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 51% of the company's total revenues in 2014.
The company provides cleaning and sanitizing programs and products, equipment repair, and pest elimination for markets such as food service, food and beverage processing, chemical processing, oil and gas production,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 (35% of sales in 2014) 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 65% of sales; Global Energy, 30%; and Other, 5%.
Sales and Marketing
The company serves customers in a range of segments including Buildings and Facilities, Chemical Processing, Education, Facility Care, Food and Beverage Processing, Food Retail, Foodservice, Government, Healthcare, Lodging, and Oil and Gas.
Ecolab’s revenues have seen steady growth since 2010. In 2014 the company’s net revenues increased by 8% due to higher sales in the Global Energy and Global Institutional segments. The Global Energy segment increased thanks to the Champion acquisition. The Global Institutional segment increases were driven by volume and pricing gains, led by strong growth in Latin America, and good gains in Asia Pacific and North America, which collectively offset slightly lower sales in EMEA.
In 2014 the company’s net income increased by 24% due to higher net revenues and an increase in interest expense.
Cash inflow decreased by 16% in 2014 due to an increase in net income (due in part to the Venezuela currency devaluation), and changes in working capital as a result of increase in accounts receivable.
The company grows through acquisitions.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 opened a new manufacturing plant on Jurong Island, Singapore. The new 106,000-square-meter site will supply chemistryproducts for oil and gas companies in the Eastern Hemisphere and support continued growth for Nalco Champion.
That year 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).