Ecolab Inc. (ECL) - washing dishes in river in restaurant kitchen

US Securities and Exchange Commission Washington, D. C. C. 20549 FORM10-
K☒Annual reports submitted under sections 13 or 15 (d)
1934 Securities Trading Act for the fiscal year ended December 31, 2018☐Transition reports submitted under sections 13 or 15 (d)
Provisions of the Securities Exchange Act of 1934 on the transition period from the Commission file number1-
9328 ECOLAB(
The exact name of the registrant specified in the articles of association)
Delaware 41-0231510 (
State or other jurisdiction registered or organized)(I. R. S.
Employer identity number)
1 St Ecolab Square
Paul 55102, Minnesota (
Main executive office address)(Zip Code)
Registrant phone number including area code: 1-800-232-
6522 securities registered under article (b)
Title of the act: each class name of each exchange registered for common stock, $1. 00 par value 2.
625% euro notes due 2025.
New York Stock Exchange 000% euros due 2024 euros
New York Stock Exchange Limited
New York Stock Exchange Limited
Securities registered under section 12th (g)
Key points of the bill: no one indicates by check mark whether the registrant is a well or not
Well-known experienced issuers as defined in Rule 405 of the Securities Act.
☒Yes. ☐There is no check mark to indicate whether the registrant does not need to submit a report under Section 13 or section 15 (d)of the Act.
☐Yes. ☒The registrant is not indicated by the check mark (1)
All reports requested in Section 13 or 15 have been submitted (d)
Securities Trading Act of 1934 within the first 12 months (
Or a short period of time required for the registrant to submit such reports), and (2)
This filing requirement has been bound for the last 90 days.
☒Yes. ☐No checkmark indicates whether the registrant has electronically submitted each Interactive Data File required to be submitted in accordance with the rul05 05 of the S-regulationT (§232.
This Chapter 405)
Within the first 12 months (
Or within a shorter period of time when the registrant is required to submit such documents.
☒Yes. ☐No check mark was passed to indicate whether the declarant in arrears was disclosed under S-regulation 405thK (§229.
This Chapter 405)
As the registrant is aware, it is not included here and will not be included in the final proxy or information statement referenced in Part 2 of this Form 10 --
K or any amendments to this form 10K.
☐Indicate by check mark whether the registrant is a large accelerated file manager, a non-accelerated file manager
A smaller reporting company, or an emerging growth company.
See the definitions of "large accelerated file manager", "Small Reporting Company" and "emerging growth company" in Rule12b
2 of the Trading Act.
Big speed filer☒Speed up filer☐Non
Speed up filer☐Small Reporting Company☐Emerging growth companies☐If an emerging growth company, please indicate by check mark whether the registrant chooses not to use the extended transition period to comply with any new or revised financial accounting standards provided under section 13 (a)
The Trading Act.
☐Indicate whether the registrant is a shell company by check mark (
Defined in Rule 12b-
2 parts of the transaction law).
☐Yes. ☒Total market value for voting and non-voting
Voting Ordinary Shares held by non-shareholders
On June 29, 2018, the last working day of the second fiscal quarter recently completed by the registrant, the registrant's subsidiary: $40,354,321,454 (
See item 12 under Part II of this agreement)
Based on the closing price of $140 of the registrant's common stock. 33 per share.
Number of shares of the registrant's common stock at a par value of $1.
00 shares, issued as of January 31, 2019: 287,853,232 shares.
Documents to be incorporated in the reference section of the registrant's proxy statement for the annual meeting of shareholders held on May 2, 2019, and will be submitted within 120 days of the registrant's fiscal year as of December 31, 2018 (
(Hereinafter referred to as "agency Statement ")
, Incorporated into the second part by reference.
Catalogue of ECOLAB companiesFORM 10-
K. Part I of the directory start page for the year ended December 31, 2018. Business . 3 Item 1A. Risk Factors . 16 Item 1B.
The employee's opinion was not resolved. 20 Item 2. Properties . 21 Item 3.
Legal proceedings. 22 Item 4.
Information disclosure of mine safety.
Project 5.
The market in which the registrant's common stock, related shareholder matters and the issuer purchase equity securities. 23 Item 6.
Select financial data. 24 Item 7.
Management Discussion and Analysis of Financial Position and operational results. 25 Item 7A.
Quantitative and qualitative disclosure of market risks. 48 Item 8.
Financial statements and supplementary information. 49 Item 9.
Changes and disagreements with accountants in accounting and financial disclosure. 101 Item 9A.
Control and procedures. 101 Item 9B.
Other information
101 item 10 of Part II.
Directors, executives and corporate governance. 102 Item 11.
Executive compensation. 102 Item 12.
Secured ownership of certain beneficial owners and management and related shareholder matters. 103 Item 13.
Certain relationship and related party transactions, the independence of directors. 103 Item 14.
Major accounting fees and services.
Part IV of 103.
Schedule of financial statements. 104 Item 16. Form 10-K Summary.
