Ecolab cleans up by cleaning up. The company offers cleaning, sanitation, pest-elimination, and maintenance products and services to energy, healthcare, hospitality, industrial, and other customers. Its cleaning and sanitizing operations serve hotels, schools, commercial and institutional laundries and quick-service restaurants. Other units focus on products for textile care, water care, health care, food and beverage processing, and pest control. It also makes chemicals used in water treatment for industrial processes, including in the paper and energy industries. The company is expanding its services to the offshore and international energy market.
Ecolab operates in more than 170 countries. Its largest international operations are in Europe, Asia/Pacific, Latin America, and Canada. Smaller operations are in Africa and the Middle East.
The US accounted for 50% of the company's total revenues in 2013.
The company provides cleaning and sanitizing programs and products, equipment repair, and pest elimination for markets such as food service, food and beverage processing, healthcare, government and education, and textile care. Ecolab's chemicals and services are used in water treatment, pollution control, oil and gas, steelmaking, papermaking, mining, and other industrial processes. It is also one of the top suppliers of chemical dishwashing products to institutions in the US.
Ecolab has four operating segments: Global Industrial (Global Water, Global Food & Beverage, Global Paper, and Global Textile Care operating units); Global Institutional (Global Institutional, Global Specialty, and Global Healthcare operating units); Global Energy (operating under the Nalco Champion name); and Other (Global Pest Elimination and Equipment Care operating units).
The Global Industrial segment (40% of sales) provides water treatment and cleaning and sanitizing services to large industrial clients in the chemical, commercial laundry, food, manufacturing, and paper industries. Global Industrial and Global Institutional together account for about 70% of sales; Global Energy, 25%; and Other, 5%.
Sales and Marketing
The company serves customers in a range of segments including Education, Facility Care, Food and Beverage Processing, Food Retail, Foodservice, Government, Healthcare, Lodging, and Oil and Gas.
Ecolab's revenues grew by 12% in 2013 powered primarily by the acquisition of energy specialty products and services firm Champion Technologies in 2013 which also lifted Global Energy segment sales by 55%. By contrast, Global Industrial and Global Institutional revenues rose by only 3%.
The company reported $968 million in net income in 2013 (38% up on 2012) thanks to higher revenues and operating income growth outpacing the growth in expenses.
Powered by acquisitions, Ecolabs’s revenues have risen 95% in since 2011; net income, by about 110%.
To keep costs in line with its continued investments, Ecolab has deployed a comprehensive plan to improve efficiencies. Part of the effort includes more shared and outsourced services, a centralization of business functions, and a realignment of the company's supply chain. Ecolab continued to trim its global workforce and office facilities following the acquisition and assimilation of Champion Technologies and Nalco.
The company grows through acquisitions. Following its purchase of Nalco, Ecolab continued restructuring and cutting costs in 2012, including cutting back on its global workforce and streamlining its supply chain. With the merging of both companies' operations, Ecolab emerged as a global leader in water, hygiene, and energy technologies and services. The company's global reach and expanded line of products and services will enable it to provide total water processing management to food and beverage, hospitality, and laundry customers worldwide. It continues to target key acquisitions to complement its businesses and to focus on key growth areas.
Ecolab's strategy for growth also includes investing organically in its businesses, including equipment used by customers to dispense its cleaning and sanitizing products, as well as in process control and monitoring equipment. In 2014 the company introduced a new hand sanitizer dispenser (Nexa) and launched the 3D TRASAR Solid Cooling Water Program, which monitors building cooling water systems.
The company also invests in innovation. In 2013 Ecolab opened an R&D facility in Russia and a training center in Eagan, Minnesota.
Mergers and Acquisitions
In 2013 Ecolab bought Houston-based Champion Technologies for $2.3 billion. The acquisition of Champion Technologies and its related company Corsicana Technologies (collectively referred to as Champion Technologies) helps Ecolab to boost its technology and product strengths in North America and is very complementary to its innovative technology and services in the offshore and international energy markets. The deal is expected to yield $150 million in cost synergies by the end of 2015.
Other 2013 acquisitions included Quimiproductos (Mexico; cleaning, sanitizing, and water treatment products and services); Master Chemicals (Russia; oil field chemicals); and AkzoNobel’s Purate business (Netherlands; water treatment services).
In 2011 Ecolab acquired Nalco in a $5.4 billion cash and stock deal.