Thursday, June 13, 2013

Coming to America

U.K.'s A-Gas Plans Expansion Into North America

A-Gas’s acquisitions in the U.S. will set it up for a significant expansion into North America, including the international rollout of its refrigerant reclamation technology.
This year, A-Gas celebrates its 20th year in business, but no time in those two decades has been quite as busy as last year. The past 12 months have seen intense activity as the Bristol refrigerant distributor and reclaimer bought two U.S. specialists, Coolgas and RemTec, and set up a fully fledged North American division. The firm has transplanted U.K. managing director Ken Logan to oversee the establishment of the U.S. operations for the next two years at least.
The acquisition of the U.S. businesses, plus a further distributor in Australia, Technochem, has seen the A-Gas Intl. group top £100 million turnover for 2012, with a worldwide headcount of 237.

Acquiring Assets

“A-Gas is now the largest independent refrigerant player outside of the U.S.,” said Jon Masters, European managing director. “Our core territories are in the U.K., South Africa, and Australia, in each of which we have a 30-35 percent market share. So we were keen to try and take that offering to the U.S. — it was the right opportunity in terms of the business and the regulatory framework.”
That framework is the U.S. phase out of HCFCs and the probable phase down of HFCs, expected to closely follow the European Commission’s proposed F-Gas model — although progressive states like California are already bringing in more stringent rules.
The particular attraction of RemTec is that its core business is halon reclamation. Although these are largely from fire suppressants, this offers the right range of skills and technology to allow an expansion into refrigerant reclamation. This is where A-Gas brings its own skills to bear, said Masters. “We can bring our reclamation knowhow, and the benefit of the U.K. experience of selling the reclaimed HCFC product. The U.S. market is maybe four or five years behind Europe, but it is rapidly developing, and the EPA [Environmental Protection Agency] has announced more cuts in HCFC volume.”
The plan is for the RemTec operation to be brought up to the same standard for refrigerant reclamation as A-Gas’s Bristol facilities by the end of this year.
The commercial implications of the rapid cuts should not be underestimated; in the U.S. over the past year, virgin R-22 has increased in price from $3 per pound to $15 per pound.
Coolgas, by contrast, is a conventional refrigerant distributor, but again the purchase is strategic, providing a foothold in the Southwest, from which A-Gas can build, with a brand name well known to the American market. It also holds all-important import rights to HCFCs.
A foothold in such a large territory is a big deal in its own right, but the potential is far bigger. “The U.S. business is roughly the same size as the U.K. business, but whereas in the U.K. that brings a 30 percent market share, in the U.S. it is only 2 percent of the market. It should be easier to double from 2-4 percent than from 30-60 percent.”
If the plans for reclamation at RemTec go well, it could be joined by other sites. While the U.K. can function well with a single reclamation site, the scale of the U.S. is likely to require a network of two or three more. With reclaimed HCFC expected to be useable in the U.S. beyond 2020, that is an attractive long-term target.

Reclamation Technology

In a relatively short time, refrigerant recovery and reclamation has become a serious business for A-Gas. Its environmental services operations now account for around 20 percent of turnover (refrigerants is the largest proportion at 60 percent).
U.K. business director John Ormerod said, “What we do falls into two areas: cleaning up dirty gas by removing contaminants and separating out gases from refrigerant mixtures.
“We probably lead the world in refrigerant reclamation. There is only one other company in the U.K. and three in the U.S. who can separate refrigerants like we do,” he said.
The separation facilities at Bristol have come on apace since the pioneering days when its technology could be housed in a corner of the warehouse. The original plant is still in situ, but it has been joined by Separator 3, located outside the warehouse and large enough to be able to accommodate tanker-sized volumes of refrigerant, with a capacity to process around 400 tonnes a year.
Although the precise technology is secret, both plants are designed to reclaim refrigerant to Air-Conditioning, Heating & Refrigeration Institute (AHRI) 700 standards, as well as being able to split mixed refrigerants into usable batches and to reclaim individual gases from cocktails of recovered refrigerant. The latter is where A-Gas claims distinctiveness, as “the only supplier who has both the technology and the capacity to provide this level of service.”
Content for the European Spotlight is provided courtesy of Refrigeration and Air Conditioning Magazine, London. For more information, visit
Publication date: 5/20/2013

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