She runs a $5M/yr pavement manufacturing company

Welcome to another Founder Wisdom pod. We have Helen Torkos with us today. She's a founder at Regentech Americas, has a very cool background and is in the infrastructure business of things. She's building roads. She manufactures thermoplastic road to be precise. I'm eager to learn more about thermoplastic roads. She was the owner of Third Avenue Consulting in 1997. So not her first business. Ellen, welcome to the pod. Tell us a bit more about yourself and what you've been up to.

Thank you, Charles. I appreciate the podcast and to be able to share my story with you. So we— I am a— originally my background was in risk management and insurance. I was in insurance for over 30 years. I lived in Brooklyn, New York, and I married a Canadian, moved up to Canada, lived up there for 25 years, and my husband was in manufacturing. Um, when our children grew and they became eligible for universities, they came down to the U.S. So my husband and I said, you know what, we need to start our next chapter. What are we doing? Let's go down to the U.S. Now what do we do? So based on my background and my husband's manufacturing background, I had a brother that had contracts with the New York City DOT and he was a striping contractor. These contractors or these contracts are major contracts. And for the longest time, he complained about why is the material so expensive to bring up because all these manufacturers are in the South and he's bringing up material from the South coming into the Northeast. So his complaints, I listened and I said, you know what? Sometimes the greatest business opportunities don't come from a business plan. They, they come from listening to someone complain about a problem nobody has solved. So my husband and I said, you know what, it's an opportunity to look into this. Let's do some research. Now, I know nothing about manufacturing. My husband did. But we thought, you know what, let's figure out if we put a plant Close to where the end user is. What is that going to cost? We've got to buy a building. We've got to buy equipment, machinery. Let's put that all together. Now, the next thing was learning about the product itself. So did some research. We found out that a Swedish company actually manufactured the equipment. Contacted them. I went out to Sweden. And did some training there because thermoplastic is a little bit different than just paint. It's not paint. It comprises about 7 to 11 different raw materials, including pigments, glass beads, resins. It's a product that is melted on the road. So it's a lot more than just a liquid. And I remember our insurance carrier said to us, So workman's compensation, how many people are going to drown in paint? And I said, we don't have paint, it's all granular. So it's a different kind of product. All of this was researched. I needed to find out formulations. And one good thing about it, and I, I recognize this, when our competitors from the South were making product, they were making it for their Southern customers. The, the Northeast has a different climate.

It—

we have cold winters, hot summers. That pavement contracts and expands. So we needed to find a product that was able to withstand that kind of climate. Sweden was the ideal place, very similar to what the Northeast climate is. So we took their formulations. Now we needed to get approvals. The approval process was, was a hurdle because who are we? What do we know? We needed to prove ourselves. We needed to prove that our product was good. So we had material made in our backyard, technically, to test it, sent it up to the DOTs, to their labs. They tested it. They said, well, it passes all the spec. So you guys are good. Let's put you on the qualified product list. New York City DOT was our first customer, which was pretty big sales, especially when the DOT budget is over $1 billion. So being in Long Island, we knew that we could deliver a truckload to a customer within a day's drive, and which is something that they were not getting serviced by the the competitors down south. So this was a plus for us. Now, another thing that we noticed is we're in a location— there's a rule of thumb, a formula that I really believe in. For every person in population, it's 7 kilograms of thermoplastic pavement markings. So when you put yourself into a 600-mile radius of major cities, urban areas, that product goes a long way. That product is in demand, high demand. So we figured being in Long Island, we are in the backyard of New York City, Boston, Trenton, Philadelphia. We can get product to these customers that were putting down material, and it would be very easy to do. So our first plant was set up in 2018. We started selling and, uh, from there we grew. We started to, uh, look into other states and get approvals there.

Um, and you started at $800 grand of sales a year. My first question is, how big are the profits margin in your space and how do you optimize for those?

So technically we are at between 27% and 32% profit margin, um, and that's based on material coming in, uh, from overseas, domestic material as well. Um, and of course that fluctuates based on, uh, supply chain issues, and we faced that back in 20— I'm gonna say 2023. after COVID, where the containers coming from overseas went from 2,000 up to 18,000. So there was a lot of issues there. So we tried to, um, bring in material that we can keep in-house inventory so that we can keep our prices down. Technically, with tariffs, with increases in supply chain, Um, who is actually paying for this is the DOTs. It's the taxpayers. So for us, it's important to keep our prices level, and we do have multiple sources of suppliers.

How did that go from $800 grand to, uh, $5 mil, um, which is where you are today? Are you in charge of sales? What's your tips to grow business, uh, to that level?

So we have now hired a national sales manager, um, and he's our, our biggest source. He comes from 25 years in the industry, um, and he's really contracted a lot of major players in the industry and infrastructure. So, um, our sales grew from us— from me being the sole salesperson just in the Northeast, just traveling around into the different states that we can access between New England and New York and New Jersey. And we now have grown into 10 other states besides those, and our approvals are in. So we're able to sell to a lot more customers and grow our business. So we have reached the $5 million. In addition, Regentech Americas began in March of this year, and basically we are now under the parent company of American Polymers. And they have expanded our footprint right out to the West Coast. So our next plant is going up in Los Angeles, just outside of Los Angeles, back in— beginning in February of 2027. So we're excited about that growth.

And who are you competing against? And the biggest guys in the field, how do you 100x your company to compete with them?

So we, when we started, we were the smallest in the industry. Our major competitors was 3M, PPG, Innes-Flint, Swarco, which is the Swarovski family. So these were our biggest competitors. We were small potatoes. We were very small and we literally just started and we wanted a very small piece of the pie. So we kept under everybody's radar. We didn't, we weren't flashy about it, about what we're doing or who we're selling to. But word got out that our product was, was really good. So we got more demand, people saying, well, why aren't you in Kansas? Why aren't you in Tennessee? Why aren't you in— so we started to expand, and that's when our competitors got a little bit edgy. And, um, not that we are— we are competitors, but we all sit at the same table when we talk about infrastructure and issues. Uh, we're part of the American Traffic Safety Services Association, and I sit on the pavement marking committee. along with 3M, along with PPG. And we all talk about what the issues are. And we understand that we all need to compete. I had a competitor down in Georgia, very large competitor. And we talk on major issues that are coming. Supply chain is one of them. And I remember him saying, well, I don't expect you guys coming down to Georgia. And I said, well, I don't need you coming up to New York. So we kind of laughed about it and said, okay, Okay, we have an understanding. Not that it's gonna happen, but again, it's— we have a good feel of respecting each other, respecting everybody else. When the salesperson shows up at a customer, whether they're wearing Regentech America shirt or they're wearing, uh, PPG shirts, it doesn't matter. The customer still wants product that is quality, a product that's going to understand the climate, and also a price, a good price. Now, if you're trucking from Georgia or trucking up from Texas, that cost of that truck being $2,000, $3,000, $4,000 versus what it's going to cost me under $1,000 to ship to a customer, there's a huge savings there. So everybody kind of takes a piece of the pie. If the southern competitors stay in the south, that's great, we're all good. Now, if I decide to sell to a customer in the south, I'm not going to take a big chunk of that pie. There's a lot to go around. There really is.

Give me the full price.