"Our reason is water." These four words explain a key strategy that helped Advanced Drainage Systems grow from a two-person startup to a global supplier of bellows and water management solutions, used globally Over 10 billion feet of pipeline.
Humble beginnings... If you ask processors to trace their roots today, many people will use these words. The Advanced Drainage System (ADS) is no exception. It was launched in Wilmington, Delaware in 1966 by Ron Martin and Marty Sixt. These two engineers grew up on a farm and knew a thing or two about maximizing crop yields through better water management. Together, they remodeled the old extruder—in the words of Brian King, Executive Vice President of Product Management and Marketing at ADS, “put parts and parts together” and established a company that focused on HDPE corrugated pipes as a farm water distribution An option for clay tiles.
In the following years, ADS added talents, technology and facilities. It moved to Ohio in the early 1970s and began building additional factories around the county, which were built within a 300-mile radius of popular markets. ADS has also begun to educate civil engineers, commercial and residential contractors, and anyone else involved in construction and infrastructure, so that they understand that plastic is superior to the more mature steel and concrete in water management.
Today, thanks to product development, acquisitions of competitors such as Hancor, and a strong focus on truly sustainable development, ADS has become one of the largest drainage pipe manufacturers in the world. It is headquartered in Hilliard, Ohio and is now a public company with 65 plants in North America (3 plants in South America through joint ventures), more than 5,000 employees, and approximately 1 billion pounds of extrusion capacity per year And double growth in decades. Digital growth has brought annual sales to 1.9 billion US dollars. It is estimated that it has more than 10 billion feet of pipeline in use worldwide.
ADS N12 corrugated HDPE pipe is used for rainwater management and agricultural tile systems.
The company has an unknown number of extrusion production lines across the country, and its mold suppliers design their own molds and have injection molding capabilities for pipe fittings. It complements its corrugated pipe product line (including what is believed to be the first corrugated PP pipe in history) and what ADS calls related products-retention/detention chambers, basins, septic tanks made of extruded PP Systems, special piping products, water-quality units and various connections and accessories. ADS also operates its own truck fleet to strengthen its service platform for customers.
"Over the years, we have had different investors and leadership changes, including becoming an ESOP (employee stock option plan) company," Jin commented. "Our growth is mainly organic, which is caused by the development of new products and the addition of new factories. One of the game-changing products appeared in 1987, when we launched the N-12 corrugated double-walled HDPE pipe with a smooth inner wall. In order to improve the water flow. We extruded green stripes on the corrugated pipe, which has become an iconic symbol and the representative of our brand to let customers know that they are using ADS pipes. We also made acquisitions, the largest of which was Hancor in 2005, It has 15 factories in North America."
ADS went public in July 2014. King believes that this move puts ADS on the fast track of growth and can better attract top talent. "As a listed company, we can easily obtain capital," he commented. He specifically mentioned that the acquisition of Infiltrator Water Technologies by ADS in 2019 may "if we do not go public, it will not be possible." Infiltrator produces PP-based extraction chambers and systems, septic tanks and accessories, mainly for residential applications. Before the acquisition, Infiltrator was a customer and supplier of ADS for 15 years.
ADS sells its products through a network of distributors and major home improvement centers. In some cases, this may be considered a risk because it places a third party between the company and the end user. This may be worrisome in the market served by ADS, King pointed out that compared with other materials such as concrete and corrugated metal pipes, "plastics are still the new kid on the block." "But our distributors are our partners and will not hinder us from developing and maintaining relationships with end customers. We usually share new product designs and prototypes with them because their opinions are very valuable."
He continued, “Our sales staff and distribution partners work together, which is critical to the ability of JIT and customers to get the right products from one place. We have people in sales, engineering, product development, and other fields, and they work every day. Talk to our distribution partners, engineers, contractors and city officials."
Nowadays, with the booming development of residential and commercial buildings, these relationships benefit ADS. King said: "The key drivers we track for our business-commercial construction business, infrastructure, residential-are all positive. For a while, during the pandemic, we were a little worried about the commercial sector. But as the company We began to take the tightening of the supply chain and reflow seriously, and we saw the start of warehouse and large manufacturing plant projects, and this situation has rebounded."