109 2 the first part of the Directory, unless otherwise required by the context, references in this form 10-K to (i)
"Ecolab", "company", "us" and "ours" are Ecolab companies
And its subsidiaries; (ii)
"Nalco", "Nalco Company" and "Nalco Champion" are wholly owned subsidiaries of Nalco Co. , Ltd.
Subsidiaries of the company; (iii)
"Naco transaction" is the merger of Yi Kang and Naco holding company completed on December 2011; and (iv)
The "champion deal" is for us to acquire privately held champion technology and its related company Corsicana Technologies in April 2013. Item 1. Business .
Comprehensive development of business.
Ecolab was incorporated as Delaware corporation in 1924.
Our fiscal year is the calendar year until the 31st.
International subsidiaries incorporate financial statements based on their US businessS. GAAP (
Generally accepted accounting principles in the United States)
Financial year November 30
Objective to facilitate the timely inclusion of these entities in our consolidated financial reports.
We continue to invest and build our business through various acquisitions that complement our strategic vision.
See Part II of this form, Item 8, note 4 10-
More information about the company's acquisition and divestiture.
Description of the business.
Total sales were $2018.
7 billion. we are a global leader in water, sanitation and energy technologies and services that protect people and vital resources.
We provide comprehensive projects, products and services to promote safe food, maintain a clean environment, optimize water and energy use, and for food, health care, energy, hotels and industrial markets in more than 170 countries around the world.
Our cleaning and disinfection programs and products, as well as insect removal services, in the management of catering services, food and beverage processing, hotels, healthcare, government and education, retail, Textile Care and commercial facilities.
Our products and technologies are also used in water treatment, pollution control, energy conservation, oil production and refining, primary metal manufacturing, paper making, mining and other industrial processes.
By providing a range of innovative projects, products and services, we pursue a strategy of "around customers-around the world" designed to meet the specific operational and sustainable needs of customers around the world.
Through this strategy and our diverse portfolio of products and services, a customer can take advantage of the products of several of our operations.
The following description of our business is based on the reportable part that we report in our consolidated financial statements for the year ended December 31, 2018, which is located in item 8, Part 2 of this Form 10 --K.
The nature of business departments, products and production processes with similar economic features and future prospects, terminals
The use of markets, distribution channels and regulatory environment has been integrated into three reporting areas of global industry, global institutions and global energy.
The operating part that does not meet the quantity Standard reported separately has been merged into another part.
Compared to our three Report-able sections, we provide similar information for other sections, because we believe that information about its basic operations section is useful for understanding our Merge results
The reporting area of global industry consists of water, food and beverage, paper, life sciences and textile care operations that provide water treatment and process applications and cleaning and disinfection solutions, mainly for manufacturing, food and beverage processing, transportation, chemistry, primary metals and mining, power generation, pulp and paper making, pharmaceutical and commercial laundry industries.
The basic operating department has similar manufacturing processes, distribution methods and economic features.
Here is a description of the five operating departments that make up our global industrial reporting sector.
In addition to the pulp and paper industry served by paper and the energy industry served by energy, water serves customers in the industrial and institutional markets.
On the water, our light industry market includes food and beverages, manufacturing and transportation, as well as institutional customers including commercial buildings, hospitals, universities and hotels.
Heavy industries that provide services include electricity, chemicals, primary metals and mining.
3 catalog water provides water treatment products and water technical solutions for cooling water, wastewater, boiler water and process water applications.
Our cooling water treatment program is designed to control challenges related to cooling water systems
Corrosion, dirt, microbial dirt and pollution
Open cycle once
Through and off the system.
Our wastewater treatment products and projects are committed to improving the overall economy of the plant, addressing compliance issues, optimizing equipment efficiency, and improving the capabilities and efficiency of operators.
We offer integrated chemical solutions, process improvements and mechanical component improvements to optimize boiler performance and control the formation of corrosion and scale --up.
Our project helps plant process water use by optimizing the performance of handling chemicals and equipment to minimize costs and maximize return on investment.
Our products include professional products such as anti-scale and corrosion inhibitor, anti-fouling agent, pre-
Treatment Solution, membrane treatment, coagulation agent and flocculation, and resistance
Our 3D trasar tm technology combines chemistry, remote services, and monitoring.
We offer products and solutions for water treatment and process applications designed to combine environmental and economic benefits for our customers.
Typically, saving water, saving energy, maintaining and avoiding capital expenditures is one of the main sources of value we create for our customers, through product quality and production improvements, many of our products also offer key differentiated features.
Our products are mainly sold by our company customers and on-site sales staff.
We believe we are one of the leading suppliers in the world.
Products and project suppliers widely used in industrial water treatment industry.
Food and beverages are dedicated to cleaning and hygiene to promote the processing of consumer products for human beings.
Food and Beverage provides detergents, detergents, disinfectants, lubricants and animal health products for chemical products mainly used in dairy factories, as well as cleaning systems, electronic dispensers and chemical syringes, dairy farms, breweries, soft
Beverage bottling plants and processors for meat, poultry and other foods.
Food and beverages are also leading developers and sellers of antibacterial products produced in direct contact with meat, poultry, seafood and processing to reduce microbial contamination.
