US Filter waters down growth to maintain quality

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After doubling revenues in each of the past two years to more than $50 million, the local manufacturing division of US Filter Corp. plans to slow down. Company officials have set a goal to reach revenues of $80 million to $100 million by the year 2000.

“It has been a mind-boggling year for the Colorado Springs manufacturing division of US Filter,” said Alan Wright, vice president and local operation manager.

The ultra-high purity water system maker will use the anticipated slow down wisely, according to Wright. Its systems are used primarily in the electronic manufacturing industries. In 1997, Wright plans to perfect the systems installed in 1996, create a methodology to carry the company through the year 2000, and maintain a reasonable growth rate as well as the company culture that got the company where it is today.

“It won’t hurt at all to have a more sane 1997,” Wright said.

In 1996 the company moved from a 23,900-square-foot facility to 78,000 square feet, 58,000 of which will be used for manufacturing, in the former Ampex Building on 6.2 acres on Wooten Road. US Filter paid $3.5 million for the building in May, 1996. They spent $500,000 on renovations. Ampex had already been preparing the building for its own relocation. Ampex was planning to sell a second building on Wooten Road that it continues to occupy.

The manufacturing facility was the first US Filter has purchased. It is considered a leading edge facility by both company officials and industry analysts. The company had planned to build a $4 million facility on land it was three days from purchasing when the Ampex building was found.

“We thought we’d died and gone to heaven when we saw that facility,” said Tim Traff, senior vice president and one of the founders of US Filter.

The local division has hired 49 people in 1996, growing to 119 employees. Wright anticipates hiring 15 to 20 employees in 1997 and growing to 150 to 175 employees total.

“I’m a firm believer in focused factories, manageable factories,” he said.

David Manlowe, a water and chemical industry analyst for NatWest Securities, said that given the expected growth in the electronics industry, it’s not realistic to think the Colorado Springs facility will stay in that size range.

The electronics industry is the largest end user of the Springs’ division’s systems. Manlowe said the electronics industry is expected to grow 20% per year for the rest of the decade.

“US Filter is supplying the highest quality product in the industry,” Manlowe said.

The division’s parent on the other hand plans to continue acquiring companies in the fragmented water business until the Securities and Exchange Commission steps in, jokes chief executive officer Richard Heckman. US Filter is currently seven times larger than its nearest competitor.

As the $2 billion US Filter acquires more companies, the local division will offload some operations another company may do better. It also hopes to gain customers for its ultra-high purity systems, which is considered its core competency within the larger company.