GE Betz

Betz, now part of GE Power & Water ( GE Water & Process Technologies ) is a water treatment company based in Trevose, Pennsylvania, United States, in Bensalem Township. Betz's core business involves the sale of water treatment chemicals designed to lengthen the lifespan of cooling towers, chillers, boilers, and other water dependent machines.

Description

Betz Laboratories, Inc. is a specialty chemical products manufacturer with emphasis on the engineered chemical treatment of water and wastewater in industrial and commercial applications. In the early 1990s, the company had 13 U.S. plants and eight overseas locations.

Founding

William H. Betz and L. Drew Betz founded their water purification business in Philadelphia, Pennsylvania in 1925. Betz's first product was K-Gel, a colloidal substance used to purify boiler water. An initial year of sales netted the company $30,000. Betz continue to sell K-Gel for 50 years. In the 1930s, sales surpassed $100,000 per year, and the company announced the addition of Collogel to its product line. Collogel dispersed sodium alginate in domestic water systems. Two years later the company introduced Adjunct for use in combination with K-Gel. In 1936, the company started a consulting service that would later become a separate division.

The company opened a processing plant on the coast of Maine to extract algin and alginic acid from ocean kelp and process ingredients for use in the production of K-Gel. Although initially successful, the plant was sold when a 1945 hurricane destroyed the kelp beds. In 1939, Betz was asked to formulate synthetic London water for use by George VI and his consort, Queen Elizabeth during their visit it the United States.

In 1932, John Drew Betz, the son and grandson of the company founders joined the company while still in high school, working a sample bottle washer, and in 1940, he joined the family partnership. In 1943, the Betz company was awarded its first US Patent for Remosil, a chemical compound of magnesium oxide used in the treatment of water containing silica.

By 1950, the company entered the Canadian market. The company also researched and patented Dianodic, including a zinc-Dianodic, to combat pitting and tuberculation in industrial cooling water systems. Also in the 1950s, sales passed the $2 million-per-year mark.

Beyond water treatment chemicals, Betz offered biocides and other products useful to the manufacture of paper.

Betz Laboratories, Inc.

In 1957, the company changed from a partnership to reorganize as Betz Laboratories, Inc. Two years later, while serving as chairman of the board, William H. Betz died; L. Drew Betz became chairman, and John Drew became president. The company issued its first common stock in 1965 and became a public company.

In the 1960s, Betz de Mexico was inaugurated and John J. Maguire became company the first non-family member to serve as company president, with L. Paul Heim serving as president and chairman of all European (international) operations. European operations (including a joint venture with the British B.T.I. Chemicals Limited) were reorganized into Betz International, Inc.. By 1972, Betz International established operations in Central and South America, the Caribbean, Africa, the Middle East, and parts of Asia, including Taiwan. An Austrian office was established for serving Eastern Europe. During this time, L. Paul Heim declined an offer from the Board to serve as International President and Chairman. Mr. Heim sold his holdings in Betz International and retired to Southern California to head a private equity firm.

The company's consulting division expanded during the later 1960s and early 1970s by acquiring Albright & Friel, a consulting firm, and Fridy-Gauker & Fridy, a planning and architectural company. In 1971 the consulting division became Betz Environmental Engineers. Consulting promoted the uses and benefits of Betz's product line of bulk chemicals.

By 1975 consolidated sales surpassed $100 million as compounded annual earnings growth reached 20 percent. The Clean Air Act of 1970, as well as the Agreement on Cooperation in the Field of Environmental Protection[1] of the Moscow Summit (1972), created a constructive environment for the pollution control industry. The 1970s energy crisis and the rise in fuel costs served to promote Betz's products: Scale deposits on boilers increased fuel bills; Betz's products removed scale deposits and lowered maintenance and operating costs.

Betz continued to control 18 percent market share during 1984, and sustained sales serving basic plant maintenance functions. At the time, 75 percent of the U.S. market for water treatment chemicals was used by fewer than 12 companies. These customers represented four heavy industries, including oil refineries, petrochemical plants, and steel and paper mills, at a time when overproduction affected the petrochemical and paper industries and domestic steel companies and oil refineries were in decline.