The food and beverage also designs, engineers and installs CIP (
"Clean place ")
Provide process control system and facility cleaning system for customers.
The products used for processing facilities are mainly sold by our company account and on-site sales staff, while the products used for farms are sold through dealers and independent third parties
Party distributors
We believe we are one of the leading suppliers in the world.
Provides a wide range of cleaning and disinfection products for dairy plants, dairy farms, food, meat and poultry, and beverage/beer processing industries.
Paper making provides water and process applications for the pulp and paper industry, providing a comprehensive portfolio of projects for all major steps in the paper making process and for all grades of paper, graphic grade, cardboard and packaging as well as paper towels and towels are included.
Paper offers its customers water treatment and wastewater treatment products and projects similar to water.
In addition, the paper also provides two professional projects different from water
Pulp applications and paper applications.
Our pulp applications maximize process efficiency in bleaching operations, improve pulp cleanliness and brightness, and take advantage of on-
Design effective treatment options to avoid expensive failures.
Our paper process application is dedicated to improving the operational efficiency of our customers.
Advanced Sensing, monitoring and automation combine with innovative chemistry and detailed process knowledge to provide customers with a wide range of solutions.
The special products include: flocculation, coagulation agent, dehydration auxiliary agent, biogas digester yield additive, etc.
Our products are mainly sold by our company customers and on-site sales staff.
We believe we are one of the leading suppliers in the world.
A wide range of water treatment products and processes contribute to the pulp and paper industry.
Life science Life Sciences provides pollution control, cleaning and disinfection solutions for personal care and pharmaceutical manufacturers.
Life Sciences provides detergents, detergents, disinfectants, and cleaning systems, electronic dispensers, and chemical syringes for applications of chemical products.
In addition, we also sell sterile alcohol, sterile biokilling agents, residue removal and dilution solutions, surface wipes, dispensing equipment and aerosol, which are mainly used for applications in clean room environments.
Products and projects are mainly sold through our on-site sales staff and corporate customer staff, and are sold to a lesser extent through distributors.
Life Sciences consists of customers and accounts related to manufacturing in the following industries: Pharmaceutical, animal health and medicine, biological products, cosmetics and medical devices.
Our comprehensive solutions and technical knowledge tailored
How to improve the operation efficiency of customer cleaning, hygiene and disinfection process while ensuring product quality and safety.
4 catalogue Textile Care provides products and services that manage the entire washing process through customized design procedures, quality products, distribution equipment, water and energy management, provides real-time data management for large and complex business laundry businesses, including unified leasing, hotel services, linen leasing, and healthcare laundromat.
Textile Care's project is designed to meet the customer's need for superior cleaning while extending the service life of linen and reducing the overall operating cost of the customer.
Products and projects are mainly marketed through our on-site sales staff and to a lesser extent through distributors.
We believe we are one of the leading suppliers in the world.
The laundry market we compete in is very large.
Global agency this reportable sector consists of institutional, professional and healthcare operations to provide professional cleaning and disinfection for food services, hotels, accommodation, healthcare, government, education and retail
The basic operating department has similar manufacturing processes, distribution methods and economic features.
The description of the three operational units that make up our global reporting unit is as follows.
The agency sells professional cleaners and disinfectants for washing dishes, glassware, tableware, catering equipment and kitchen equipment (“warewashing”)
, As well as professional cleaners for various applications throughout food service operations
Under the premise of laundry (
Usually used by hotel and healthcare clients)
Average room service.
We also sell food safety products and equipment, water filters, dishwasher racks and related kitchen sundries to the catering, accommodation, education and healthcare industries.
The agency also provides swimming pools and spa treatment programs for hotels and other commercial customers, as well as various cleaning and floor care products and programs for customers in hotels, healthcare and commercial facilities.
The agency develops a variety of chemical distribution systems that customers can use to efficiently and safely distribute our cleaners and disinfectants.
In addition, the institutional market includes the energy leasing program-
Efficient dishwasher, detergent, rinse additive and disinfectant including full machine maintenance.
Through our eco-food safety management business, the agency also provides customized
Provide on-site assessment, training and quality assurance services for catering service operations.
The organization mainly sells its products and projects through its on-site sales and company customer sales personnel.
Company customer sales people build relationships and negotiate contracts with more than one customer
Unit or "chain" customer.
We also take advantage of independence.
Extensive party catering service
Provide logistics services to customers who like to work through these distributors.
Many distributors are also involved in marketing our products and services to end customers.
Through our field sales staff, we usually provide the same customer support for the terminal
Use customers provided by these distributors, as with direct customers.
We believe that we are one of the world's leading suppliers of warehouse washing and laundry products and projects for food services, hotels and accommodation markets.
Mainly provides cleaning and disinfection of chemical products and related items to regional, national and international express service restaurants (“QSR”)
Food chain retailers (i. e.
Supermarkets and grocery stores).
Its products include special and general purpose hard surface cleaners, skim agents, disinfectants, polishes, hand care products and a variety of cleaning tools and equipment mainly sold under the brands "Ecolab" and "Kay.
