Windlesham, Surrey GU20 6HJ
Telephone: (0276) 77222
Incorporated: 1886 as Brin's Oxygen Co., Ltd.
Sales: £4.0 billion (1997)
Stock Exchanges: London New York
Ticker Symbol: BOC
SICs: 2813 Industrial Gases; 2834 Pharmaceutical Preparations; 3841 Surgical & Medical Instruments & Apparatus; 8742 Manufacturing Management, Physical Distribution, & Site Location Consulting
The BOC Group is built around its customers. Whatever the industry or interest, our goal is to respond to their needs as quickly and effectively as possible. Their ever-changing requirements are the driving force behind the development of all our products, technologies and support services. We recognize that BOC people are our most important asset, and through them we ensure that we play a full and active role in communities around the world and are committed to the highest standards of safety and environmental practice. At the same time, we believe that the best way we can assist any of the communities in which we operate is to build a successful business. That's why, as the BOC Group continues to expand and develop, one thing will never change. We will always remain built around our customers.
BOC Group plc is one of the world's largest producers of industrial gases essential to almost every manufacturing process. It supplies a variety of gases to the petroleum, electronic, steel manufacturing, metal producing and fabricating, construction, ceramic, and food and beverage industries. Its principal related companies operate in over 60 countries across the globe. The company also owns subsidiaries that provide vacuum technology and distribution services.
Although oxygen had been used in an extremely limited capacity since the late 18th century as a respiratory agent, the development of chemically produced oxygen was hampered by costly methods, yielding only small amounts of relatively impure gases. Commercially produced oxygen was largely confined to "limelight," used to illuminate the stages of theaters and music halls, and that popular means of entertainment and enlightenment, the lantern lecture.
In 1885 two French brothers and chemists, Arthur and Leon Quentin Brin, traveled to the Inventions Exhibition in South Kensington, London, and erected a demonstration of their recently patented method of making oxygen by heating barium oxide, with a view to attracting financial support. They found it in Henry Sharp, an English stoneware manufacturer. In January of 1886 the brothers established Brin's Oxygen Company Limited.
In the spring of 1886 the fledgling company hired its first foreman, a young Scotsman by the name of Kenneth Sutherland Murray. A man of remarkable mechanical ingenuity, Murray redesigned the plant in his first year on the job. In 1888 the new plant went into operation and production increased from nearly 145,000 to 690,000 cubic feet of oxygen. One year later the plant installed an automatic gear, invented by Murray, and improved Brin's production to nearly a million cubic feet of oxygen a year.
From the beginning, however, limelight was a limited market, and so the company board members searched for new ideas to develop oxygen sales. They promoted the use of oxygen in preserving milk, bleaching sugar, manufacturing saccharine, vinegar and linoleum, maturing whisky, and in the production of iron and steel. They hired a horse and carriage for the express purpose of "pushing business."
As a result, sales of oxygenated water in any form, flavored or not, increased dramatically. Moreover, the beverage found favor among temperance groups. The company published signed physicians' testimonials extolling the virtues of this new "health" drink, prescribing it as a sort of universal remedy.
The company then turned its attention to the means of gas containment and distribution. The early method of storing and distributing gas, the gas bag, was an inefficient method which resulted in a significant loss of both gas and profit, and was soon replaced by the sturdier iron cylinder. However, even with this vast improvement over the gas bag, the new method of containment was cumbersome and costly. The cylinder itself weighed and cost more than the gas it held, making the product economically impractical to distribute over a large geographical area.
Consequently, in 1887, under the guiding hand of Henry Sharp, Brin's began granting licenses to a handful of independent companies throughout Great Britain to produce oxygen under the patented Brin process. In 1890 Brin's introduced another improvement in containment, a steel cylinder, which soon became the standard of gas containment worldwide, and expanded its production to related products, such as valves and fittings.
At the same time, in a move that marked the beginning of the company's international growth, Brin's began exporting oxygen in cylinders to Australia for medical use, and developed plants in France, Germany and the United States, granting them sole rights to operate under the Brin process.
In the decade that followed, Brin's did little more than consolidate its operations and improve its market share. The company took over two of the British companies which had been granted licenses earlier to produce its product. The company also elected its second chairman, Edward Badouin Ellice-Clark. After several years into his chairmanship, Ellice-Clark expressed some regret that the industry had produced no advances in the application of industrial oxygen.
By 1900, however, a new method of producing oxygen by converting air to liquid had been devised independently in Britain, the United States and Germany. The German scientist reached a patent office first, and the patent went to Dr. Carl von Linde. Brin's almost immediately negotiated an agreement to use the Linde patents and within several years abandoned both its now dated barium oxide method of oxygen production and the company name. In 1906 Brin's Oxygen Company Limited became the British Oxygen Company Limited, or BOC.
