Laguna Hills Firm ‘Shields’ Secret Data : Dow Industries Finds Growth in Blocking Electromagnetic Rays
He had just landed a big contract for his fledging construction company, Dow Industries Inc., and Richard R. Willich was excited, but nervous; he wasn’t quite sure what to do next.
So, he later recalled, he went to the dictionary to learn more about waves; not the kind breaking out on the ocean, but electromagnetic waves that radiate from computers and electronic equipment.
Understanding those waves was the first task in meeting Dow’s new contract with SDC, a Santa Monica-based computer systems development firm that works on classified government projects. SDC wanted Dow Industries to build it a new “leak-proof” computer center, one that would keep electromagnetic waves, and the valuable information they carry, inside the building. The waves pass through ordinary walls and can be intercepted by foreign and industrial spies.
“I had no idea that the building was going to be as complex as it was,” Willich said during a recent interview at Dow’s Laguna Hills headquarters.
The current shape of Willich’s company and its phenomenal growth is the legacy of the SDC project. What Willich wound up with was a hybrid company, combining high-technology engineering with hard-hat construction know-how. The “shielding technology” it developed for the SDC center opened up a whole new field that analysts say will continue to grow.
Dow’s growth already has been remarkable. The company placed 33rd--higher than any other Orange County company--on Inc. magazine’s December, 1984, list of America’s 500 fastest-growing privately held companies. The magazine estimated that Dow’s revenues grew by a compound annual rate of 150% during the five-year period from 1979 to 1983. The company, which employs more than 100 people at offices in Laguna Hills, Culver City, San Diego, Seattle and Philadelphia, expects revenues of $23 million for its fiscal 1984. For 1985, the company estimates it will earn $2.5 million on revenues of $35 million.
If the growth and success continues, Willich might consider taking Dow Industries public, he said.
In the process of pulling together the knowledge, skills and people Dow needed to complete the SDC building, Willich, 42, created a business not easily measured by common construction industry standards. Few other companies, if any, do high-tech engineering designs and construction, too.
“Other companies don’t have the same capabilities in-house,” Willich said of Dow’s two main divisions--engineering and construction management. The divisions interact and “we have a constantly developing and improving product on both sides of the house,” he said.
Although analysts agree that the market for Dow’s services will increase with the continued growth of the high-technology industry, the field is still too young to attach definitive figures to it.
Richard Kateley, senior vice president for Real Estate Research Corp. in Chicago, said “there is not a large demand now” for Dow Industries’ technology, but the tenants of buildings with sophisticated computer and communication equipment will spur demand. “These tenants,” he said, “ask: ‘How secure is my data base? How secure are my telecommunications?’ ”
Won’t Reveal Location
The SDC computer center has answered those questions, said officials of SDC’s parent company, Burroughs Corp. of Detroit. Although the company is still concerned about the center’s security and won’t disclose its exact location in Southern California, a Burroughs spokesman said the building was “one of the finest structures of that nature in the country.”
Dow Industries’ growth during the past five years reflects the rise of high-technology industries and heightened fears of foreign and industrial espionage. During the next 10 years, Willich said, “the amount of information that will be garnered by Eastern Bloc countries and industrial espionage will increase at a quantum rate.” Espionage concerns have helped build Dow’s business; about 80% of its clients are involved in some type of government or defense work.
As use of computerized information processing spreads into more industries, so may Willich’s customer base. He expects more of Dow’s future business to come from health care and non-defense industries, whose computer data bases and sensitive electronic equipment are threatened by increasing traffic in the air waves from satellite and microwave communications.
Dennis Brinton, an electrical engineering consultant, explained that just as electronic interference can open or close an electric garage door unexpectedly, the same interference can upset a computer that monitors and controls the air conditioning, heating and lighting in an office building. Even electrocardiogram machines have been known to malfunction because of electromagnetic and radio waves.
Dow Industries’ shielding technology features a membrane that combines steel plates and non-conductive materials. This membrane is included in the walls, ceiling and floors, making the building “electromagnetically and radio-frequency pure,” Willich said.
In much the same way that homes are grounded to protect them from lightning strikes, Dow Industries can ground a building so that electromagnetic and radio waves are directed into the ground, away from equipment. Even floor drains leading to the outside of buildings are subject to guides that block radio waves before they escape from the building with the information. As an added benefit, the shielding is an effective sound barrier.
One of Dow’s clients said the shield provides the equivalent protection of six feet of concrete but at a much reduced cost. Willich said such shielding adds an extra $10 per square foot to the final cost of the building.
Dow also expects to expand its role as a builder of high-technology office parks. Such parks would feature buildings especially designed to minimize electromagnetic and radio interference.
Although other companies already are building high-technology parks, most do not incorporate the protection that Dow will feature in its parks.
Its first such project is being planned for a 15-acre site in Chula Vista in San Diego County. The park, called Gateway, will offer 250,000 square feet of commercial and industrial buildings, with features ranging in sophistication from electromagnetic shielding to sophisticated grounding. Satellite dishes and built-in telecommunication systems will be included. For Dow, the design and construction of Gateway means a 2 1/2-year, $50-million contract.
The Irvine Co., Orange County’s largest private landowner, is interested in Dow’s technology, said Bob Zibek, who is overseeing the Irvine Co.’s plans for a similar high-technology office and industrial complex. Zibek said that because the new park will be near the El Toro Marine Corps Air Station and its airport, his company is concerned with reducing the effect of jet noise and minimizing interference from airport radar and communications.
Impressed With Plans
Real estate analysts and several of Dow’s clients said they were impressed with the company’s shielding technology and its plans for a high-tech park. “Most developers don’t provide that type of protection in the skin of the building,” said one electrical engineer.
However, Jerry Cole, who specializes in leasing high-technology properties for Coldwell Banker in Newport Beach, said that most of the special security measures and features needed by high-tech tenants “can be added quite easily after the fact.” A satellite dish, for example, can be added later at the expense of a few parking spaces.
Willich admits that “the market for those high-tech campuses has not been tested yet. The investors that will be financing our next stage of growth will be very sophisticated investors, very wealthy people who can afford to lose it (money).”
Dow Industries, like many small companies caught up in whirlwind expansion, is facing some growing pains.
Willich was surprised to hear that Dow had ranked as high as it did on Inc.’s list. “But what does it really mean?” Willich asked. “Growth is one thing, but viability, sustainability,” are his main concerns now.
The growth has altered Willich’s role in the company. When Willich and his wife, Nancy, started the company in 1972 as a construction managing firm, they were the only employees. Now, he said, he finds it difficult to keep ahead of day-to-day matters in order to concentrate on management.
And he still gets the itch to be involved in each job. Willich said he has a hard time delegating responsibility. “I still like to go out to the projects,” he said.
His employees have noticed the changes, too. “We started to hear people say that we don’t have meetings like we used to, that we don’t talk enough to each other. The company is getting too big.”
Willich’s business has grown with the need for industry to control communication. But he’s a believer in the open-door management philosophy and said “there is no reason to have closed doors inside those buildings.” Willich likes to keep the attractive maple doors in the Laguna Hills office open to foster communication between employees. And although his clients prefer to keep low profiles, Willich would prefer a better visibility in the community and industry.
Willich said he has asked himself: “Now that we are the size that we are, what are we going to do about it? What are we doing in the community?”
But he also realizes that his continued success will lure more competitors to the field. When that happens, Willich is counting on his staff and a “hang-in-there” attitude. “As long as the people grow along with the business, then everything is all right,” he said.