Specialty's cleaning and hygiene program is tailored to meet the needs of the market segments of its services, designed to provide efficient cleaning performance, promote food safety, and reduce labor costs, improve the security of users and guests.
There are many distribution options for products in the core product range.
Specialty supports sales of its products through training programs and technical support designed to meet the special needs of customers.
Both Specialty's QSR business and its food retail business leverage its corporate customer sales team, which manages customer relationships at the corporate and regional office levels (
In the QSR segment, at the franchisee level)
And the on-site sales team they provide project support at the various restaurant or store levels.
QSR customers are mainly provided through third-party distributors, while most food retail customers use their own distribution network.
Although Specialty's customer base has expanded over the years, Specialty's business is still heavily dependent on a limited number of major QSR chain stores, franchisees and large food retail customers.
We believe that we are one of the leading suppliers of cleaning and disinfection products in the global QSR market and a leading supplier of cleaning and disinfection products in the global food retail market.
5 catalogue Healthcare provides infection prevention and surgical solutions for acute care hospitals, surgical centers and OEMs of medical devices (“OEM”).
Proprietary infection prevention and surgical solutions in health care (
Hand hygiene, hard surface disinfection, instrument cleaning, patient curtains, equipment curtains and surgical liquid heating and cooling systems)
Mainly sold to various departments in acute care settings under the brands "Ecolab", "Microtek" and "Anios (
Infection control, environmental services, central sterility and operating room).
Healthcare sells its products and programs mainly through its on-site sales staff and corporate customer staff, but also through healthcare dealers.
We believe we are the leading provider of infection prevention and surgical solutions in the US and Europe.
Global Energy, a reporting unit operating primarily in the name of the Nalco Champion, consists of an energy operations unit that serves the needs of process chemicals and water treatment for upstream and downstream applications in the global oil and petrochemical industry.
Energy supply-
Site, technology
Drive solutions for global drilling and completion, oil and gas production, and refining and petrochemical industries.
Our portfolio includes: additives, inhibitors, oil and water separation for drilling and well stimulation, scale prevention, paraffin and asphalt control, biokilling agent, hydrate control, hydrogen sulfide removal, oil Defoamers and-
Foamers, flow booster,
Crude oil desalination agent, monomer inhibitor,-
Additives, fuel and lubricant additives and traditional water treatment.
The energy operations division operates under an upstream group consisting primarily of our WellChem and oilfield chemicals business and downstream refineries and petrochemical processing groups.
Our Upstream Group provides solutions for the oil and gas production sector, including crude oil and gas production, pipeline collection/transmission systems, natural gas processing, heavy oil and asphalt upgrades, water management and increased oil recovery.
The upstream also provides chemicals for the cementing, drilling, fracturing and acidification stages of drilling and production increases.
Our top priority is to safely manage the key challenges facing today's oil and gas producers in the asset lifecycle by helping our customers minimize risk and achieve production goals, maximize profits.
Our downstream group provides products and projects for process and water treatment applications in the refining and fuel industries, enabling our customers to refine and upgrade hydrocarbons profitably.
Our heavy oil upgrade program minimizes operating costs and reduces the impact of dirt, corrosion, blistering and heavy metals in the refining process.
We also provide fuel additives, including corrosion inhibitors, to protect the engine fuel system and pre-
Underground storage tanks and pipeline markets.
Our customers include many of the largest publicly traded oil and gas companies, as well as national oil and gas companies and large independent oil and gas companies and service companies.
Our energy products are mainly sold by our company customers and on-site sales staff and are sold to a lesser extent through distributors, sales agents and joint ventures.
We believe that we are one of the leading global suppliers of professional chemicals in the upstream oil and gas industry as well as downstream refineries and petrochemical operations.
The others include the technical team for insect removal and colloid and (
Before the sale on November 2017)
Equipment maintenance, operation segment.
These operating segments do not meet the quantitative criteria for individual aggregation.
When we believe that this information helps to understand our consolidated results, we disclose these operational parts to other extent.
Pest removal provides services designed to detect, eliminate and prevent pests in restaurants, food and beverage processors, educational and medical facilities, and in hotels such as rodents and insects, quick service at restaurants and grocery stores as well as other institutional and commercial clients.
Pest removal services are sold and executed by our on-site sales and service personnel.
Pest control continues to expand its geographical scope.
In addition to the US being the largest business, we have operations in various countries in Asia Pacific, Western Europe, Latin America and South Africa, with the largest business in France, the UK and Greater China.
We believe that deworming is the leading supplier of deworming programs, providing deworming programs to the commercial, hotel and institutional markets in the regions it serves.
The Colloidal Technologies Group came into effect on 2018. we have established the Colloidal Technologies Group (“CTG”)
Operation segment.
CTG produces and sells colloidal silica consisting of nanoparticles
Size particles of silica in water.
These products and related programs are mainly used for binding and polishing applications.
CTG provides services to customers in multiple industries such as semiconductor manufacturing, catalyst manufacturing, chemicals and aerospace component manufacturing.