Early Twentieth Century Expansion
There followed steady expansion spurred by development of new technologies using oxygen in metal cutting and welding. In 1914 Britain declared war on Germany, and business increased significantly. No previous war had equaled the output of munitions, and the essential element of oxygen was apparent in almost every aspect of munitions production. Every means of transport, including ships, tanks and trucks, involved either metal cutting or welding, usually both.
BOC continued to grow in the immediate post-World War I years through acquisitions and through development in the commercial use of products such as acetylene and the rare gases. These various gases, with their exotic sounding names of argon, krypton, helium, neon and xenon, were developed and marketed for use in such products as the neon light, fog lamps, miner's lamps, respiratory gas in obstetric analgesia, and as protection for divers against the "bends."
In 1920 BOC acquired a London company called Sparklets Ltd. A major producer of small arms munitions during World War I, Sparklets had originally formed for the purpose of manufacturing small bulbs of carbon dioxide for carbonated drinks. Ten years later, BOC merged with Allen-Liversidge Ltd., a South African company with whom BOC had collaborated throughout the 1920s in further developing the acetylene welding process. In 1925 Kenneth Sutherland Murray, the company's first foreman, was appointed chairman.
Technological Advances in the mid-1900s
As an adjunct to its admittedly limited production of medical oxygen, and in response to a request by the National Birthday Trust Fund, BOC designed a machine for use by midwives in 1935 called the "Queen Charlotte's Gas-Air Analgesia Apparatus." Soon afterwards, BOC introduced an improved anesthetic gas, called "Entonox," used extensively to ease pain in childbirth and which was available in ambulances for use during emergencies.
That same year, in a pioneering accomplishment, the company set up a separate medical division equipped to install oxygen which would be available "on tap" by means of an extensive circuit of copper pipes connecting hospital wards and operating theaters to a battery of cylinders usually located in the basement of a hospital. Four years later, the company developed a machine which was the forerunner of surgical anesthetic equipment in use today. In an effort to further increase its welding interests, during 1936 BOC acquired the Quasi-Arc Company, a British company which had a refined welding electrode instrument that improved the process of arc welding.
With the onset of World War II, BOC produced gases for munitions and for medical needs. The Air Ministry enlisted the assistance of the company to produce oxygen and equipment designed to withstand high pressures for the Royal and allied Air Forces. Sparklets again began producing a variety of its unique bulbs, including bulbs used to inflate lifejackets; bulbs filled with insecticide, used to protect soldiers against malaria; bulbs used to lower landing gear in emergencies; and larger bulbs filled with ether, enabling engines to quick-start in the below-freezing Russian temperatures.
By 1950 BOC had formed subsidiary companies in over 20 countries. It was a decade that brought with it a revolution in the manufacture of steel as an increased demand for automobiles also led to increased productivity in both the steel and the gases industries. The common method of tanking liquid oxygen to various industries to be evaporated, pressurized and then fed to furnaces proved inadequate to the new demands of steel-making. The search for a new method gave rise to the production of "tonnage" oxygen.
A variation of medical oxygen on tap, tonnage oxygen is, as the name suggests, the production of oxygen by the ton. Rather than tank in the oxygen, and then have it converted, tonnage plants were built on or near the customer site to pump in the already converted oxygen by pipeline. Toward the end of the 1950s BOC was supplying tonnage oxygen to Wimpey for use in rocket motor testing and liquid oxygen for the launching sites of the Thor and Blue Streak missiles. For use in manufacturing semiconductor devices, BOC began supplying argon to Texas Instruments.
In 1957 the British Monopolies and Restrictive Practices Commission published a report stating that the company's prices for oxygen and dissolved acetylene were "unjustifiably high" and operated "against the public interest." According to the report, BOC had deliberately set out to build a monopoly. Successfully so, it would seem, as by this time the company had managed to secure 98 percent of the British market. The commission disclosed BOC's practice of providing plant equipment under highly restrictive conditions, and stated that BOC had concealed ownership of several of its subsidiaries while at the same time pretending to be in competition with them in a deliberate effort to drive up prices.
The report was the most scathing ever produced by the commission, according to one reporter. However, at the same time, the commission admitted there was nothing to suggest that BOC was operating under substandard levels of efficiency in any area, as might otherwise be expected in a company of similar standing and resources. The commission also noted that not one of the company's customers had actually complained about the high prices.
