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Calgon Carbon poised for explosive growth

| Tuesday, Oct. 21, 2014, 10:48 p.m.
Randy Dearth, CEO of Calgon Carbon Corp., displays a handful of granular activated carbon in his Robinson office, Tuesday, Oct. 7, 2014.
Keith Hodan | Trib Total Media
Randy Dearth, CEO of Calgon Carbon Corp., displays a handful of granular activated carbon in his Robinson office, Tuesday, Oct. 7, 2014.

In a little more than two years as CEO of Calgon Carbon Corp., Randy Dearth has begun companywide restructuring and decided to move its headquarters from Robinson to a building in Moon.

He is preparing the company, which makes carbon-based filtration products, for a potential boom in demand for its main product, activated carbon, which is used to remove impurities, especially from food and water.

Dearth, 48, is applying experience he gained as an executive at Bayer Corp. in Robinson, beginning in 1988, and as CEO of chemical and plastics producer Lanxess Corp. in Robinson from 2004 to 2012.

He became Calgon Carbon CEO when John Stanik retired in June 2012.

Early next year, Calgon Carbon will move to Westpointe Corporate Center Four, one of the region's most environmentally friendly buildings, he said. The move will combine Calgon Carbon's research laboratory with its corporate staff, now separate in Robinson.

The Tribune-Review recently talked with Dearth in his office in Robinson. Here are edited excerpts:

Trib: Future growth appears dependent on environmental regulations to reduce mercury levels in coal-fired power plants and other environmental rules. What's the impact on Calgon Carbon?

Dearth: Power plants are going to be required to take out all the mercury that's formed when you burn coal. The Environmental Protection Agency has been preparing for an April 15 startup. What they have found is that when you inject activated carbon, pulverized to a talcum powder-like consistency, into the smokestack where coal is burned and you have the gases ... the mercury attaches to it. They are able to remove 90 percent. ... It's the largest single new market we've ever seen.

Trib: What's the financial impact on Calgon Carbon?

Dearth: The market today for activated carbon is about 600 million pounds in the United States each year. This new mercury market alone will be anywhere from 350 million pounds of additional demand ... to about 550 million pounds. There are only three suppliers for this application in the United States. The others are Cabot/Norit and AEA CS. We have invested a lot of money in our Flu Pack, the trade name for our proprietary modification of carbon. ... Power utilities can use about 50 to 70 percent less carbon to reach the 90 percent standard. Less carbon means less cost.

Trib: What is activated carbon?

Dearth: It is a little pellet of carbon that has a tremendous pore structure, the equivalent of one football field, that will take out impurities. It's used a lot in water and food applications. One is the water filter in a home refrigerator. ... At large municipalities, the beauty of that is they can ship activated carbon back to us to be reactivated when it is full. ... We put it in a furnace, drive off the impurities at high temperatures and then send it back to the customer.

Trib: Since you joined Calgon Carbon in June 2012, the stock has surged from about $12 in late 2012 to about $23 this year before falling back to about $20. Why has Wall Street blessed the stock?

Dearth: There's a lot of value at Calgon Carbon, when you consider all the regulation around air and water. We mentioned mercury; there's a lot around municipal drinking water. But I think investors are looking for companies that are right there at the cusp of new regulations taking effect. So we make a good environmental solutions-type company for a lot of investors. We've done several stock repurchases in that period of time.

Trib: In May 2013, you announced a strategy to cut annual expenses by $30 million by the end of 2014. Why was that necessary?

Dearth: We weren't really operating at the highest level we could. We closed a plant in China. We had way too many products, so we reduced that by 45 percent. We did an early retirement program. We reorganized our business units. Procurement has been a big player. I brought in an executive ... who knows global procurement — everything from how we buy cars and credit card usage to warehousing. The $30 million is now a $40 million program, all of which will be implemented by 2016.

Trib: What other products are you working on?

Dearth: We're looking right now at the ultra-capacitor market. These are electric storage cells that help make hybrid vehicles stop and go. When the car stops, it stores energy from braking systems, and when you put your foot on the accelerator, it helps hybrids accelerate. The carbon that's in that cell is able to store energy. We're doing a lot of work right now with manufacturers to get our products qualified.

John D. Oravecz is a Trib Total Media staff writer. Reach him at 412-320-7882 or joravecz@tribweb.com.

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