Directory CTG works closely with customers to develop customized solutions that meet their operational technical needs. Our silica-
Basic applications are widely used for polishing silicon wafers, semiconductor substrates, and precision surface polishing of optics, watch crystals and other glass components.
We offer a variety of silicone-
It can be used as an adhesive in a non-homogeneous catalyst system and as a base particle for the manufacture of silica nutrients for special zeolite.
Our silicone products are used globally as an adhesive for precision investment casting paste, eventually helping to make near net-
Shape of turbine blade and golf club top metal parts.
Our products are mainly sold by our customers.
We believe we are one of the world's leading suppliers of colloidal silica.
Before the sale of equipment Care in November 2017, equipment Care provides equipment maintenance, maintenance and preventive maintenance services for the commercial food service industry.
Provide repair service for in-
Warranty repair, as an authorized service agent for the manufacturer, and after-sales serviceWarranty repair.
In addition, equipment repair services companies and terminals operated as part dealersuse customers.
The operation is conducted only in the United States.
We operate directly in about 100 countries outside the United States
Owned subsidiaries, or in some cases, through joint ventures with local partners.
In some countries, our export business sells selected products to distributors, agents or licensees, although the number of these sales does not matter for our total revenue.
Generally speaking, our business outside the United States is similar to that in the United States.
Our business operations outside the United States face the usual risks of foreign operations, including trade and foreign investment laws, international business laws and regulations, possible changes in tax laws, currency exchange rates and economic and political conditions.
The profitability of our international business is generally lower than the profitability of our business in the United States because (i)
Additional costs of operating in many different foreign jurisdictions with different laws and regulations ,(ii)
The cost of importing certain raw materials and finished products in some areas is high ,(iii)
Some of the smaller locations have smaller international operations, and (iv)
Additional reliance on distributors and agents in certain countries may have a negative impact on our profits.
In order to promote the growth of our international business, sales and technical support investments need to be increased accordingly in some regions.
In general, the market for corporate competition in our global industrial reporting area is led by a number of large companies, and the rest of the market is served by smaller entities, focus on a more limited geographic area or a smaller subset of products and services.
Our business in this area competes based on its demonstrated value, technical expertise, chemical preparations, customer support, testing equipment, monitoring capabilities, and metering equipment.
There are two important types of competitors in the business of our global agency reporting Department and other departments.
First, we compete with a small number of large companies that sell directly or through distributors of national or international scale.
Second, we have many smaller areas or local competitors that focus on a more limited geographical location, product line and/or terminal
Use customer base.
We mainly help our customers protect their brand reputation by providing superior value, high-quality customer support and differentiated products.
Our global energy reporting sector competes with a limited number of multinational companies, and the rest of the market consists of smaller regional niche companies focused on a limited geographic area.
We compete in this business based on our product quality, technical expertise, chemical formulation, effective global supply chain, strong customer service and emphasis on safety and environmental leadership
Sales of products, systems and services are mainly sold by our company in the domestic and international markets
Trained on-site sales staff, who also provide appropriate and effective product and system usage advice and assistance to our customers to meet a full range of cleaning and hygiene requiring water treatment and process chemistry.
Third Independence
Party distributors and sales agents are used in several markets, as described in the above Segment description.
As of December 31, 2018, we had 49,000 employees.
7 catalog customers and product categories we believe our business is not dependent on individual customers.
Also, although we have a diverse customer base and no customer or distributor accounts for 10% or more of our combined revenue of 2018, we do have a client and independent third
A party distributor whose losses may have a significant adverse effect on the operating results of the affected income period;
However, we believe that such incidents are unlikely to have a significant adverse effect on our financial situation.
Any important part of our business shall not be renegotiated or terminated in the election of government departments.
We sell a category of products in the global agency reporting Department, which accounted for 10% or more of consolidated net sales over the past three years.
In 2018, sales of washing products in warehouses accounted for about 11%, 2017 and 2016 of consolidated net sales.
We own and license patents and trademarks for multiple patents, trademarks and other intellectual property rights.
While we have a positive plan to protect our intellectual property rights by applying for a patent or trademark and taking legal action in due course to prevent infringement, except for the items listed below, we do not believe that our overall business relies heavily on any individual patent or trademark.
Patents related to our TRASAR and 3D TRASAR technologies that are critical to our global industrial reporting field. U. S.
Foreign patents protect all aspects of our key TRASAR and 3D TRASAR technologies until at least 2024.
Trademarks related to Ecolab, Nalco, and 3D TRASAR that are important for all of our reportable market segments.
Ecolab, Nalco and 3D TRASAR trademarks have been registered or applied in all our major markets and we expect to maintain them indefinitely.
Seasonal our quarterly operating performance changes due to seasonal fluctuations in sales volume and business mix.
Part II, Item 8, note 19, entitled "quarterly financial data for table 10"
K incorporated here by reference.
We have no unusual working capital requirements for investment in equipment.
We have invested in the past and will continue to invest in the future, process control and monitoring equipment, mainly composed of systems used by customers to distribute our products and monitor water systems.
