For Satellite, disasters breed sales

This year's torrent of natural disasters is providing a mini-windfall for Satellite Industries, a Plymouth company that claims to be the world's largest supplier of portable toilets.

Satellite recently sold about 1,000 toilets for use in earthquake-ravaged Japan. Another 1,000 have been sent off this summer to several areas in the U.S. destroyed by tornadoes, fires and floods, including Missouri, Alabama, Arizona, New Mexico and North Dakota.

"We don't wish this on communities, but these disasters have certainly helped us this year. They've given us a sense of purpose," said CEO Todd Hilde. The surge in demand from areas in crisis has helped offset a sharp decline in demand because its major source of business, the construction industry, has tanked.

"It's been traumatic," Hilde said of the drop-off in business from construction-related customers, which traditionally have accounted for about three-fourths of Satellite's sales.

A recent trip to Satellite's Plymouth warehouse found little assembly work going, with portable toilets that were ready to go lined up like wallflowers at a school dance. The High Tech Deluxe Flush, an upscale model made for outdoor private parties and weddings, has a subtle taupe exterior and features a stainless steel toilet bowl. Some units are wheelchair-accessible with handrails, and others have casters so they can be wheeled in and out of elevators on multilevel building sites.

In all the company has 11 models.

In a different part of the warehouse a lone mechanic worked on installing a huge tank, pumps and hoses on a truck. Satellite buys Ford chassis and retrofits and sells them for servicing toilets.

53 years and running

Satellite was established in 1958 by Hilde's father, Al, who had found toilet facilities left something to be desired when he was serving in the U.S. Army. Both Hildes expanded Satellite over the decades so that it now does business in more than 80 countries.

The company used to rent out portable toilets it manufactured but in 1988 sold its rental and servicing operations to focus on designing, making and selling its products to other companies that rent them out. Satellite now has more than 1,000 such customers, about 800 of them in the U.S.

That includes A1 Evans Septic Tank Service in Minot, N.D., which over the last few weeks has bought about 150 toilets from Satellite for businesses, hospitals, government buildings and checkpoints for the state's National Guard that's been called in to help the area recover from severe floods.

"This is by far the busiest I've ever been," said Sandon Varty, who has owned A1 Evans for 12 years. He and his crew of about 10 employees recently have been working 12-hour days, seven days a week, delivering and servicing toilets.

Even though the Souris River has crested, the need for the toilets is continuing because some water mains were broken by the floods. "The city is asking people to conserve water, and that creates a need for portable sanitation," he said.

Varty said North Dakota's oil industry boom has kept that state's home and commercial construction businesses humming.

That's not the case for most of the U.S., which has seen residential and commercial building activity plummet the last four years.

The downturn has been so dramatic, Hilde said, that the recent spate of sales to disaster-struck areas would have been even bigger except his customers in those areas already had plenty of units they weren't renting to construction businesses. In contrast, Satellite sold about 10,000 portable restrooms to customers in the Gulf Region after Hurricane Katrina in 2005, before the economic and construction industry meltdown.

Hilde declined to disclose specific sales figures for privately held Satellite but said its current revenue is $50 million to $100 million. It has taken a severe hit in the last few years, and Hilde said the company has responded by cutting a variety of costs, including reducing its workforce of 100 by about 15 percent.

The impact would have been worse, but several years ago in began to outsource most of its manufacturing, keeping its cost structure low. Satellite still designs its portable toilets and assembles them from molded plastic components made by several other manufacturers. The company also makes liquid and solid toilet deodorizers at a plant in Austin, Texas.

Satellite's business outside the U.S. also has helped it offset the economic decline in this country. Its fastest-growing markets are in Eastern Europe, where construction and infrastructure work activity has been brisk, and parts of Latin America, where the mining industry has grown.

"Think of a portable toilet as a productivity tool," Hilde said. "We do well wherever the labor rates are high or increasing rapidly because you're putting sanitation close to where workers are. They don't have to take time to walk or drive a ways to use it."

Units in some foreign markets aren't like those in the U.S. because of cultural differences. For example, customers in the U.K. insist on flush toilets, Hilde said. The units for Japan are made for squatting instead of sitting, with toilet bowls that are longer, lower and have footprints on either side.

Dave Holm, president St. Paul-based OnSite Sanitation, said Satellite has long gotten feedback from customers like him as it has made improvements in units. He said the company pioneered features like sinks, hand sanitizers, foot-pumps for flushing and exteriors that can stand up to ultraviolet rays.

Even so, Holm and Hilde said both businesses continue to battle the general perception that portable toilets are disgusting. In fact, they said, their introduction has helped some countries improve their quality of life and prevent sickness caused by a lack of adequate sanitation.

"People really take sanitation sewer systems and water treatment plants for granted. Those really are what divide us from the developing world," Hilde said. "You find out how much when you have a natural disaster, and those key functions go down."

Susan Feyder • 612-673-1723