Cogentrix was not alone in jumping on the cogeneration bandwagon in the early 1980s. Several initial public offerings for cogeneration companies hit the market in that period as cogeneration became a hot item on Wall Street. Many of these were tax-driven deals put together by lawyers and accountants. Many fizzled.
Cogentrix is the antithesis of that. George Lewis is an operations man. He believes that Cogentrix must remain a private company in order to keep the business moving fast in a progressively deregulated marketplace. Because of his standardized approach to plant design, 80% of Cogentrix's employees work in operations, and only 20% work in administration and development. (Other cogenerators, typically, employ less than half their people in operations.) This leads, Lewis believes, to the sky-high availability rate of Cogentrix's plants -- last year its seven plants combined were running 96% of the time, while the industry average is about 78%.
That kind of reliability has broken down barriers. Large utilities, suspicious of upstart cogenerators, willingly do business with Cogentrix. Lewis works closely with utilities in North Carolina and Virginia, determining what part of their grid, or distribution network, Cogentrix can help beef up. The relationship is cooperative, not confrontational. "We enhance their capability," Lewis says.
Standardized design, meanwhile, allows mobility within the organization. "We can take an operator out of one plant on Friday night, and he can walk in the door of another on Monday morning, and it's all the same," says Lewis. Cogentrix can train all its operators on simulators. Employee bonuses are based not on individual merit but on the relative performance of each plant, judged by a standardized set of criteria.
The future looks bright for Cogentrix. Lewis sees an ongoing demand for his product, projecting average growth in electricity demand at 4% a year. Capacity will have to double in the next 18 years to meet that need. He also sees another oil crisis looming in the '90s, assuring coal's future. With the building of each plant Cogentrix signs 20-year contracts for low-sulfur coal that already meets clean-air guidelines for the year 2000.
If imitation is the sincerest form of flattery, then George Lewis must by now have a moderately enlarged ego. Forty utilities have set up unregulated subsidiaries to get into the cogeneration business -- a business they initially resisted, then dismissed as insignificant. Attracting the giants' attention might worry some entrepreneurs, but not Lewis. Cogentrix, he believes, will always be able to do the job cheaper, faster, and better. And besides, life, which began for Lewis again at 55, only keeps renewing itself at Cogentrix. "When I started the company in 1983 I figured there was a six-month window of opportunity," says Lewis. "I still think there's a six-month window of opportunity."
FORMER #1 COMPANIES
Where are they now?
1988 American Central Gas
Tulsa, Okla.
From $93 million in business one year to $324 million the next. That kind of expansion -- generated by building eight new natural gas well systems and acquiring eight others -- put 1988's #1 company on the list again this year, at #12.
1987 American Photo Group
Atlanta
As the 1987 Inc. 500 was going to press, APG founder Steve Bostic was selling his company to Eastman Kodak (see "Thriving on Order," [Article link]). Kodak went on to merge its processing labs with those of Fuqua Industries' Colorcraft, and they all now operate under the name Qualex.
1986 ABC Supply
Beloit, Wis.
Founder (and 100% owner) Ken Hendricks's goal is to have a billion-dollar building-supply company by 1994. Sales this year will hit $360 million, in large part from continued acquisition of floundering building-supply companies.
1985 Herbalife International
Los Angeles
When the now-public company reigned over the Inc. 500, sales of its health products sat at a fat $423 million -- an astonishing 109,510% ascent over five years. But investigations by the FDA, the state of California, and the U.S. Senate sent revenues crashing a year later. Sales for the first half of 1989 were $68 million.
1984 Pedus Service
Los Angeles
Slow and steady: that's the growth motto for $110-million Pedus, which did $61 million in sales back in 1983. The national firm has added office leasing and food service to its offerings, but the original security and cleaning divisions still account for 90% of revenues.
1983 The Sigal Cos.
Washington, D.C.
Sigal Construction has also continued to grow, with business this year reaching $143 million, up from $96 million last year. Corporate users are increasingly turning to Sigal; recent jobs include Bell Atlantic's regional headquarters and British Aerospace's flight-simulator facility.
1982 Altos Computer Systems
San Jose, Calif.
Bad news at Altos. Sales at the public computer manufacturer fell this year from $176 million to $140 million, and the company had its first loss ever, of $5 million. Founder David Jackson, who remains at the helm, blames "a general slowdown" in the marketplace. -- Leslie Brokaw