In Management's Discussion and Analysis of the financial position and results of operations, investment in such equipment was discussed under the heading "investment activities"K.
Manufacture and distribute most of our products and related equipment in the company
Production facilities.
Some products are also produced for us by third parties.
Contract manufacturer.
Purchase of other products and equipment from third partiesParty suppliers
For more information on the purchase of products/equipment see the breakdown discussion above, for more information on our manufacturing facilities see Part I, Item 2.
"Properties" of this Form 10-K.
Deliver goods to customers from our manufacturing plant and distribution center network
Logistics service providers.
We use ordinary means of transport, our own means of transport and distributors.
More information about our factory and distribution facilities is located under Part 1 Project 2.
"Properties" of this Form 10-K.
The raw materials purchased for the manufacture of our products are inorganic chemicals, including alkali, acid, biokilling agent, phosphate, phosphorus material, Silicon salt and salt;
Organic chemicals including acid, alcohol, Amine, fatty acid, surface active substance, solvent, monomer and polymer.
Healthcare purchases plastic film and parts to manufacture medical devices that serve the surgical and infection prevention markets.
Pesticides used for deworming are finished products purchased under contract or from the producer or its distributor.
We also purchase packaging materials for manufactured products and components for our professional cleaning equipment and systems.
We purchase more than 10,000 of raw materials, and the largest single raw materials account for less than 3% of raw materials.
In addition to some of the special chemicals we manufacture, our raw materials are usually purchased on an annual contract and can usually be obtained in sufficient quantities from different supplier groups around the world.
If feasible, use global sourcing so that the purchase or production location can be transferred to the global competitive level to control the cost of the product.
8 catalogue research and development our research and development plan mainly includes the development and verification of the performance of new products, processes, technologies and equipment, the improvement of existing efficiency, and the improvement of service project content, evaluate the environmental compatibility of the product and provide technical support.
Key disciplines include analytical and formulation chemistry, microbiology, process and packaging engineering, remote monitoring engineering, and product dispensing technology.
Basically, all of our major products are developed by our research, development and engineering staff.
We believe that ongoing R & D activities are critical to maintaining our leadership in the industry and will provide us with a competitive advantage in seeking more business with new and existing customers.
Over time, we have established partnerships or joint ventures to meet local ownership requirements, achieve faster operational scale and expand our capabilities, provide more comprehensive integration services to our customers, or provide other benefits to our business or customers.
During 2018, the total impact on the combined net income of our joint venture was less than 3%.
The table below lists our most important mergers and non-mergers
The combined joint venture is summarized by the main purpose of the joint venture.
Local ownership requirements/location of geographic expansion joint ventureLtd.
Saudi Arabia Global Energy Corporation, Global Industry Corporation, Angola kazakhstan ada Angola Global Energy Corporation RauanNalco LLP ha Global Energy Corporation champion, for example, Equatorial Guinea Global Energy UAE national chemical company UAE global energy Malaysia energy chemical and Service Co. , Ltd. Bhd.
Arpal Gulf, Malaysia Global Energy Company, LLC UAE
Ichi India Private Limited India Global Energy Company champion Ghana Limited Ghana global energy operations scale/Geo critical quality joint venture
Aquatech International, location division, Japan global industrial technology/extended product delivery/manufacturing capabilities joint venture, LLC global industrial processing water outsourcing, USAA.
Spain Global Industrial Century Co. , Ltd. US global agency Kogalym Chemical Plant Co. , Ltd. Russia Global Energy petroleum chemical performance products Azerbaijan global energy HanSteel dalco water treatment (Handan)Co.
We will continue to assess the potential of partnerships and joint ventures to help us expand our geographic, technical and product reach.
9 catalogue environmental and regulatory considerations our business is subject to various legislative regulations and regulations related to the protection of the environment and public health.
While we work with government authorities and take commercially viable measures to meet regulatory requirements and avoid or limit environmental impacts, there are some inherent risks in our business.
This includes the transportation and management of hazardous materials as well as the associated costs of waste disposal and site cleaning at the plant, and if we are found to be in violation of the law, fines and penalties, and modifications, interruption or stop of certain operations or types of operations including product recall and restructuring.
Similarly, our demand for certain products and services depends or may be limited by government laws and regulations.
Changes in these laws and regulations, including air pollution regulations and regulations related to oil and gas production (
Including hydraulic fracturing related)
May affect the sales of some of our products or services.
In addition to the increased cost of manufacturing and delivering products, changes in production regulations or product regulations may cause disruption to our business, if we are unable to meet the customer's needs for the product, it may cause economic or indirect losses.
Furthermore, although we are not aware of any such situation at the moment, there is no guarantee that future legislative or enforcement policies will not have a significant adverse effect on the outcome of our integrated actions, financial position or cash flow.
The environmental and regulatory matters that are most important to us are discussed below.
Component legislation: national, local and foreign jurisdictions have enacted various laws and regulations related to the sale of products containing phosphorus, volatile organic compounds, or other components that may affect human health or the environment.
