But that brand was sold in 1987 when Netherlands-based Benckiser bought Ecolab's consumer business. It sold powdered and liquid detergent to restaurants, hotels and consumers, eventually developing a winner in Electrasol dishwasher detergent. Ecolab's net income has nearly doubled, from $81 million in 1993 to an estimated $153 million in 1998.Įcolab started out in 1923 in a St. "Is somebody else's product cheaper?" Orobono asks. Automatic measuring systems combine chemical concentrates with water and dispense the stuff, eliminating the need for employees to measure the amount of chemical themselves. John Orobono, vice president of purchasing and distribution at Aramark, a huge managed-services business, is an avid Ecolab fan.Īramark uses 150 different Ecolab products, everything from hand soap to laundry softener to rinse additives.
Ecolab gets premium prices because it saves customers money in these other areas. Energy, labor and damaged linen and dishes are far bigger items.
But soap costs are just 6% of the total cleaning expense in a typical operation. Indeed, Ecolab's soaps are often more expensive per pound than competitors'. But Schuman, 64, sees his company as selling not merely chemicals but solutions to cleaning problems. If you look at commercial detergents as just a bunch of chemicals, you have a commodity business on your hands. The remaining, less-profitable revenue comes from an assortment of services, including pest elimination, food-factory sanitizing, janitorial work and industrial laundries. This institutional operation accounts for about 40% of the company's $1.9 billion in estimated 1998 annual sales but about 50% of its operating profits. Paul, Minn., Schuman sells detergents and other cleaning products to the kitchens and laundries of hotels and restaurants.
So we have now complicated the hell out of it."Īs chief executive of Ecolab in St. "We put this electronic gizmo computer on top of the thing, and it tells the customer how long the machine is on, how much soap is being dispensed, how hot the water is, are you using too much energy?" "Here we have the solid soap that goes into the machine," he says in his Bronx accent, explaining a soap dispenser for a commercial dishwasher. 0.16-0.7 MPa (1.6-7.ALLAN SCHUMAN is in the middle of his pitch.
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