Hudson Technologies, Inc. , Pearl River, NY, has entered into a joint venture agreement with Europe-based Safety Hi-Tech, and the owners of the Italian engineering firm Banini-Binotti Associates, for the development of reclamation, remediation, and energy optimization services throughout most of Europe, the Middle East and North Africa. The European refrigerant aftermarket alone is estimated at over $700 million or approximately 70% of the U.S. refrigerant aftermarket. Additionally, due to the strict regulatory environment in Europe there is strong demand for the energy optimization and emissions reducing services Hudson provides.
The joint venture will create a new Italy-based company known as Hudson Technologies Europe S.r.l. Hudson and Safety Hi-Tech will each own 40% of the new company and Banini-Binotti will own 20%. Using equipment and technology supplied and licensed by Hudson, the new company will market Hudson's full suite of products and services, with an emphasis on Hudson's energy optimization services.
Hudson Technologies Europe will also provide reclamation support to Safety Hi-Tech for the recycling and resale into the refrigeration market of refrigerants which are not only used in air conditioning systems but also used in most other fire suppression systems, including those made by Safety Hi-Tech. The parties have already made significant progress towards launching this joint venture, including equipment manufacture, facility layout, and sourcing of refrigerants. Hudson Technologies sources say the company’s participation in this joint venture will further Hudson's long term growth strategy by:
- Positioning Hudson to meet increasing European market demand for energy optimization solutions that is being driven by high energy costs and a stringent regulatory environment
- Expanding Hudson's opportunities to grow its reclamation business by taking advantage of Europe's accelerated refrigerant phase out schedule; Virgin production of R-22 is currently 100% phased out in Europe and existing R-22 operating systems can only be serviced with reclaimed or recycled refrigerant that is presently selling at more than 3 times the price of R-22 in the U.S.
- Capitalizing on a very fragmented and under developed EU reclamation market which has few facilities able to meet Hudson's purity and performance standards
- Providing immediate access to an established customer base and a well-developed infrastructure for the marketing of Hudson products and services in Europe, the Middle East and North Africa.
The European Union (EU) is approximately five years ahead of the U.S. in the phaseout of hydrochlorofluorocarbons (HCFCs), including R-22, carbon emission standards for greenhouse gases ("GHGs"), and efforts to increase energy efficiency. In the US, Hudson has been advancing in each of those areas ahead of government regulations and mandates, and in some instances ahead of market acceptance. Europe, however, has already created regulations and market incentives that Hudson believes support the offerings that the Company currently provides in the US. Consequently, Europe represents a promising and significant opportunity for Hudson, through the joint venture, to market and provide its services to industrial and commercial facilities. Sources say Hudson's ability to identify and capture energy efficiencies and savings in steam, air conditioning and refrigeration systems, typically the largest energy users in commercial or industrial facilities, will enable the joint venture's customers to save money, create reliable and verifiable emissions offsets, and better comply with European government initiatives.
The U.S. phase out of chlorofluorocarbons ("CFCs") took place more than 15 years ago, however, many developing countries, which include most nations in the Middle East and North Africa, are only now undertaking the phase out of CFC-based refrigerants. Hudson believes that these developing nations can benefit from Hudson's phase out experience, providing long term opportunities for Hudson Technologies Europe to grow market share.
"This partnership advances our desire to identify markets for our services outside of the U.S. that will enable us to grow our market share,” says Kevin J. Zugibe, Chairman and chief executive officer of Hudson Technologies.
"Safety Hi-Tech''s existing fire suppression customers in Europe, the Middle East and Asia are primarily industrial customers, and prime candidates for the services that Hudson Technologies Europe will provide. As government mandated phase outs and/or use restrictions of all refrigerants, including hydrofluorocarbon (HFC), HCFC, and CFC-based substances create shortages and/or use restrictions of these gases, and as mandatory GHG reductions require the industry to reduce GHG emission, Hudson Technologies Europe will be in a position to provide reclamation and energy optimization services to the needs of SHT's existing industrial customers," Zugibe says. "Additionally, our reclamation efforts give us access to the ozone depleting gases that have high value in the carbon credit market, a market that is currently significantly more active in Europe than in the U.S. We are excited by this opportunity and look forward to working with SHT and BB toward the success of this combined venture."
Aldo Indovino, Safety Hi-Tech's President, says Hudson's proven ability to provide proprietary on-site decontamination and energy optimization services makes this joint venture the perfect solution for the European market for many reasons.
"The opportunity to provide cost-effective energy optimization services, and the ability to access government incentive programs, will set this joint venture apart from others. We are also pleased to have Mr. Banini and Mr. Binotti as part of this joint venture. They specialize in energy and environmental issues and will provide Hudson Technologies Europe with dedicated human resources to promote public awareness of the significant role of energy optimization for large comfort and process cooling systems as a part of the overall strategies to combat Global Warming," Indovino says.
Stefano Binotti, one of the BB partners, says, "Our participation in the Joint Venture represents a very significant moment for us. Both our American and Italian partners are companies with extensive knowledge and experience in their respective fields. We believe their combined technical and commercial expertise, synergistically integrated with our professional experience, will lead Hudson Technologies Europe to successfully develop its business in the European, North African and Middle Eastern markets."
About Hudson Technologies
Hudson Technologies, Inc. is a leading provider of innovative solutions to recurring problems within the refrigeration industry. Hudson's proprietary RefrigerantSide® Services increase operating efficiency and energy savings, and remove moisture, oils and other contaminants frequently found in the refrigeration circuits of large comfort cooling and process refrigeration systems. For additional information on Hudson, visit www.hudsontech.com
Safety Hi-Tech Safety Hi-Tech is a customer-focused supplier of advanced solutions for the Fire-Fighting sector which serves customers and markets through a network of integrated sales, production, research and technical services. SHT is a pioneer in clean agent fire suppression technologies, providing a proprietary, patented alternative to Halon, a chemical compound derived from hydrocarbons which has been identified as a significant contributor to the destruction of the ozone layer.