For example, according to California's proposal No. 65, certain products containing chemicals listed in California need to disclose labels.
Some states are advancing chemical management initiatives to promote pollution prevention through research and development of safer chemicals and safer chemical processes, including California, Maine, Maryland, Massachusetts, Minnesota, Oregon and South Carolina
So far, nine states have enacted a plan for environmental procurement of clean products, and several other state legislatures have been considering it in recent years.
The United States has introduced clean product component disclosure legislation. S.
Congress has not passed in the past few years, and several states are considering further regulations in this area.
In 2017, California passed the Clean product Right to Know Act of 2017, which requires transparency in ingredientsline and on-
Label before 2020 and 2021 respectively.
New York has issued an ingredient disclosure guide under existing regulations, but final compliance has been delayed due to litigation. The U. S.
The government is monitoring the Green Chemistry Initiative through various initiatives, including its Environmental Design "(“DfE”)
/More secure options plan.
There are three broad areas of work chosen by DfE/Safer (
Identify safer products on DfE/safer selection labels, develop best practices for industrial processes, and evaluate safer chemicals)
We are involved in this to varying degrees.
Our global institutions and global industrial cleaning products are subject to regulations and may incur additional stays --in-
Market costs associated with the analysis of the required alternatives to the chemicals of concern.
So far, we have generally been able to comply with these legislative requirements by reformulating or labeling changes.
To date, such legislation has not had a significant adverse effect on our consolidated operating results, financial position or cash flow.
TSCA: National Administration of major chemicals and administration of toxic substances (“TSCA”)
, With the passage of Frank R, the first update in 40 years
Laurtenberg chemical safety act in the 21 st century (“LCSA”)in 2016.
LCSA modernized the original 1976 legislation to improve public confidence in the safety of chemicals in business and the United StatesS.
Environmental Protection Department (“EPA”)
The ability and authority to regulate existing and new chemicals and to prevent further national actions or other notification plans such as REACH (see below).
For Ecolab, changes in TSCA primarily affect the testing and submission costs of new chemicals in the United States.
In addition, EPA may be more active in using existing TSCA tools to manage the chemicals of concern.
We expect that compliance with the new requirements under TSCA may be similar to the costs associated with eu reach, which will be discussed below.
REACH: The EU has developed a regulatory framework for the Registration, Evaluation and Authorization of Chemicals (“REACH”).
A new European chemicals authority has been established (“ECHA”)
HELSINKI, Finland is responsible for assessing the data to identify hazards and risks and to manage the plan, authorizing the sale and distribution of chemicals in Europe. We met the pre-
Registration requirements for REACH, and registration deadlines for 2010, 2013 and 2018.
To help manage this project, we have been simplifying our product line and working with chemical suppliers to comply with the registration requirements.
In addition, countries such as South Korea, Taiwan and Turkey are also implementing similar requirements.
For us, the potential costs are not yet fully quantifiable, but are not expected to have a significant adverse impact on our consolidated operating results or cash flow or financial position during any reporting period.
Global Harmonization System: in 2003, the United Nations adopted a chemical hazard communication and labeling standard called the global system for the classification and labeling of chemicals (“GHS”).
GHS aims to promote international trade and strengthen the safe handling and use of hazardous chemicals through a global system that classifies them according to their inherent hazards, and through standardized product labels and safety data sheets (“SDSs”).
Most of the countries we operate will adopt GHS-
By 2020, many countries had passed relevant legislation.
The main cost of compliance is to re-classify products, modify SDSs and product labels.
We have completed 2015 deadlines in the United States. S.
The EU and the EU are working in a phased direction
In reducing the cost of implementing a globally unified system in other countries (e. g.
Australia, Canada, Thailand).
It is expected that the potential costs for us will not have a significant adverse impact on our consolidated operating results or cash flow or our financial position during any reporting period.
10 catalogue of pesticide and biokiller legislation: various international, federal and state environmental laws and regulations governing the production and/or use of pesticides.
We produce and sell certain disinfection, disinfection and material preservation products that kill or reduce microorganisms (
Bacteria, viruses, fungi)
On the surface of the hard environment, the processing liquid and certain foods.
According to the current definition of the federal pesticide, fungicides and rodenticides act, these products constitute "pesticides" or "antimicrobial pesticides "(“FIFRA”)
As amended by the Food Quality Protection Act of 1996, the act is the main federal regulation governing the manufacture, labeling, handling and use of pesticides.
We keep hundreds of products registered with the United States. S.
Environmental Protection Bureau (“EPA”).
Registration is required to meet certain efficacy, toxicity and labeling requirements and to pay the following fees
Go to the registration fee.
In addition, each state where these products are sold requires registration and payment.
As a general rule, states have not made substantive requirements that are different from those required by the Sopra.
However, California and a number of other states have taken additional regulatory initiatives, with California taxing the state's total pesticide sales.
While the cost of complying with pesticide rules has not had a significant adverse effect on our consolidated operating results, financial position or cash flow to date, the costs and delays of these products in obtaining the necessary approvals continue to increase.
