BOC Report and accounts 2005 - Alle jaarverslagen

14 The BOC Group plc Annual report and accounts 2005
Group profile
Introduction
The BOC Group began its business life over 100 years ago as the Brin’s Oxygen Company.The company was
incorporated in England in 1886 and adopted its present name on 1 March 1982.
A technology to extract oxygen from the air in commercial quantities had just been developed and in 1886
the Brin brothers started production at a factory in Westminster, London.Two uses had already been found for
oxygen. One was to intensify limelight, which was then used in theatres.The other was to assist patients’ breathing
during and after surgery. New technology was soon developed that allowed air to be separated into all its major
components - nitrogen, oxygen and argon. By 1960, industrial gases were in widespread use and BOC’s business
was firmly established.Tonnage plants were supplying steelworks with oxygen and the customer base had been
broadened to extend from metal cutting and welding to food and medicine.The business had also spread
overseas with subsidiaries or associated companies as far away as Australia and South Africa. During the 1980s,
BOC’s South African subsidiary began to invest in private hospitals.This diversification was the basis of the Afrox
hospitals segment.
BOC acquired the vacuum equipment company Edwards High Vacuum International Limited in 1968 and this
formed the basis of what was to become the BOC Edwards line of business today.
The BOC Distribution Services business (now called Gist) was first established in 1970, initially providing a
chilled food distribution service for Marks & Spencer and relying upon distribution skills and liquid nitrogen chilling
technology, acquired as a result of BOC’s involvement in gases.
In 1978, BOC completed the acquisition of Airco Inc in America, a predominantly gases business that doubled
the Group’s size and brought BOC for the first time into the US gases market. In the period from 1970 to 1990
The BOC Group significantly increased its presence in the Asia/Pacific region through participation in several joint
ventures or associated companies. BOC established strong market positions in Thailand, Indonesia,Taiwan, the
Philippines, China and Korea.
An investment in 1982 gave BOC effective management control of the Japanese gases company Osaka
Sanso Kogyo KK (OSK). BOC’s holding in OSK was raised to 97 per cent before BOC and Air Liquide merged
their industrial and medical gases businesses in Japan in January 2003. BOC’s subsidiary in Japan has retained a
45 per cent interest in the joint venture company, which is called Japan Air Gases Ltd.
In the period from 1998 to 2001, BOC increased investments in its gases companies in Thailand, Indonesia
and the Philippines by acquiring the interests of joint venture partners or minority shareholders.
The BOC Group has an international portfolio of companies operating and reporting as three lines of
business.These are Process Gas Solutions (PGS), Industrial and Special Products (ISP) and BOC Edwards.
In addition two separately managed specialist businesses,Afrox hospitals and Gist, are reported as business
segments. Until a disposal in March 2005, results for Afrox hospitals were fully consolidated. Since then BOC
has reported its 20 per cent share of this business.
BOC Process Plants was combined with Linde Engineering in the US with effect from September 2002.
BOC retains an interest in the manufacture of industrial gas equipment through its Cryostar business based in
France. Cryostar makes specialist cryogenic pumps and expansion turbines that are used by most manufacturers
of industrial gas plant. In recent years Cryostar has also developed a strong position in the market for shipboard
compressors and heat exchangers used aboard liquefied natural gas (LNG) tankers. Management believes that
Cryostar is the leading manufacturer of its product range worldwide.
The main exports of the Group in 2005 were special products from the UK, helium from the US and vacuum
equipment and semiconductor manufacturing equipment from the UK, the US and Japan.Trade between Group
undertakings is conducted at fair market prices.
Analysis of results by business
(including share of joint ventures and associates)
Turnover Operating profit Adjusted operating profit
£ million % £ million % £ million %
Process Gas Solutions 1,466.3 32 207.2 38 207.2 37
Industrial and Special Products 1,721.7 37 289.4 53 289.4 51
BOC Edwards 826.0 18 17.4 3 38.1 7
Afrox hospitals 275.1 6 37.2 7 37.2 7
Gist 315.9 7 24.5 5 24.5 4
Corporate – – (32.2) (6) (32.2) (6)
4,605.0 100 543.5 100 564.2 100
Adjusted operating profit excludes exceptional items. See also pages 40 and 41 of the operating review.
The BOC Group contributes to the economies of some 50 countries throughout the world.The UK is the largest
single source of sales revenue for the Group’s products and services, followed by the US. Other major geographic
areas for the Group are Australia, South Africa, Japan and other markets in the Asia/Pacific region.The business
therefore operates from a broad geographical base with local manufacturing in most of the key overseas markets.