CEO John F. McCaughan focused on securing new markets and consolidating business in the 'middle' market, such as the auto and textile industries. Betz executives also believed the depletion of ground water would promote future growth. Some industries, searching for alternative coolants, considered the use of treated sewage water. Furthermore, a new product called Dianodic II, an organic water treatment compound, entered the marketplace in a company effort to conform with the Environmental Protection Agency's policy on discontinuing the use of allegedly toxic chemicals contained in some water treatment compounds.

In 1992, at a cost of $750,000, all 12 of its U.S. plants earned the International Organization for Standardization's (ISO) 9002, joining Betz's overseas operations which had previously been certified. Originally a standard important to European and international customers, ISO certification had become globally important. Senior Vice-President B. C. Moore told Business Week in 1993 that two U.S. companies had placed sizable orders specifying ISO-9000 certified manufacturing. Revised quality control operations also produced an annual savings of $100,000 in manufacturing costs.

In 1993, Betz sales and pretax earnings decreased, from $706.97 million to $684.87 million and $82.05 million to $65.52 million, respectively. Company executives blamed a $16.2 million pretax restructuring charge for the decrease. The charge reflected personnel reductions, facilities consolidation, divestment of unproductive assets, and the cost of reorganizing global marketing efforts. Under the restructuring, the company's largest operating segment, Betz Industrial, was split into four separate divisions: refining and chemicals; pulp and paper; power industry; and manufacturing industries.[2] At the end of 1993, John F. McCaughan resigned as CEO and became Chairman of the Board, and company president William R. Cook, who had joined Betz in 1972, added CEO to his role.

Outlook for the water-treatment industry remained positive for the 1990s. According to Rick Mullin, writing for Chemical Week magazine, the proliferation of water treatment regulations, combined with the sheer volume of water used in the United States, would expand the $3 billion domestic market by six to eight percent during the mid-1990s. As the second largest player in its industry, Betz Laboratories' positioning as an environmental 'guidance counselor' to industry promised to help it recover from its sales and earnings lapse.[3]

BetzDearborn & Hercules, Inc.

In 1996, Betz acquired the Grace Dearborn water-treatment and process chemicals business from W. R. Grace and Company At that time Dearborn had 2,500 employees and sales of $400 million per year, while Betz claimed 4,100 employees and $800 million in revenue.[4] In 1998, the combined BetzDearborn Inc. was acquired by Hercules Inc. for $2.4 billion in cash and $700 million in assumed debt.[5]

GE Betz

In 2002, General Electric acquired BetzDearborn from Hercules Inc. and became known as GE Betz and was part of GE Infrastructure. At that time, the company had approximately $1 billion in revenue and a sales force of 2,000.[6] In the years that followed its purchase of BetzDearborn, GE also acquired Osmonics, Inc., Ionics, and membrane producer Zenon Environmental Systems, and by 2006 had combined them into GE Water & Process Technologies[7] In 2008, GE restructured its subsidiaries and GE Water & Process Technologies became part of GE Energy Infrastructure. In 2012, GE Energy was reorganized and the original Betz operations and the rest of GE Water & Process Technologies are now part of GE Power & Water[8]

Notes

  1. ↑ "Agreement on Cooperation in the Field of Environmental Protection between the United States of America and the Union of Soviet Socialist Republics". EPA.gov. United States Environmental Protection Agency. Retrieved 7 October 2015.
  2. ↑ Kiesche, Elizabeth S., 'Water Treatment: Measuring Up to the Challenges,' Chemical Week, May 15, 1991, pp. 24-32.
  3. ↑ Mullin, Rick, 'Above the Fray in Environmental Management,' Chemical Week, May 12, 1993, pp. 37-40.
  4. ↑ Chicago Tribune. 12 March 1996 http://articles.chicagotribune.com/1996-03-12/business/9603120069_1_grace-unit-grace-dearborn-grace-spokesman. Retrieved 17 September 2015. Missing or empty |title= (help)
  5. ↑ "Hercules to Buy BetzDearborn In $2.4 Billion Chemical Deal". New York Times. New York Time Co. 31 July 1998. Retrieved 17 September 2015.
  6. ↑ Ambrosini, Dana (13 February 2002). Water Industry news http://www.waterindustry.org/New%20Projects/GE-1.htm. Retrieved 17 September 2015. Missing or empty |title= (help)
  7. ↑ Deutsch, Claudia (9 August 2006). "As water grows scarce, corporations see profit". International Herald Tribune. New York Times Co. Retrieved 7 October 2015.
  8. ↑ "GE Energy - About Our Business". GE.
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