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Expanding its niche

From Tuesday's Globe and Mail

Eco Waste

Steve Meldrum, head of Eco Waste Solutions. (PETER POWER/THE GLOBE AND MAIL)

At Eco Waste Solutions' plant in Burlington, Ont., one of the company's large industrial waste incinerators awaits final assembly before being shipped to a mine site in Venezuela.

It's here, in its vast warehouse, that Eco Waste is about to tackle its most ambitious job yet: $4.6-million contract to supply four portable waste incinerators over a period of nine months to the North Atlantic Treaty Organization.

“It's a great win for us,” said Steve Meldrum, the company's president and chief executive, noting that Eco Waste beat several European and North American competitors for the contract.

It's a big achievement for a company with only 13 full-time employees, he said. “It's gratifying that in a large international competition, this little Canadian company [won].”

For Mr. Meldrum, 39, the contract also confirms the little company is on the right track. Eco Waste was founded in 1994 and he joined in 2003; two years later, he and other senior officers bought out the company's private investors.

When he joined the company, he said, it had sound technology but lacked direction and market focus; it was chasing business all over the world and trying to find as many different applications for its equipment as possible.

But for a small company with limited financial and human resources, it was not a winning strategy.So Mr. Meldrum and Jean Lucas, director of business development, mapped out a new direction for Eco Waste.

The company, they decided, should focus on providing waste-disposal equipment for use on military bases, mines, oil rigs, and in remote communities with no access to landfills. “This is what we are good at,” Mr. Meldrum said. “This is what really differentiates us.”

Mr. Meldrum and Ms. Lucas also decided to focus on markets in North, Central and South America partly because countries there have the same time zones as Canada, meaning Eco Waste employees could field phone calls from prospective customers, an important thing for a small company with no call centre.

“It's also where we had the most traction,” he said. Eco Waste had made a few sales in Asia and Europe but it was making real progress in the Americas and worked to forge strong ties with large engineering firms such as SNC-Lavalin, Hatch, Amec and Fluor.

Mr. Meldrum acknowledges that it was a bit risky to target a narrow market niche, in terms of geography and types of industry.

“That's where we had to place our bet and if it didn't pan out, it didn't pan out but it was the best shot we had.”

Eco Waste's incinerators, designed to meet European and North American emission standards, consist of multiple chambers. One chamber burns food and household waste, reducing it to non-toxic ash. Another chamber treats smoke and gases produced by the first chamber, leaving behind only odourless and colourless emissions. Depending on size, each unit can treat from 100 to 10,000 kilograms of waste a day; they range in price from $100,000 to $1-million.

“There is a stigma around the word incinerator” in North America, Mr. Meldrum said. But in many remote places with no access to landfills the only other option for treating garbage is open burning or using older incinerators which produce smoke and more pollutants.

Eco Waste incinerators have been shipped to mines in Canada and South America, including the NWT's Snap Lake diamond mine and the Polaris zinc mine in Nunavut. It has also sold units to the Cree Nation of Wemindji in northern Quebec, and to several Canadian military bases in Nunavut and U.S. Air Force Base on Wake Island in the Pacific.

In 2007, through its ties with the Canadian and U.S. military, Eco Waste heard about a lucrative NATO contract to provide four custom-built incinerators for military use. Although the organization's procurement arm, NAMSA, is in Europe – and thus outside Eco Waste's target market – the job was a good fit with the company's expertise, Mr. Meldrum said. And NAMSA has representatives in Toronto, close to Eco Waste's plant.

To prepare its bid, the company sent employees to Luxembourg to meet with NAMSA officials and then spent six weeks compiling the detailed tender. The incinerators must be able to withstand extreme climatic conditions, from Arctic cold to desert heat, and be able to operate in high altitudes and rain forests.

“The engineering that is required around that is quite substantial,” Mr. Meldrum said. “We needed to make sure that everything in the design can be applicable to each of those areas.”

Eco Waste submitted its bid in January, 2008 and won the contract early this year. The incinerators will be able to process up to 2,000 kg of waste a day, the amount generated by a 500-person NATO camp.

The contract came at a good time for Eco Waste – just as demand for its equipment from the mining industry began to slow because of the recession. Mr. Meldrum predicts the NATO job will help boost the company's revenues to between $5-million and $6-million this year.

The NATO project is also giving Eco Waste international exposure; it has received inquiries from other military groups and engineering companies. “The credibility that this lends us is terrific,” Mr. Meldrum said, who also plans to hire two more full-time employees as a result of the contract.

He also sees opportunities to expand the product line, perhaps adding heat-recovery capabilities to capture excess heat from the incinerators and divert it to run boiler and hot-water systems.

Mr. Meldrum predicts demand for his company's products will grow as environmental regulations become more stringent around the world. Even so, Eco Waste plans to maintain its tight market focus.

“We still have a limited amount of resources that can be applied to [seeking out] new opportunities,” he said. “Now it's almost more critical to maintain that focus because we are going to be tempted that much more.”

Special to The Globe and Mail

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On Friday at 1 p.m. ET, Steve Meldrum joins us to talk about his company's breakthrough. Click here to submit your questions and comments ahead of the discussion (you must be logged in).

Expert Insight

"When you are pursuing the elephant — the very big contract — you want to try to do that in a calculated fashion so that if you lose, [you can learn from it and] win the next time," says Peter Brown, national leader for private company services and managing partner in the Toronto office of Deloitte & Touche. On Wednesday, Mr. Brown discusses the importance of striking the right balance when it comes to growth. Click here on Wednesday to read the interview.

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