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.
By Austen Hufford
Source: Wall Street Journal
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