BOC drew criticism again in 1962 when the Board of Trade released the company from some of its obligations to the Monopolies and Restrictive Practices Commission. In response to the board's action, and immediately following a recent 6 percent price raise, the British division of Air Products of America noted that BOC still controlled 95 percent of the British market and argued that the action would restore the company to a monopoly.
Diversification in the 1960s and 1970s
New applications for liquid nitrogen prompted the company to develop new markets in refrigeration, food preservation and packaging, preserving medical tissues, and storing and transporting bull semen for artificial insemination. Along these lines, BOC set up BOC-Linde Refrigeration Ltd., with Linde A.G. of Germany in 1968, acquired Ace Refrigeration Ltd., and J. Muirhead Ltd., quick frozen food suppliers, in 1969, and held Batchelors Ltd., Ireland, a food processor, from 1969 to 1973.
The 1960s and 1970s were marked by an accelerated program of diversification at BOC. Under Chairman Leslie Smith, the company began planning for the 1980s, particularly with an eye to expansion in the Far East, by setting up British Oxygen (Far East) Ltd., in Tokyo. Diversification took BOC even farther afield into such areas as fatty acids, resins, and additives produced for paints, inks, and adhesives. In 1970 the company began producing cutting and welding machines which incorporated sophisticated techniques using lasers and electron beams.
The company also began developmental work on underwater welding techniques, producing DriWeld, a system that made structural welds possible at depths of 600 feet. Factories, joint ventures and new holdings were established in Jamaica, Holland, South Africa, Sweden and Spain for a variety of products, including transformers, magnetizing equipment, frozen foods, stable isotopes and radioactively labeled compounds and cryogenic systems. Furthermore, in 1971 the company installed the largest mainframe computer in Britain, linking a network of computers throughout the country. In a move characteristic of BOC, the company sold computer time to outside customers and, as a result, BOC found itself suddenly in the computer business.
In the wake of the 1973-74 oil crisis, BOC reassessed its portfolio and decided to divest itself of its more peripheral interests in order to concentrate on its primary business, especially the gases and health care markets. This was done with the intention of expanding production in these areas, particularly in Europe, the Americas and the Far East.
Perhaps the most important and far-reaching move in the history of BOC involved the acquisition of one of America's major industrial corporations, Airco, a company whose history, in terms of products and growth, nearly mirrored that of BOC. It was an acquisition that came after 11 years of litigation in which the U.S. Federal Trade Commission instigated antitrust proceedings against BOC in order to force the company to divest itself of all Airco stock. The decision was appealed and then delayed, but in 1978 Airco became a wholly owned subsidiary of BOC. This doubled the size of the company, and consequently the British oxygen company changed its name to the BOC Group.
Expansion into Home Health Care
Although secondary to its gas production, BOC's health care division was a world leader in the 1980s in researching and manufacturing completely integrated anesthesia systems, including the Modulus II Anesthesia System, one of the most technologically sophisticated anesthesia devices ever produced. Indeed, the bulk of the group's health care effort was concentrated in its anesthetic pharmaceuticals and equipment and in critical care and patient monitoring. The group's health care market was largely concentrated in the United States. Encouraged by the U.S. government's determination to contain hospital costs, the company was aggressively promoting home health care services.
In 1982 BOC acquired a U.S. company called Glasrock Home Health Care, which provided oxygen therapy and medical equipment to chronically ill and elderly patients at home. In 1986 Glasrock became the exclusive national distributor of the first portable defibrillator designed for home use and of the Alexis computer-controlled, omnidirectional wheelchair. And the company anticipated a growing need for long-range in-home care for AIDS patients, whom hospitals were often not equipped to handle.
BOC's chairman and chief executive officer, Richard Giordano, who came to the Group along with the acquisition of Airco, noted in 1987 that the likely future markets for further development in health care services would be in wealthier countries, such as the United States and Germany, followed by Sweden and Switzerland. In the United Kingdom, he stated, home health care was "in the hands of the politicians," and he complained that "the health service is absolutely Neanderthal." Japan was an additional possibility for the expansion in health care services, according to Giordano, since it was a country burdened with an aging population.
The group's third important area of business in the 1980s, the graphite division, which principally made graphite electrodes for furnaces, was described as a "slow leak in BOC's earnings performance." This was a business that, like Giordano, came to BOC along with the Airco acquisition. During 1980, in an act that was described as a fit of misguided loyalty, Giordano invested in two new U.S. graphite plants; in 1985 the group experienced a loss of six million British pounds.
Under the leadership of Giordano, the BOC Group streamlined its portfolio through divestments and liquidations, concentrating on its two strongest businesses of gases and health care. Thirty of the companies acquired during the 1960s and 1970s diversification program had been sold by the late 1980s, and the work force trimmed by about 20,000.
