Trying to Solve Problems of Dangerous Wastes : Seeking Solutions to What to Do With Waste : Firm: O.C.-based hazardous materials hauler Security Environmental Systems is growing fast amid rapid change.

One morning last week, Ellen L. Batzel was poking around a truck yard in the industrial enclave of Vernon in her blue jeans, work shirt and cowboy boots.

A couple of hours later, the corporate lawyer-turned-prospective president of Security Environmental Systems was back in a navy, pin-stripe suit at the headquarters in Huntington Beach.

It’s that kind of company, she explained. Just about every executive of the company has, at one time or another, driven a truck.

But the company may have a hard time staying that way. The family-run business has nationwide ambitions and is growing at a fast clip amid rapid change.

Only last year, Security Environmental still derived almost half its revenue from disposing of medical waste. In a bold move, it sold the medical-waste business to its chief rival in order to concentrate on hauling hazardous waste.

Now the company says it has received several lucrative federal contracts to clean up hazardous waste at 26 military bases around the country, and is doing periodic work for as many as 500 private companies as well.

Batzel, the company’s outside legal counsel until November, is slated to become president in a proposed management shake-up that goes before the board of directors on March 1. That will make her the first person unrelated to founder Alfred Grossman to hold such a key title.

Batzel, 42, plans to use her corporate savvy to impress Wall Street and to engineer the kinds of mergers and acquisitions that the company will need in order to grow. Although traded on Nasdaq, the company is about 40% held by the Grossman family and has not attracted the attention of institutional investors.

It has stayed profitable, however. The company reported last week that it earned profits of $163,895, or 5 cents a share, in the second quarter ended Dec. 31, down from $1.1 million, or 32 cents a share, for the same quarter in the previous year. The decline resulted from completion of a large, onetime job of removing contaminated soil at Camp Pendleton.

The company had $3 million in cash and a measly $57,000 in long-term debt as of January.

It is a remarkably clean balance sheet for a company that has made radical changes in directions to look for opportunity.

Security Environmental was hatched in 1972, when Alfred Grossman bought an incinerator in Garden Grove on the notion that other firms would want to contract for the destruction of sensitive documents.

“There are literally dozens of types of materials that have to be destroyed, but which are too valuable to be entrusted to the trash man,” Grossman said in an interview a year later with The Times.

When the idea failed to catch on, Grossman found a new use for his incinerators: consuming the thousands of pounds of medical waste generated by local hospitals. The business did so well that Grossman planned an expansion to build the state’s first full-scale, commercial incinerator for hazardous waste in Vernon, an industrial town just east of central Los Angeles.

Security Environmental spent $4 million on the venture and won more than 50 permits needed to start construction. But the project became hotly contested by nearby neighborhoods who feared emissions might cause cancer.

In 1991, Security Environmental reluctantly killed the project. In the process, however, it had discovered a whole new business. Gearing up to build its incinerator, the company had gained expertise in hazardous waste trucking and disposal, the vast majority of which involved wastes no more hazardous than car wash cleaner residue and the sludge left over from making ice cream.

And the business generated higher profit margins than medical waste.

To pursue those margins, Security Environmental decided last year to surrender its medical waste business to competitor Browning-Ferris Industries by selling its customer list in return for assumption of $300,000 in outstanding debt.

Free to concentrate on hazardous waste hauling, Security Environmental found a lucrative new customer in the U.S. Defense Department. With base closures, the military is more concerned than ever about cleaning up hazardous wastes on its sites.

The company started with the Camp Pendleton contract and has secured four more since. Batzel said she plans to relocate to Asheville, N.C., so she can direct efforts to service those contracts and reach new customers. Pretty soon, Security Environmental--and its 40 field workers--will have the Southwest and Midwest covered as well.

Security Environmental has also serviced maquiladoras on the Mexican border. The North American Free Trade Agreement, Batzel said, could bring more waste hauling business because of side agreements that require a cleaner environment.

“If we apply our methods of business to more niche markets, we’ll just clean up,” Batzel said.

Grossman couldn’t be more pleased. At 72 and chairman emeritus, he still shows up at the company’s headquarters every workday.

“This is the next step in our growth,” he said. “We must do that or we’ll fade into the sunset.”