Just over a year since we were taken aback by the coming together of Pentair and Union Engineering in the global carbon dioxide (CO2) business, and we are again reflecting on another significant acquisition in this business.
Air Products has today revealed its definitive agreement to acquire ACP Europe SA.
The CO2 business is arguably more consolidated than ever before, demonstrating the demand (and future opportunities) for a gas that has become something of a cover star.
CO2 is a product – a by-product – in demand. From applications in drinks carbonation and food chilling and freezing, to water treatment, dry ice blasting, and manufacturing, CO2 is a hot topic right now.
And that makes it an attractive market for M&A too. The CO2 business has been the subject of considerable consolidation in the last half-decade. April 2013 saw Union Engineering acquire The Wittemann Company LLC, a US-based international supplier of CO2 production and recovery systems; Union would itself be the subject of that acquisition by Pentair last year (2017).
Air Products was among those at the start of this wave of acquisitions with its takeover of EPCO Carbon Dioxide Products in June 2013. This was followed up by another major piece of business in the US merchant CO2 business as Matheson completed the acquisition of Illinois-based dry ice and liquid CO2 manufacturer Continental Carbonic Product’s Inc. (CCPI) in February 2014.
In recent years we have seen dry ice innovator Cold Jet acquire fellow dry ice company IceTech (January 2016), bringing together two leading, international corporations in dry ice technology, and international chemicals distribution company 2M Holdings Ltd expand its presence in Germany with the purchase of domestic dry ice producer CE-02 Trockenesis GmbH (2017).
What does ACP bring?
Air Products has been very active in strengthening its CO2 portfolio in the last five years, with the aforementioned of EPCO pushing the company into a leadership position in the US liquid CO2 market – adding EPCO’s 12 CO2 purification and liquefaction plants located predominantly in the central US.
As well as giving Air Products immediate scale in the CO2 market, it strengthened the company’s product offering in the region. Air Products followed this up with the announced operation of a relocated liquid CO2 plant at Big River Resources’ ethanol facility in Wisconsin and construction of a unit to produce liquid CO2 at an ethanol plant operated by Southwest Iowa Renewable Energy (SIRE).
So what does its latest acquisition bring to the table?
Well, Air Products says the rationale behind the deal is to expand its European CO2 position and strengthen its Continental European industrial gas business. ACP would certainly seem like a perfect fit for this aim. The company is a leading supplier in Europe and boasts an extensive know-how of expertise in the field.
ACP is headquartered in Belgium but has significantly grown over the years and now has facilities covering the bulk of Northern Europe, with four liquid CO2 production plants in operation throughout Belgium, France, the Netherlands and Poland. These facilities produce a total of 69 tonnes of CO2 per hour, gasworld understands, combining to create an annual production of around 500,000 tonnes. With six independent sources of CO2, ACP allocates around 80% of its volume for direct customers, with the excess then sold onto the general market.
“We try and be innovative as a core business element and try to be ahead of our competitors by using the latest technologies. It’s a big challenge, but we are succeeding so far”
The company also has two dry ice production sites in both Belgium and Poland, that produce a combined total of around 15,000 tonnes of dry ice each year. The Group commenced construction on a new multi-million-euro CO2 purification line in Włocławek, Poland in May 2017, a food-grade recovery and purification line.
Further assets include a transport fleet of 60 trailers, and 20 rail wagons on standby that are poised to deliver between Belgium and Poland in case of shortage emergencies.
Director Rik Timmermans told gasworld in 2016, “We try and be innovative as a core business element and try to be ahead of our competitors by using the latest technologies. It’s a big challenge, but we are succeeding so far.”
It certainly is, and it is this success – as well as a strong footprint – that ACP will bring to Air Products in Europe going forward. With a name (Acide Carbonique Pur) that literally translates into ‘CO2’ and a proud declaration that it has never failed to deliver a CO2 order to direct customers since its inception in 1897, ACP looks to be a significant piece in Air Products’ CO2 jigsaw in the future.