In the Spotlight

Interstate Waste Services: Full Speed Ahead

Despite the economic development over the last couple of years, Interstate Waste Services’ commitment to continue growing has given them market advantage.

Today’s Interstate Waste Services (Ramsey, NJ) was formed from the acquisition of two companies—Northeast Waste Services in November 2005 and Interstate Waste Services in 2006. While Northeast Waste Services was primarily a landfill-based company with facilities in Massachusetts, Vermont and Pennsylvania, Interstate Waste Services was a collections and transfer station company based in Southern New York and Northern New Jersey. New York City-based private equity company Highstar Capital owns Interstate Waste Services, and was the driving force behind the decision.

At the time of the merger, the companies had revenues of approximately $80 million each; from an integration standpoint it seemed sensible to merge the two companies under one umbrella. As a result, there was little operational overlap, and a majority of the employees stayed on. With the advantage of vertical integration, the waste flow was redirected more efficiently. After the merger, Interstate Waste Services spent the better part of 2007 and 2008 putting a structure into place to allow for further acquisitions. Since then they have completed several purchases throughout their market areas. Now with more than 650 employees and serving over 16,000 commercial and industrial customers, over 44,000 residential subscription customers and holding 43 municipal contracts, Interstate Waste Services currently works with solid waste and recyclables and has operations in Vermont, Massachusetts, New York, New Jersey, Pennsylvania, Maryland and West Virginia.

An Aggressive Strategy

Due to the fluctuating price of fuel, it was challenging for Interstate Waste Services to internalize volumes from New York and New Jersey into their Pennsylvania locations. According to Dan McGowan, Vice President of Business Management, “That is what has given us the reason to look to continue to expand into the Pennsylvania marketplace—internalizing those volumes into our own landfills.” Not only has the company expanded into Pennsylvania, but they have also focused on large municipal bids over the last couple of years, currently holding part of the New York City-Manhattan contract as well as part of the New York City-Brooklyn contract, and two New York City bio solids contracts. They also have contracts from Carol County, MD and Fredrick County, MD.

Dealing with a tough economy means taking on a competitive environment in the Northeast marketplace. In addition to focusing on municipalities, McGowan says they have used the company’s growth and alternative projects to offset some of the declining volume they’ve seen over the past couple of years. “As volumes in the Northeast have declined, we as a company envision new possibilities. An example of this is putting in landfill gas-to-energy projects in two of our landfills—the Cumberland County Landfill in Shippensburg, PA and the Moretown Landfill in Washington County, VT.”

Partnering with PPL Renewable Energy,the projects were put into place in 2009 and have been very successful. The two plants reduce annual greenhouse gas emissions by over 118 million pounds of carbon dioxide, which is equivalent to:

  • Removing 9,900 cars from the road;

  • Not consuming 6 million gallons of gasoline;

  • Reducing the import of 125,500 barrels of oil; and

  • Not using 2.25 million propane cylinders for home barbeques.

Community Outreach and Training

Working closely with the municipalities and their communities that they serve, Interstate Waste Services is very active with area community programs, including giving landfill tours, participating in a public education program with area schools, providing containers to local community events or taking part in activities for a local charity, such as 5K walks.

In addition to community outreach, Interstate Waste Services’ training programs emphasize safety. “Safety is a key part of the company,” says McGowan. “Our detailed safety programs constantly reinforce the importance. Each quarter, the managers (including the CEO, Michael de Castro) spend time in the field with the employees. They go on the road and observe what takes place and then talk with the employees afterwards about what they saw and how things can be improved.” Interstate Waste Services also has a Vice President in charge of health and safety, Bobby Greene, and each market area has a dedicated safety professional. “We feel the need to have dedicated safety people to ensure that our programs are running most efficiently and effectively,” says McGowan.

Facing Regulations

In order to handle changing regulations, Interstate Waste Services has a Compliance Department led by Vice President of Environmental Affairs, Mark Harlacker, who handles all of the company’s compliance issues and landfill expansions. “Our group does a tremendous job of working with other State Compliance Departments in order to ensure that we are doing everything we need to be a good partner,” says McGowan. “That has allowed us to grow multiple facilities—not just in terms of additional landfill capacity, but also in terms of capacity per day.”

McGowan does stress that although it is a challenge keeping up with different state regulations, particularly with regard to landfills, the company has specialists in each state who are dedicated to staying on top of potential changes and making sure the company is staying in compliance. “From a country standpoint, we have started to see items like e-waste arise and we’ll monitor what happens in different states to see what we need to do to stay ahead of the curve. Do we need to start regulating e-recycling? What process do we have in place in order for us to be ahead of the curve on those types of issues? Since each state is different, having multiple operations allows us to see what happens when a regulation is implemented in another market,” explains McGowan.

Continuing to Grow

Despite the economic development over the last couple of years, Interstate Waste Services has a commitment to continue growing. McGowan says, “In 2009, we bought a standalone company in Western Maryland. In 2010, we bought a standalone collections operation in the Johnstown, PA. In August 2010, we purchased a company in Bethlehem, PA (which also had two transfer stations). Then, in 2011, we purchased a collection company in Bucks County, PA, as well as a landfill in Reading, PA.” He points out that the company’s owners are constantly looking for ways to expand. “One of the things we’ve been successful at is purchasing companies that give us a new geographic footprint. In some new markets we are not as heavily involved in the municipal collection business, so we’ve been able to get into those markets and sell ourselves as having that experience in other areas. This helps when we are pursuing those municipal contracts,” explains McGowan. Interstate Waste Services is likewise looking at opportunities in other states closer to where they are currently located. “We are a growth company so we have several different acquisitions in the pipeline that we evaluating to see if they make sense for us. We are looking to continue to grow both organically and through acquisitions,” says McGowan.

The Future

Currently, Interstate Waste Services is assessing how they can provide additional value-added services to their customers through cost-effective recycling. “As a company we firmly believe that recycling is going to continue to expand and we want to find the best way to provide services for our customers,” says McGowan. In addition, the company plans to continue growing through partnerships with other companies that are already specializing in niche recycling.

Interstate Waste Services will continue to acquire other companies as needed and will also expand their landfill gas projects. In addition, they will go on working with municipalities to grow that segment of the business. Says McGowan, “During this economic downturn, we’ve grown the company and will continue to do so. We want to see how we can keep on expanding and find markets where we think there is opportunity.”

For more information about Interstate Waste Services, contact Beth Adams, Marketing Manager, at (201) 258-1216 or via e-mail at [email protected]