Credentials and info
Rick Terrien

Making Money From Muck

Rick Romel

Some boys play baseball. Some play piano. Rick Terrien played with muck. It's a background that served him well.

As a boy, he used to help his father contain oil spilled near the runways of O'Hare International Airport. Today, he runs Universal Separators Inc., a small firm that offers General Motors, Ford and other industry titans a simple but effective way to remove oil that, left alone, would foul basic manufacturing processes.

It's an unglamorous business that takes Terrien to places such as Flint, Mich., and Kokomo, Ind. He travels by car, not plane. The job can get so dirty he sometimes wears clothes from Goodwill.

What's not to like?

"I love what I'm doing," said Terrien, 50, of Madison. "I'm just totally pumped by this."

The company makes the SmartSkim system for separating oil from water and other fluids used in such processes as heat treating, which hardens and improves metal.

It's a system that Terrien - a former philosophy and business organization major - helped design and on which he and his partner, brother-in-law Dave Walker, hold four patents.

It works well enough that Universal - which has just five employees, including Terrien and Walker - has gained the U.S. automakers as well as Honda and Harley-Davidson as customers.

"From what I've seen, this is the absolute best oil-removal system that I've ever worked with," said Kevin Biggers, a heat-treat engineer at Batavia Transmissions LLC, a Ford subsidiary in Batavia, Ohio.

DaimlerChrysler spent $80,000 on about 10 SmartSkim units at its transmission plant in Kokomo and quickly recouped its investment. "We're looking at about a $200,000-a-year cost savings," said Bob McCulley, heat-treat lead supervisor at the factory.

Using SmartSkim helped a team at the Chrysler plant win an environmental award. Terrien proudly shows a photo of Dieter Zetsche, president and chief executive officer of Chrysler Group, inspecting a SmartSkim separator.

Terrien and Walker started Universal in 1998 with $3,000 each in borrowed money.

Terrien owned a small printing business but said he felt it was time to move on and sensed an opportunity in industrial oil removal.

His father ran a company that did pollution-control work in printed-circuit-board factories and meat-packing houses. "We used to work in the sewers of sausage plants," Terrien said. "I still like sausage (but) that's an unpleasant environment."

Helping his father as a young man, Terrien learned to design systems for removing oil from water, a field he returned to with the launching of Universal Separators. The company targeted heat treaters as its prime market.

Heat treating is essentially modern blacksmithing and is widely used in manufacturing.

"Cars wouldn't roll, planes wouldn't land if it wasn't for heat treating," said Scott Hardy, marketing director for the Metal Treating Institute, an industry association. Dirty, gritty, necessary

Valuable as it is, it's a gritty process where furnaces heat parts to almost 2,000 degrees and oil smoke hangs in the air.

"It's about the dirtiest part of industrial North America," Terrien said. "We actually have thrived in this business even though we're just a tiny, tiny, tiny little business . . . because it's an area nobody wants anything to do with."

In heat treating, metal parts are heated in high-temperature furnaces, then cooled - often in an oil bath - before being heated again. It's between the bath and the second oven that Universal Separators comes in. Before the parts go into the second oven, the oil must be cleaned off. That's done with water and detergent in what amounts to an industrial-strength dishwasher.

But unless the oil can be removed from the water, the parts will become fouled again as they're lifted from the wash. One removal method involves rotating a metal or fiber belt through the wash tank, having the oil cling to the belt, then scraping it off. Easy to maintain

Terrien and Walker take a different tack.

Their system uses a floating skimmer that sucks the topmost sliver of fluid in the wash tank - since oil is lighter than water, that's where the oil is - then sends it to a gravity separator that removes solids and sorts oil from any remaining water suctioned from the tank.

While some other methods are maintenance nightmares, the SmartSkim system requires relatively little attention, said Ed Mitchell, vice president of sales and marketing at Treat All Metals Inc., a Glendale heat treater that bought its first SmartSkim separator more than four years ago, then added another.

"We wouldn't make a second purchase if the first one wasn't right. . . . The guy's got a good product," Mitchell said.

Besides reducing the need for maintenance, he said, the SmartSkim system delivers cleaner parts. If parts emerge from the washer still oily, the oil would burn in the second furnace, spewing huge amounts of smoke into the factory and possibly the air outside.

Terrien said he had been in plants so fouled that workers bent over to keep their heads below the thickest smoke.

At the Chrysler transmission plant in Kokomo, the environmental impact of installing the SmartSkim separators "has been tremendous," McCulley said. Before, he said, smoke poured from furnaces as they burned off the oil clinging to parts after they'd been washed. "We don't have that anymore," McCulley said.

SmartSkim also allows less-frequent changes of wash water - saving money on disposal costs - and can yield separated oil pure enough that companies can sell or recycle it rather than paying to have it hauled away, Terrien said.

His company's Web site features endorsements from the likes of DaimlerChrysler, Caterpillar and Bell Helicopters.

SmartSkim has gained notice from other quarters, too.

The firm was a winner in the Governor's New Products Awards Competition in 1999. This year, Fast Company magazine honored Terrien by including him on its "Fast 50" list of innovators.

Terrien declined to disclose Universal Separators' sales, but said they jumped 52% in 2003.

"And this year is at a faster trajectory," he said. "This year, it's just off to the races."

The firm recently hired an outside sales manager - Terrien had been handling sales - and envisions less emphasis on heat treating.

The company's future, Terrien believes, lies in providing its equipment to metal-cutting manufacturers who need to remove oil from pricey machine coolants.

Originally, Terrien envisioned Universal Separators simply as a vehicle to provide a living for two or three families. But having tasted approval in the market, he's changed his view.

He and Walker, who continue to hold 65% of the company, sold a piece to angel investors in 2001, and brought in two venture-capital firms last year. The company also named an outside board that has lent needed expertise in such areas as accounting.

Terrien predicts Universal Separators can grow ten-fold and produce a payoff for its founders and investors.

He's not just dreaming; since making the Fast 50 list, he's gotten two calls from an investment banker interested in the firm.

"Everything's for sale," he said, "and sooner or later, somebody's going to buy the company."

Link to Milwaukee Journal Sentinel article