Ecolab: Helping Others And Adapting To Change

Sept. 28, 2005
The sanitizing products and services company expects to clean up in 2005.

Ecolab Inc., a $4.2 billion manufacturer of cleaning, sanitizing, pest elimination and maintenance and repair products based in St. Paul, Minn., is no stranger to donating its products and services in the wake of hurricanes.

Indeed, nearly a year before Hurricanes Katrina and Rita devastated the Gulf Coast, Ecolab, one of IndustryWeek's IW 50 Best Manufacturing Companies in 2005, sent 1,500 cases of its antimicrobial hand washing products to the American Red Cross for disaster assistance in the aftermath of 2004's Hurricane Charley.

To assist victims of Hurricane Katrina, the company again distributed its waterless antibacterial hand sanitizer, along with surface sanitizers and other cleaning products. Additionally, Ecolab made its 50,000-square-foot distribution center in Garland, Texas, available to the American Red Cross to distribute supplies during the relief effort. It also is offering the services of its experts in disease prevention.

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Ecolab also is no stranger to change. The 82-year-old company was started because Henry Ford drove Ecolab founder (and then auto dealer) Merritt J. Osborn out of business. Not down in the mouth very long, Osborn started a new company and developed a carpet-cleaning product, Absorbit. He called his new company Economics Laboratory, "reflecting its mission to save customers time, labor and money with economic solutions through laboratory research," according to the company's Web site.

Fast forward to present day and the company that started with a single product is expecting sales for both domestic and international operations (the company has operations in nearly 70 countries and reaches customers in more than 100 other countries through distributors, licensees and export operations) to increase in the third quarter 2005 over third quarter 2004. This prediction, noted in a company press release dated July 25, 2005, is based on positive performance in many areas including second quarter sales for Ecolab's United States Cleaning & Sanitizing operations -- which rose 10% over the second quarter 2004 to $497 million -- and sales of Ecolab's international operations, which rose 5% to $560 million in the second quarter 2005.

Ecolab At A Glance

Ecolab Inc.
St. Paul, Minn.
Primary Industry: Chemicals
Number of employees: 21,000

2004 In Review
Revenue: $4.2 billion
Profit Margin: 7.4%
Sales Turnover: 1.1
Inventory Turnover: 6.3
Revenue Growth: 11.2%
Return On Assets: 9.6%
Return On Equity: 24.0%
In the same press release, Douglas M. Baker, president and CEO, said, ". . . [W]e have been successful in our pricing and aggressive cost reduction actions to manage the higher raw material cost environment. . . . Our pricing and cost reduction measures are expected to show further and increasing benefit in our results as the year progresses, and we will continue to take appropriate measures in these areas."

In terms of the company, Ecolab announced Aug. 12, 2005, it replaced a retiring board member with Kasper Rorsted, executive vice president for human resources, IT and logistics and purchasing of Henkel KgaA, Dsseldorf, Germany. According to Ecolab's Form 8-K dated Aug. 16, 2005, during 2004 Ecolab sold products and services in the amount of approximately $3,222,000 to Henkel and its affiliates, and purchased products and services in the amount of approximately $70,946,000 from Henkel and its affiliates.

Traci Purdum, IndustryWeek associate editor, is director of the IW1000, IW U.S. 500 and the IW 50 research programs. She is based in Cleveland.

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