Firm Hopes Clean-Air Laws Will Boost Sales : Glendale: Struggling Pollution Research and Control Corp. expects legislation to increase demand for its emissions monitoring devices.

Pollution Research and Control Corp. is a tiny Glendale company that makes devices for monitoring air pollution. Since it was founded in 1971, its success in the U.S. market had been limited, so in 1988 Pollution Research turned to overseas markets--particularly South Korea--which recently have accounted for more than half of its sales.

Unfortunately, the Korean market has proved an unsteady one for Pollution Research, and in the year that ended June 30, the company lost $1.45 million on $5.4 million in revenues. Not only were South Korean sales slipping, the same was true for domestic sales.

But with President Bush expected to sign the new federal clean-air legislation, which aims to free the nation’s skies of smog and other harmful forms of pollution by early in the next century, Pollution Research stands to participate in what could be a bonanza for companies that make pollution control and measurement products. These products will be needed by government agencies and factories to measure emissions of sulfur dioxide and other pollutants from smokestacks and in the surrounding air.

“We see a very positive impact,” said Albert E. Gosselin Jr., Pollution Research’s president and chief executive. Gosselin estimated that the legislation could result over the next year in a more than $2-million jump in the company’s sales.

Gosselin said specific provisions in the legislation that will most directly help his company are those concerning acid rain. Pollution Research’s monitors measure sulfur dioxide and oxides of nitrogen--two of the key components of acid rain. Most of the electronic devices are about the size and shape of stereo receivers, cost $4,000 to $18,000, and analyze gases using ultraviolet light.

Pollution Research hopes to sell more products to its traditional customers--mostly utilities and government agencies such as the California Air Resources Board--which will need the devices to monitor compliance with the new emissions standards. Orders may also come from consulting companies that buy the equipment on behalf of manufacturers, Gosselin said.

Industry analysts agree that the clean-air legislation could be a boon for companies in the $50 million-a-year domestic air pollution monitoring business. “We’re not just talking 20% or 30% growth here,” said Stephen Schweich of Alex Brown & Sons in Baltimore. “The market for emissions monitoring systems is going to expand geometrically,” Schweich said.

Analysts say Pollution Research also stands to benefit if Proposition 128--the “Big Green” initiative--is passed by California voters next month. Big Green’s clean-air provisions are even more stringent than those contained in the federal legislation.

But John G. Taylor, an analyst at L.H. Alton & Co. in San Francisco, cautioned that the clean-air legislation is still no guarantee that Pollution Research will manage a turnaround.

“Just because the stage is set doesn’t mean business is going to start walking in the door,” Taylor said. “It’s a question of executing a marketing plan and getting in front of enough people. I think the jury is still out as to whether they can do that.”

Pollution Research’s track record has been spotty. Founded in 1971 by Gosselin, a mechanical engineer, Pollution Research (formerly named Dasibi Environmental Corp.) made a disastrous 1973 investment in a Colorado cattle ranch, from which it took the company several years to recover. The company has also fought an uphill, mostly losing, battle against its two biggest competitors.

That’s partly because the two competitors have the resources of large corporations to draw from. Massachusetts-based Thermo Instrument Systems is a division of Thermo Electron, which has annual sales of $400 million. Lear Siegler, a $2.5-billion concern, has a Colorado division that makes pollution monitoring equipment.

To compete for contracts against its big rivals, Pollution Research more than doubled its staff to 86 workers from June to December of last year. But Gosselin said the increased overhead came at a time when domestic orders for pollution monitoring equipment started to slow as companies waited to see what the final clean-air legislation would contain.

Meanwhile, orders from South Korea’s equivalent of the Environmental Protection Agency, a big Pollution Research customer, also started to dry up.

Pollution Research entered the Korean market when it won a contract to monitor pollution at the 1988 Olympic Games in Seoul. Several orders worth about $400,000 apiece followed.

But during the past year, Gosselin said, Korea stopped ordering pollution monitoring equipment, a result of various political changes. Gosselin said the Korean market is now opening up again, and he expects to land a contract soon that’s worth more than $500,000.

Gosselin also blamed Pollution Research’s losses on “unethical” practices by Thermo Electron and Lear Siegler, including predatory pricing tactics.

Arvin Smith, president of Thermo Instrument Systems, denied that his company had undercut Pollution Research’s prices in hopes of driving it out of business. “We have the highest prices in the business,” Smith said.

Meanwhile, Pollution Research’s troubles have been reflected in its stock, which traded as high as $2.375 a share in June, 1989, but closed Monday at 18.75 cents a share. Gosselin said he has considered buyout offers from parties he declined to identify. But those talks have since broken off, and Gosselin said no other discussions are under way to sell the company.

Gosselin said he has taken steps to try to turn the company around, including cutting the staff by more than half to 33 workers. He is also hoping to team up with larger partners, such as Brown Boveri, a big Swiss-Swedish concern with whom Pollution Research recently bid for a contract in Taiwan. Gosselin said he is also increasing marketing efforts in Europe, where he believes demand for pollution control products will soon take off.

But Pollution Research’s biggest hope is for the domestic market. By early next year, Gosselin said, government agencies and companies will start having plans and funding in place to comply with the new law, and “they’re going to need our instruments.”

Pollution Research and Control At A Glance Pollution Research and Control is a Glendale company that makes equipment for monitoring air pollution from smokestacks and in the surrounding air. Founded in 1971 by Albert E. Gosselin Jr., a mechanical engineer, the company has 33 employees. For Fiscal years ended June 30; in millions