but we allow the entity to stay the way it was,” Eden explains. “I think that when you're in an acquisitive business, it's a little bit more advantageous to get your footing and get a sound base before you become known. But with our size and the scope of our business and where we reach geographically, we're at the point where many of our potential customers know about us.”

Increasingly, ESI's competitors know about the company as well. The nation's largest waste companies all operate in the Washington metropolitan area, so how does ESI hold its own? The answer goes back to vertical integration and face-time. “We are a little more driven to make sure that we internalize waste than many of our competitors,” Walton says.

“And there's easy access to us,” Eden adds. “So if a staff member from a county government has a question, they can get us very quickly. Many big companies have a lot of layers, and we don't have the layers.”

Although the company prides itself on allowing its subsidiaries to maintain their local identities, ESI does work to gradually assimilate all of the varying business models so that the company can grow as methodically and seamlessly as possible. Company executives also stay on top of local, state and federal legislation and regulations and work to maintain active partnerships with community leaders. For example, Howard Burns, who oversees ESI's landfill operations, was appointed by the governor to sit on Virginia's Waste Management Board. This summer, to recognize the community around its C&D landfill, the company also sponsored a juried art competition held by the Lorton Arts Foundation.

“The trash business is a local business,” Walton says. “We saw that the bigger companies were losing touch with that important fact. They're headquartered in some big cities, and they never get out to the field. You just have to get in there and distinguish yourself.”

Down the Road — or Rail Line

As landfills close and larger facilities are built farther and farther away from population centers, ESI, like other waste companies, must consider the most efficient ways to move waste from curbside to disposal. To this end, the company is looking carefully at opportunities to take advantage of rail-haul. Both of its MSW landfills are served by rail.

“You want to have a very diverse portfolio,” Walton says. “We will certainly be in the rail business, but we'll be in the truck business as well. We're going to continue doing what we have been doing. It's got challenges, but working with this team of all-stars is just a joy. People here are pulling their oars together.”

Whatever the future holds, Eden is committed to keeping ESI and its subsidiaries targeted enough to make a positive impact in the communities they serve. “There are a lot of people in this business who have thought about starting their own company,” Eden says. “You get pulled in a lot of different directions, and you find yourself working harder than you ever worked. But I make sure our employees understand that what we all do collectively has a huge impact on this company. They're not just a pebble on the beach. We want to leave our mark on the waste industry.”

Kim O'Connell is a contributing writer based in Arlington, Va.

EnviroSolutions AT-A-GLANCE

The company has approximately 100 million cubic yards of MSW disposal capacity accessible by truck and rail.