BOC Report and accounts 2005 - Alle jaarverslagen
BOC Report and accounts 2005 - Alle jaarverslagen
BOC Report and accounts 2005 - Alle jaarverslagen
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16 The <strong>BOC</strong> Group plc Annual report <strong>and</strong> <strong>accounts</strong> <strong>2005</strong> Group profile<br />
Corporate development<br />
Over the last three years <strong>BOC</strong> has continued to invest in its core businesses at the same time as divesting assets<br />
<strong>and</strong> businesses that were no longer consistent with its strategy.<br />
In October 2002, <strong>BOC</strong> acquired Environmental Management Corporation (EMC), a privately owned water<br />
services company based in St Louis, Missouri. EMC manages water <strong>and</strong> wastewater treatment facilities for both<br />
industrial <strong>and</strong> local municipal customers around the US. EMC forms part of the PGS line of business, which is<br />
exp<strong>and</strong>ing the range of solutions offered to its industrial customer base.<br />
<strong>BOC</strong> <strong>and</strong> Air Liquide merged their industrial <strong>and</strong> medical gases businesses in Japan in January 2003 <strong>and</strong> <strong>BOC</strong>’s<br />
subsidiary in Japan has retained a 45 per cent interest in the combined company called Japan Air Gases Ltd.<br />
At the end of January 2003, <strong>BOC</strong> acquired the partial oxidation syngas plant at Clear Lake,Texas, from<br />
Celanese. Under the agreement <strong>BOC</strong> fulfils a significant proportion of the industrial gas requirements for the<br />
Celanese chemical facility at Clear Lake.<br />
In March 2003 <strong>BOC</strong> announced an agreement to purchase the Canadian packaged gas <strong>and</strong> related welding<br />
equipment business of Air Products.The acquisition was completed in April 2003 following approval from the<br />
Canadian regulatory authority.<br />
In June 2003, <strong>BOC</strong> announced an agreement to obtain half the output of a new helium extraction facility to<br />
be constructed in Qatar. Deliveries from the new source are now scheduled to commence during 2006.<br />
In May 2004 <strong>BOC</strong> agreed to buy Duke Energy’s 30 per cent ownership interest in the Cantarell joint venture<br />
company for US$59.7 million in cash.This increased <strong>BOC</strong>’s overall stake to 65 per cent on completion in<br />
September 2004.This company supplies Pemex with nitrogen for the pressurisation of its oilfields in the Gulf<br />
of Mexico.<br />
<strong>BOC</strong> completed the disposal of the packaged gas part of its US ISP business to Airgas Inc on 30 July 2004.<br />
The initial consideration received was US$175 million in cash <strong>and</strong> a final payment of US$20 million that had<br />
been subject to performance conditions was recognised in <strong>2005</strong>.These funds were received in November <strong>2005</strong>.<br />
All packaged gases <strong>and</strong> associated hardgoods were included in the sale.This comprised compressed industrial,<br />
speciality (excluding electronic) <strong>and</strong> medical gases in the US, sold through <strong>BOC</strong> retail <strong>and</strong> distributor channels.<br />
The sale did not include <strong>BOC</strong>’s bulk liquid helium, bulk medical gases <strong>and</strong> distributor businesses.<br />
In October 2004, <strong>BOC</strong> purchased a 50 per cent holding in Asia Union Electronic Chemical Corporation<br />
(AUECC).This acquisition exp<strong>and</strong>ed <strong>BOC</strong> Edwards’ electronic materials offering to include the purification, blending,<br />
packaging <strong>and</strong> distribution of wet chemicals for flat panel display, semiconductor <strong>and</strong> solar cell manufacturers<br />
throughout Asia.<br />
In December 2004, <strong>BOC</strong> sold its shares in Unique Gas <strong>and</strong> Petrochemicals thereby divesting interests in the<br />
LPG <strong>and</strong> bulk ammonia businesses in Thail<strong>and</strong> but the cylinder <strong>and</strong> aqueous ammonia business was retained.<br />
At the end of January <strong>2005</strong>, <strong>BOC</strong> acquired Calor Gas Limited’s UK aerosol propellants business.This includes<br />
the sales, marketing <strong>and</strong> distribution of bulk <strong>and</strong> packaged propane, isobutene <strong>and</strong> butane blends in the UK.<br />
The acquisition also included Calor’s CARE range of hydrocarbon refrigerants.<br />
The segment reported as Afrox hospitals operated through Afrox Healthcare Limited up to the end of March<br />
<strong>2005</strong>. It owned <strong>and</strong> managed private hospitals <strong>and</strong> clinics in southern Africa. <strong>BOC</strong>’s majority-owned subsidiary,<br />
African Oxygen Limited (Afrox), held 69 per cent of Afrox Healthcare Limited (AHealth) when the company was<br />
sold to a consortium led by two major black economic empowerment investors in March <strong>2005</strong>.Afrox has retained<br />
a significant interest in the hospitals business through a 20 per cent holding in the new company.<br />
In September<strong>2005</strong>, Gist acquired G Van Dongen Holding BV, a European temperature-controlled transport<br />
operator.The business, which had an annual turnover of some 46 million euros, exp<strong>and</strong>s Gist’s existing primary<br />
food business into continental Europe by providing fresh chill <strong>and</strong> ambient transport services to food<br />
manufacturers in the Netherl<strong>and</strong>s, Spain, Germany, Portugal <strong>and</strong> France.<br />
Industrial gases<br />
The <strong>BOC</strong> Group is one of the major producers of industrial gases in the world. Its products include the<br />
atmospheric gases (nitrogen, oxygen <strong>and</strong> argon) produced by air separation plants as well as hydrogen, carbon<br />
monoxide <strong>and</strong> syngas (a mixture of hydrogen <strong>and</strong> carbon monoxide) made by technologies including steamreforming<br />
or partial oxidation of hydrocarbons.The Group also markets carbon dioxide, helium <strong>and</strong> liquefied<br />
petroleum gas.These are generally derived as by-products from chemical processes or from natural sources <strong>and</strong><br />
are also purchased from other producers. In addition, the Group markets dissolved acetylene <strong>and</strong> a wide range of<br />
special gases, medical gases, gas mixtures <strong>and</strong> gaseous chemicals.<br />
Industry structure <strong>and</strong> consolidationThe industrial gases business is capital-intensive, with increasing dem<strong>and</strong>,<br />
together with economies of scale, leading to the need for large production units <strong>and</strong> distribution networks.<br />
The need for fixed asset investments, the trend towards global customers <strong>and</strong> the benefits from the transfer<br />
of applications technology worldwide have resulted in the business being h<strong>and</strong>led by a relatively small number<br />
of companies internationally.<br />
One or more of the other major international producers compete in each of the industrial gases markets<br />
served by the Group, <strong>and</strong> in many of the markets there are smaller local producers as well. International<br />
competitors include Air Liquide, Praxair,Air Products <strong>and</strong> Chemicals, Linde <strong>and</strong> Nippon Sanso.The world market<br />
for gases <strong>and</strong> related products is estimated to be some £25 billion a year.