By Eric Peterson | Apr 04, 2022
Custom separation and filtration technology
Transcend Solutions manufactures technology that removes trace amounts of contaminants from hydrocarbon and petrochenical streams that can cause major problems in the long term by corroding pipes and equipment.
CEO Dr. Matt Thundyil says refineries, gas processors, and petrochemical facilities are the three target markets. "If you can eliminate those contaminants from those streams, those systems operate much more efficiently and profitably," he explains. "What we provide are separation/filtration systems that clean up these gas and liquid streams, essentially removing really fine contaminants from those streams so that they can operate at peak efficiency."
Noting that N95 masks filter out 95 percent of 0.3 micron particles, he adds, "Our technology can remove at 0.3 microns, not 95 percent, but 99.9999 percent -- six nines. We try to create a medical-grade environment in an oil and gas facility, and most people have a hard time comprehending that."
A Texas refinery that used to have to shut down to clean heat exchangers every six months invested in Transcend Solutions' technology four years ago, and hasn't had to do so since.
Thundyil says customers typically realize a return on investment in less than three months. "The United States is now the largest exporter of LNG [liquefied natural gas] into Europe, to reduce European dependence on Russian gas," he notes. "So there's been a number of LNG facilities that have been built in the U.S. At a typical one of these plants, if something happens that causes the plant to go down, it costs them about $10 million a day in lost revenue."
He adds, "The economic benefit is dramatic. The safety benefit can also be quite significant."
Part of Transcend Solutions' success is attributable to taking a custom approach in a market filled with "cookie-cutter, standard products," says Thundyil. "Environmental, Social, and Governance [ESG] has also created a need."
Transcend Solutions makes its products at a 35,000-square-foot facility in Houston. "We chose to manufacture in Texas in the U.S., even though at the time there was a lot of focus on offshoring manufacturing," says Thundyil, noting that Houston was a good base because of the talent pool and proximity to target customers.
Being close to customers is a near-necessity when it comes to custom solutions for legacy equipment, he adds. "Some of these plants are pretty old, some of them built during World War II. They've upgraded them over the years, but a lot of the equipment is 20, 30 years old. If there's a way to upgrade what they have, they prefer to do that as compared to replacing it."
Jenny Blake, Brian Neel, and Tom Stibolt lead the manufacturing operations at Transcend Solutions.
It starts with the manufacturing equipment, much of it proprietary and built in-house. "It's made to be very flexible and customized for our particular operations in the shop," says Neel.
That's critical, because the media and elements in the systems are customized for each client. "We may manufacture three or four up to 14 different products over the course of one day," says Neel. "We do some outside vessel fabrication, but we make all of our filtration and separation elements in-house."
"We build everything one piece at a time," adds Stibolt. "We don't batch any parts or subcomponents of these filters."
Transcend's manufacturing approach is lightning quick -- often turning around orders in a single day -- compared to the industry norm of two to three weeks.
"We can come in and be doing something and change what we're doing really quickly to deliver for our customers," says Blake. "The awesome thing about Transcend is we can go in and be the MacGyver of the filtration world, because we can customize for them and come back and do new product development and give them what they want."
Transcend Solutions has been growing revenue at an annual average clip of more than 30 percent, and the forecast is bright. Thundyil says he expects the company to double in size every two to three years.
"Manufacturing over time has moved away from the United States, and we're some of those people that believe we can manufacture here and be cost-effective and better serve our customers by doing it domestically," says Thundyil. "We've been quite successful at it, but part of it is we have to be able to find talented people in manufacturing and other roles."
Challenges: Hiring and supply chain, says Thundyil, but he also highlights the challenges of bootstrapping the company. "As a relatively small business, it's not so easy to work with financial institutions," he says.
Opportunities: "The United States is a big market," says Thundyil. But he also notes that it's 20 percent of the world's energy, meaning the international market is 80 percent of the market.
Transcend Solutions also has opportunities in hydrogen, ammonia, and other alternative fuels, even landfill emissions. "Those all need to be processed," says Thundyil. "You're going to take some sort of raw material and convert it into something else. Anytime there is a chemical process like that, contamination control is pretty critical."
Needs: "People and capital," says Thundyil, citing expectations to hire 10 to 15 new employees in 2022. "Our entire focus is on an efficient operation and using the cash from that for growth at [30-plus percent] kind of rates."
"We have a tremendous focus on corporate culture," he adds. "We operate in a very slack hierarchy. We don't have a lot of management -- we have talented people who know what they need to do."