Air Products to Exit Energy-From-Waste Business
April 04 2016 - 10:27AM
Dow Jones News
By Austen Hufford
Air Products & Chemicals Inc. said it would be shutting down
its troubled energy-from-waste business after it couldn't
efficiently resolve operational and design challenges.
Despite promises of powering more than 100,000 homes in England
while reducing landfill waste and generating high-tech green jobs,
Air Products couldn't figure out how to efficiently solve problems
with the technologically advanced project. The final straw came in
the second quarter when a review determined that "significant" time
and costs would be required to resolve design and operational
problems.
Air Products expects to take a pretax write-down in the range of
$900 million to $1 billion. Earnings per share from continued
operations will be recorded as 3 cents to 4 cents higher over the
past two years, as the unit was unprofitable, Air Products
said.
Exiting the business will allow the Air Products to direct its
resources to its core industrial gases business.
Chief Executive Seifi Ghasemi said in a news release that the
company "pushed hard" to figure the technology out and was
disappointed with the outcome.
"How much money do you have to pour into this thing to actually
make it work?" Mr. Ghasemi said on a February call with analysts,
according to a FactSet transcript. "There is going to come a time
when we will stop pouring money into it if it doesn't meet our
requirements."
The project's technology, called advanced plasma gasification,
aimed to use very high temperatures to convert waste into a fuel
gas called syngas.
Shares fell 1.7% to $142.90 in morning trading.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
April 04, 2016 10:12 ET (14:12 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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