Expansion in the Early 1990s
Having divested numerous unrelated subsidiaries in the 1980s, BOC resumed its expansion efforts, this time focusing on adding to its principal business units. Although this new direction was initiated under the leadership of Giordano, it was primarily executed by Patrick Rich, who became chief executive officer in 1991 and chairman in 1992.
In particular, the company invested in the first half of the 1990s in numerous gas companies. In 1990 BOC purchased the remaining shares of Commonwealth Industrial Gases in Australia, and the following year doubled its investment in the Nigerian company Industrial Gases Lagos, bringing its stake to 60 percent. In 1992 BOC formed a gases joint venture with Hua Bei Oxygen in northern China and in 1993 purchased Huls A.G., a German hydrogen business, as well as a 70 percent stake in one sector of Poland's state industrial gases business. The company spent $50 million in 1995 to purchase a 41 percent stake in Chile's leading industrial gases company, Indura SA Industria Y Commercio.
BOC made similar investments in its health care unit in the early 1990s. The company initiated a medical equipment joint venture with Japan's NEC San-ei and purchased the home medical businesses of Healthdyne Inc., both in 1990. The following year, BOC purchased Delta Biotechnology Ltd. for $23 million. In 1993 BOC combined its health care businesses, giving them the name Ohmeda. Acquisitions continued in 1994 with the purchase of the Calumatic Group, a Dutch manufacturer of filling, sterilizing, and packaging equipment for injectable pharmaceuticals.
BOC also expanded into the distribution business in the 1990s, becoming one of Britain's largest logistics operations. In 1990 the company purchased the U.K. distribution facilities of SmithKline Beecham consumer brands, and in 1993 acquired the Dutch distribution company Kroeze and the distribution operations of Gaymer Group. The following year BOC purchased the French distribution company TLO and the London Cargo Group, an airside cargo-handling specialist based in Heathrow.
BOC's finances in 1996 seemed strong, despite a slide in the performance of its health care business Ohmeda. Overall, the company reported record profits, up 11 percent from the previous year to $745 million. Sales had also risen, up 7 percent to $2.5 billion. In 1997, Ohmeda revenues were again down, this time by 6 percent. Profits declined even further, to 16 percent below 1996 levels. Overall, BOC revenues increased somewhat, to £4.0 billion from £3.75 billion in 1996. Profits also rose slightly, to £288 million.
In the late 1990s BOC increased its focus on its core gas business, both by expanding investment in that area and divesting other areas of the company. The first business to go was the underperforming health care subsidiary Ohmeda. In January 1998 the company announced it had reached an agreement to sell Ohmeda to a group of companies that comprised the Finnish business Instrumentarium Corporation and the U.S. businesses Becton, Dickinson & Company and Baxter International Inc. The $1050 million cash sale was due to be completed by April 4, 1998. In mid-1998 BOC announced its intention to exit the carbide industry by selling Odda Smelteverk A/S. The company was to be sold to Philipp Brothers Chemicals, Inc., for £11.5 million cash.
BOC's core gas business was performing strongly in the late 1990s, with growth in each major region of the world. The company commissioned ten new plants in the United States in 1997 to meet its long-term contracts and began construction on several large plants in Europe in 1998. In a joint venture with Foster Wheeler, BOC built the largest hydrogen plant in South America, which began operation in late 1997. Several other new plants were either under construction or began operations in the late 1990s in Africa and the Asia-Pacific region; both regions saw double digit rates of growth in their profits in 1997.
Principal Subsidiaries: BOC Gases Australia Ltd.; BOC Cylinder Gas NV (Belgium); BOC Canada Ltd.; BOC Distribution Services Ltd.; BOC Ltd.; BOC Overseas Finance Ltd.; BOC Technologies Ltd.; Edwards High Vacuum International Ltd.; BOC Gaz SA (France); BOC Group Ltd. (Hong Kong); BOC Japan Ltd.; BOC Gases Ireland Ltd.; BOC AG (Switzerland); The BOC Group, Inc.
"BOC's Record Profits Dispel Gloom," Reuter Business Report, November 29, 1996.
"Foster Wheeler/BOC Gases Will Celebrate Start-Up of the Largest Hydrogen Plant in South America," Business Wire, October 6, 1997.
Newman, Judy, "Ohmeda Foresees a Painless Transition," Wisconsin State Journal, February 8, 1998.
Oliver, Judith, "Patrick Rich," Management Today, August 1993, pp. 32-35.
Source: International Directory of Company Histories, Vol. 25. St. James Press, 1999.