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Bruce Lounsbury, Newterra CEO, says modular approach is key to water filtration and sewage treatment company’s success.

Lars Hagberg/The Globe and Mail

For Newterra Ltd., the key to selling innovative products is to think inside the box.

The Brockville, Ont.-based company makes sewage treatment systems for remote locations. Its products combine advanced filtering technology with a modular approach that packages its equipment inside standard shipping containers.

The containers – essentially giant steel boxes – can be easily shipped just about anywhere, and the capacity of a system can be increased merely by adding more units. That is hugely appealing to mining or oil and gas firms that need to process sewage at remote camps in the Canadian North, Africa, South America, or anywhere around the world.

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"They ship in modules and literally assemble them on site in the middle of jungles and on the side of mountains," said David Henderson, managing director of Toronto venture capital firm XPV Capital Corp., which invests money in companies that are developing leading-edge water technologies – including the privately held Newterra. "The very cool thing is that they assemble like Lego blocks."

Newterra is currently delivering a sewage treatment plant packaged in 26 large shipping containers to a mining camp in Zambia, where it will process the effluent generated by 8,000 people. The system will be fully operational within a few weeks of its arrival, and less than six months after the order was initially placed. That's a huge advantage compared to the time-consuming process of building a sewage plant on site – a two to three year project.

Another large plant, still in the planning stages, will serve 15,000 people at a construction camp in a remote oil and gas project in northern Alberta.

A key advantage of these sewage plants, said Newterra chief executive officer Bruce Lounsbury, is that they can expand or contract, depending on the needs at the site. A typical mining operation may start with a handful of employees, expand to a huge work force during construction, then settle back to a smaller number of workers during production. Bringing in or removing modular sewage processing units can easily accommodate that shift.

The company, which now has about 200 employees, settled on this "plug and play" approach soon after it was founded in the early 1990s, Mr. Lounsbury said. He and his partner Robert Kennedy (now the company's president) were then making systems to clean up groundwater contaminated by gas stations or dry-cleaning plants. "Our skill was taking relatively understood technologies and modularizing them," he said.

After about seven years of expanding that groundwater remediation business, mainly in the United States, the company was looking for a larger market, and decided to add sewage and waste water treatment to its portfolio. In that bigger game, however, advanced technology is crucial.

Newterra settled on what are called membrane bio-reactors – a technology originally invented in Canada that uses layers of semi-permeable membranes to draw clean water out of a waste-water soup. Eventually, the company purchased its German-based membrane supplier, so it now has more control over the technology.

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Indeed, Newterra takes an unusual approach in today's world of outsourcing, in that it controls its entire supply chain, from the membrane maker to its Georgia division that builds its steel tanks and components, to its manufacturing operations in Brockville. At the same time its on-the-ground service and support people gather client feedback that helps it adjust systems to closely match customers' requirements.

"The bulk of our innovation is through working with the customer and coming up with a design that meets their needs," Mr. Lounsbury said.

While Newterra has so far sold most of its systems to resource companies, it is increasingly eyeing markets that aren't in remote locations.

Already it has installed a sewage system at a small condo and motel development just outside Brockville, and it is making treatment plants for a B.C. housing development, a golf course clubhouse in Western Canada, and a campground in Ohio. In the future it sees the potential for decentralized sewage processing in municipalities. Instead of expanding over-taxed central sewage treatment plants, cities could add strategically placed stand-alone plants to complement their older operations.

"Maybe it will be five or 10 years before cities start to think seriously about decentralizing [sewage treatment], but we will be there," Mr. Kennedy said.

Waste to water

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What is the water used for?

The water that is withdrawn from Newterra's sewage treatment systems in North America is released into the environment, or used for irrigation, dust suppression or the flushing of toilets.

Is it drinkable?

With very little extra treatment it would be drinkable. But that reuse of waste water is a hard sell with consumers in North America, where less than 5 per cent of water is directly recycled.

In other countries – particularly those with severe water shortages – attitudes are different. In Singapore there is "basically toilet-to-tap," said Newterra president Robert Kennedy.

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