HOH Hoping to Flood the Market With Clean Water
Harry O’Hare knows water. He invented Ty-D-Bol, the toilet bowl cleaner, and helped pioneer the use of chlorinators to clean swimming pools. Even the capital letters in his name read H2O.
Now, at age 67, O’Hare believes he has designed the next innovation in water treatment: an electrochemical process that cleans and softens a household’s water supply far better than other systems on the market. The product, called the Watergizer, is being developed by HOH Water Technology Corp., a Newbury Park firm that was organized by O’Hare in 1979. It raised $4.6 million when it went public in June.
But the Watergizer is not an $18.99 charcoal filter that attaches to the kitchen water tap. The initial model will cost between $3,900 and $4,500, stand 3 1/2 feet high and must compete with other expensive filtration/softening systems made by such established companies as Culligan, Rayne, Ionics and RainSoft.
O’Hare said he has invested “every dime and nickel I made” from his previous ventures--about $1.25 million--in the Watergizer. Overall, HOH has raised $10 million for the project, including, O’Hare said, “everything I could borrow, steal and rob” from his family. That, in itself, is a wide investor base--O’Hare is one of 17 children, and he has 11 of his own.
At last, the Watergizer is to go on sale next month through water treatment dealers. The company also plans to offer a smaller Watergizer, costing $800, that provides clean water for just one tap. HOH President David C. Kravitz is confident of ringing up about $20 million in sales this year by selling the two products through water treatment dealers in California. He also hopes to develop systems for industry.
Pessimism Told
But HOH has its doubters. Fred Kuppers, general manager of Rayne Water Systems in Canoga Park, said, “After 15 years in the business, I’m a little bit pessimistic” about the Watergizer’s outlook. “Claims are one thing,” he said. “Delivering is another.”
The doubt shows in the company’s stock price. HOH went public by selling 900,000 units (composed of three common shares and three warrants) for $6 apiece, but Monday, they closed at a bid price of $3.50 per unit in over-the-counter trading.
Rival companies certainly don’t appear worried about HOH. Larry Holzman, a marketing manager at Culligan’s headquarters in Northbrook, Ill., said his department had never heard of HOH. At RainSoft’s offices in Elk Grove Village, Ill., President John Grayson said he, too, was unaware of the Watergizer, although he had heard of O’Hare.
But O’Hare--who retains 59% voting control of HOH--and Kravitz are confident because water purity is becoming a bigger issue among Americans.
The Water Quality Assn., a national trade group for water treatment manufacturers and dealers, estimated that more than $3 billion is spent annually by U.S. homeowners and industry for water treatment products, including $1 billion for bottled water. About 10% of the roughly 8 million residences in California already have filters, softeners or other equipment aimed at improving water, the Pacific Water Quality Assn., a local trade group, has estimated.
O’Hare also pointed to a report released Jan. 5 by a Ralph Nader-backed group that said at least 18% of U.S. public water systems are polluted by one or more contaminants.
Of course, some would dispute whether water-filtration devices are necessary. Jay Malinowski of the Metropolitan Water District, the agency that supplies about half of Southern California’s water, said the MWD produces “perfectly good water to drink.” Although most of the home filtration water devices “do what they say they do,” the products end up merely “removing 98% of something that’s hardly there to begin with,” he said.
Existing household water systems usually offer a device to soften the water by removing certain minerals or a filtration system that “purifies” the water by removing other contaminants.
The softeners often use a chemical process called ion exchange. Water is pumped through a tank containing resins, and the resins pull calcium and magnesium ions out of the water and replace them with sodium ions. Because the resins eventually become saturated with calcium and magnesium, they must be flushed out by sending brine, or a salt solution, back through the system, which removes the unwanted chemicals.
A typical filtration system, meanwhile, is placed under the kitchen sink and provides pure water for drinking and cooking via the kitchen water tap. That system would employ reverse osmosis, or the forcing of water through a material--such as a charcoal filter--to remove pollutants.
Both Systems Used
Many homeowners buy or lease both systems so that they have soft water throughout the house and one source of purified water for drinking and cooking. Culligan offers such a system, which sells for about $2,440 or rents for $34 a month.
But HOH contends that these systems have several flaws. The charcoal filters used to make pure drinking water don’t remove some dangerous impurities, such as nitrates, Kravitz claimed. And the salt-based softeners have been banned in some Southern California communities because the salt waste they generate into the sewer system makes it hard for utilities to recycle that water.
Enter the Watergizer, which does not use salt. It also has no moving parts and relies mostly on an electrochemical process. Water flows through 2,400 linear feet of tightly wound plastic tubing inside the Watergizer, during which it is exposed to an electrical current and flows through ultra-thin membranes. The electrochemical process filters out most contaminants, such as lead, radon gas, mercury, arsenic and nitrates, softens the water and controls the acidity balance.
General Electric is designing the Watergizer’s thermoplastic interior free, in the hope that “if they do take off, they’ll buy our material,” said Morris Littlefield, a market specialist for GE plastics in Pittsfield, Mass.
The big question is whether consumers will pay $4,000 for HOH’s system. Kravitz said his dealers probably will let customers finance a purchase over five to 10 years, at a cost of $69 to $87 a month, with interest, and make it competitive with the monthly cost of renting some conventional systems. The difference, of course, is that a renter can walk away from the lease on short notice, whereas the Watergizer payments would run for years.
‘Salable Item’
One dealer who hopes to sell the Watergizer is Pamela Caughell, owner of Seymour Water Conditioning in Santa Barbara.
“If it does what they say it does, they won’t be able to make enough of them,” she said. “A lot of homeowners will say $4,000 is a lot of money, but the fact that it will condition their water and give them pure water in their entire home will be a salable item.”
Whether Caughell turns out to be right is no idle question for O’Hare, a blunt, heavy-set native of Waterloo, Iowa, who learned about water chemistry without the help of a college degree. After attending San Jose State, O’Hare joined the Southern Pacific railroad as a yardman in the early 1940s.
“I started to make various cleaning compounds to clean off the crud that was on many of the railroad cars,” he recalled. “I was always tinkering with chemicals.” After nine years with the railroad, he went out on his own and began developing liquid detergents and the early prototypes of home garbage disposals.
It was in 1958 that O’Hare developed Ty-D-Bol, a liquid cleanser/disinfectant for the toilet bowl that still is sold today by Papercraft Corp. Despite Ty-D-Bol’s long success, O’Hare says he made less than $100,000 from the product, most of which he got when he sold Ty-D-Bol Chemical to its other executives in 1960.
Held Ty-D-Bol Patent
He did hold the patent on Ty-D-Bol--which expired after 17 years--but claims he didn’t attempt to get royalties because he feared the product was a loser. “I had an idea, and that’s all. To be brutally frank, I didn’t think it was worth a damn,” he said.
During the 1960s and 1970s, O’Hare developed various chemical chlorinators used to control algae and fungus in pools. His mixtures were the predecessors of some products used today. He also developed early versions of the in-sink garbage disposal, liquid detergents and an aerated shower head.
But as far back as the Ty-D-Bol days, O’Hare said he kept thinking that a complete water purification system for the home was possible, and he decided in 1979 to take up the project full-time.
It’s been a long, tedious and expensive process to design the Watergizer. But O’Hare, in his typically unabashed style, predicts that the product is worth the wait.
“If I wanted to screw the public, I’d have marketed this thing five years ago,” he said. “But this now coming out will be the acme of perfection.”
