Alums’ eco-concrete business setting up for green returns
Though more than a generation apart, Chuck Paterno and Jake Pickett see eye to eye on the potential for Probitas AAC to generate some green, beyond the start-up’s eco-friendly construction material.
The Bennettsville, S.C., company, which Paterno, 60, launched on the eve of the economic downturn, is in the business of making and distributing a lightweight, precast construction masonry. With the construction industry back on track, Paterno MS ’79 and Pickett MBAe ’14 expect their manufacturing facility to be delivering product by mid-2018.
“There’s a tremendous demand for this type of eco-friendly building material,” said Paterno, founder and managing member of Probitas AAC. “It is fire and mold resistant, it is energy efficient, and it has the strength of traditional concrete. Yet it weighs significantly less.”
Probitas’ product is Autoclaved Aerated Concrete (AAC), which has been around for nearly 90 years and is a mainstream building supply in Europe, much of Asia and Australia. Though AAC has been used as a load bearing and non-load bearing structural material in the U.S., the cost to deliver the product has restricted its use, as the only manufacturing facilities producing AAC in North America are in Mexico and Florida. Probitas AAC is about to reduce those transportation costs for customers in the Southeast and Mid-Atlantic areas.
The Bennettsville facility is being designed with state of the art technology never before used in North America. Furthermore, the plant will be the only production facility in North America to produce to the imperial, rather than the metric, system. This is the result of Probitas´ management team listening to engineers and end users who work in inches and feet rather than the metric measurement system.
“We’re already supplying construction sites in the Southeast with material our German affiliate manufactures elsewhere until our Marlboro County manufacturing facility starts production,” said Pickett, 31, who as part of a plan to offer key employees a minority equity stake will have equity in the business. Pickett primarily focuses on sales, but says, “Chuck made it very clear early on that as a new business I can expect to be doing anything from managing inventory to quality control. This is what makes it exciting. With this plant, we’re in a prime location to serve about a 300-mile radius, which makes us accessible to high-growth areas like Charlotte, Atlanta, Nashville and Charleston.”
Probitas AAC has aligned itself with the industry’s largest and best equipment and technology producer (Wehrhan of Germany) and the leading producer of AAC (Hebel/Xella). Those relationships assure Paterno and Pickett that Probitas will have access to the best equipment and product for its customers.
AAC comes to a construction site precast, which eliminates set-up and curing issues due to weather. Its mix of sand, Portland cement, a splash of aluminum and gypsum also makes for an environmentally friendly production process, unlike traditional concrete.
With the push toward energy-efficient and weather resistant building materials, from the government and consumer groups, Paterno said use of AAC makes sense, especially for reconstruction in areas that have been ravaged by hurricanes, fires and other natural disasters.
“We feel strongly that as America replaces its infrastructure, it should do so with materials that are longer lasting, energy efficient, fire resistant and have sound resistant qualities,” he said. “AAC has the durability of concrete and the workability of wood. It’s cost competitive and when consumers and builders are exposed to it more, its value will be appreciated.”
Like most successful entrepreneurs, Paterno is looking well beyond the present to determine Probitas AAC’s potential.
“Our projections show the current plant will generate close to $14 million within five years. Depending on the market’s appetite for our construction alternative, studies suggest within 10 years it could be a $500 million industry. We’re already looking at where additional manufacturing sites might be located.”
Pickett said the MBAe training has prepared him well for his current role, and tapping into Paterno’s wealth of business knowledge gained through 20 years of executive-level sales and manufacturing positions has been a bonus. And though nearly 30 years separate the pair, their mentor/protégé business relationship is anything but that of an odd couple.
“Being able to come out of Clemson’s MBAe program and getting into a start-up with someone with Chuck’s experience has been enlightening for me. I’m learning every day and we each contribute, but in different ways. I can’t imagine the synergy between us being any better than it is.”
Paterno, who met Pickett during a speaking engagement in one of his classes, concurs the pair’s chemistry and age differential is bringing unforeseen benefits to his burgeoning business.
“Being able to relate my experiences in corporate and manufacturing benefits younger managers like Jake. He also brings a generational viewpoint that I wouldn’t otherwise have. Not only is Jake my eyes and ears in our marketplace, he brings a social media acumen that is important to any business today. We definitely share a mutually beneficial working relationship.”
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