ADS can extrude corrugated pipes of various diameters and lengths.
With the approach of the National Infrastructure Act, ADS also faces opportunities. Commented on King, "Plastic pipe is a sustainable product. It is installed faster, and from a value proposition, it is better than competing materials. In discussions about the content of the bill, the term "elastic infrastructure" has been used many times Emergence. We must rebuild in a flexible way, and we believe that plastic pipes are the most flexible solution."
ADS believes that its ability to "make money using post-consumer recycled materials" is an important difference between it and its competitors. Since 2007, ADS has obtained more than 30 patents in the recycling field, has set standards on how to deploy post-consumer HDPE in bellows, and has worked with industry groups to develop guidelines. The purchase of Infiltrator has pushed the amount of recycled materials used by ADS to approximately 550 million pounds per year. .
ADS starts recycling by purchasing waste from third parties (including other processors). Now, ADS Recycling operates nine recycling plants across the country, processing post-consumer and post-industrial waste. "But obtaining recycled materials is still a challenge," Jin said. "If we can add more to our manufacturing process, we will. In fact, we want to double the amount of recycled materials contained in our products without reducing the amount of raw materials we run."
"We want to double the number of PCRs contained in our products without reducing the amount of raw material we run."
In particular, ADS is looking for more sources of post-consumer PP and has joined recycling partnerships to assist in this work. The Recycling Partnership is a national non-profit organization that works with communities and companies to improve recycling systems. Its financial partners include various material companies, processors, brand owners and retailers.
ADS recycles more than 500 million pounds each year and hopes to double this amount.
All in all, considering that products of various lengths and diameters can be ordered, ADS has 20 different product categories and thousands of SKUs. Even for manufacturing operations such as the size and scope of the company, this will complicate the problem. "No matter when and where, we like to turn on the machines and run them for as long as possible," Jin said. "But we are not always able to do this. Demand changes. The challenge for our operations team is how do you support manufacturing when demand changes? When our customers need products, how do you do it in the most profitable way Provide them with the products they need?"
"Today, due to the very high demand, every product that goes offline is likely to be sold immediately and delivered to someone."
A typical operation of ADS can last for several days. Manufacturing is set up using product wheels. In ADS, this means that jobs are scheduled from smaller to larger (diameter) and longer to shorter (length) to minimize conversion. Some factories operate at 24:7. Most pipe ADS extrusion is a single layer made of a mixture of multiple materials. King said that ADS has done some co-extrusion, but more multi-layer structures may be about to emerge.
He explained: “We are always looking to make better products, more complete packaging and systems. We are looking at market segments that we underpermeate compared to metals and concrete. In some applications, there are structural loads. Then, there are structural loads. How do you use plastics in these applications? This is where coextrusion may appear."
The operator sticks to the corrugated HDPE pipe with the iconic green line.
Regardless of whether it is one-layer or multi-layer, ADS has not inventory products recently. "Today, due to the very high demand, every product that goes offline is likely to be sold immediately and delivered to someone," King pointed out. "If we make it, we are selling it. Under normal circumstances, we keep a certain level of inventory and ship from it. Distributors help by storing certain products."
ADS has been adding materials science and engineering experts to the team to help transform ideas collected in regular field research into products. "We are committed to solving the right problems. The best way is to go out and talk to distributors and customers, observe what they are doing, experience the challenges they face, and use this information to develop products that solve these challenges," Jin said. He pointed out that the company has recently made significant capital investments in new extruders and injection molding machines to cope with growing demand.
"Our reason is water," Jin said. "We capture it in some form of pool, pipe it, store it in some of our retention/detention systems, and then process it before returning it to the environment. This shapes how we look at the product and Applications, how we manage our product categories, and even how we market. Ultimately, this will allow us to make better products and communicate with people what we do and how we do it. We are the environment and water housekeeper."
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