The total amount of fees paid to EPA and states to obtain or maintain pesticide registration is not expected to have a significant impact on our consolidated operating results or cash flow or our financial position during any reporting period.
In Europe, the biokilling Product Directive and the recent biokilling product regulations establish a project to evaluate and authorize biokilling active substances and product marketing.
We are working with suppliers and industry groups to manage these requirements and meet the first relevant deadline for the project by submitting active substance profiles in a timely manner.
Estimated registration fee, which will pass moreyear phase-
The period will be significant;
However, these costs are not expected to have a significant impact on our consolidated operating results or cash flow or our financial position during any reporting period.
The same is true of emerging biokilling regulations in Asia.
In addition, insect removal is restricted-
Use the pesticides it usually buys from third parties.
The enterprise must comply with certain standards relating to the use of such pesticides and the licensing of employees applying for such pesticides.
These regulations are mainly enforced by state or local jurisdictions in accordance with federal regulations.
We have not encountered substantive difficulties in complying with these requirements.
FDA requirements for antimicrobial products: various laws and regulations have been enacted in federal, state, local and foreign jurisdictions to regulate certain products that we manufacture and sell to control microbial growth in humans, animals and foods.
In the United States, these requirements are usually managed by the United States. S.
Food and Drug Administration ("FDA"). However, the U. S.
The Ministry of Agriculture and the Environmental Protection Agency may also have regulatory jurisdiction over antibiotics that apply to food.
In order to ensure the quality, safety and effectiveness of the products, FDA has compiled regulations on these product categories.
The FDA has also been expanding its requirements for such products, including regulations for excessive sales. the-
Counter sanitizing drugs, when finalized by the FDA, additional requirements may be made for antimicrobial hand care products and associated costs.
FDA regulations related to the Food Safety Modernization Act may put additional requirements on the safety product line.
To date, these requirements have not had a significant adverse effect on our consolidated operating results, financial position or cash flow.
Medical device and drug requirements: as manufacturers, distributors and marketers of medical devices and human drugs, we are also regulated by the FDA and the corresponding national regulatory authorities, the local and foreign governments where we sell products.
These regulations govern the development, testing, manufacturing, packaging, labeling, distribution and marketing of medical devices and pharmaceutical products.
We are also required to register with the FDA as a manufacturer of medical devices and medicines after compliance
Market Report (e. g.
Reports of adverse events, multi-drug resistance and recall)
Requirements, in order to comply with the FDA's current good manufacturing practices and quality system regulations that require us to have a quality system to design and produce our products, for commercial distribution in the United States and the United States to meet our record requirements in manufacturing, testing and control activities.
European Union states require certain products sold within their jurisdiction to be "CE-marked", an international symbol of compliance with quality assurance standards and manufactured in accordance with certain requirements (e. g.
, Medical Device Directive 93/42/EE and ISO 13485).
We have obtained CE mark's approval to sell a wide range of medical devices and pharmaceutical products in Europe.
Our other International
European business is also regulated by government and state
Specific rules and regulations.
Regulators at the federal, state and local levels have been implemented and are currently considering and expected to continue to regulate medical devices and medicines.
The potential impact of any such future regulations cannot be predicted and there is no guarantee that future legislation or regulations will not increase the cost of our products or prohibit the sale or use of certain products.
Equipment: Ecolab products are distributed by equipment that meets the requirements of state and local regulations and equipment that meets UL, NSF and other approval requirements.
We have a special production facility and a third one.
Production of our equipment.
We are developing processes to monitor and manage changing regulatory regimes and assist in compliance with equipment systems.
To date, these requirements have not had a significant adverse effect on our consolidated operating results, financial position or cash flow.
11 catalogue other environmental legislation: our manufacturing plants are bound by laws and regulations governing the discharge of hazardous substances and transportation to the environment under federal, state, local or foreign jurisdiction, treatment and disposal of such substances.
The main federal regulations applicable to our activities in the United States are the Clean Air Act, the Clean Water Act and the Resource Conservation and Recovery Act.
We must also comply with the Superfund amendment and re-authorization Act of 1986, which puts certain reporting requirements on the discharge of hazardous substances to air, land and water.
Our products produced and distributed to Europe are also subject to the directive to control electrical waste (
WEEE Directive 2012/19/EU)
And restricted substances (
RoHS Directive 2011/65/EU).
Similar legal requirements apply to the facilities of the global ecological laboratory.
In order to comply with environmental laws and regulations, to promote the safety of employees and to implement the principles of environmental sustainability that we have announced, we make capital investments and expenditures.
To date, these expenditures have not had a significant adverse effect on our consolidated operating results, financial position or cash flow.
In 2018, our capital expenditure on global environmental, health and safety projects was approximately $60 million, compared to $70 million in 2017.
The global project budget for 2019 was approximately $60 million.
Climate change: various laws and regulations related to climate change have been implemented or are being considered at the international, national, regional and national levels, especially in connection with greenhouse gas reduction (“GHG”)emissions.
These laws and regulations are not directly applicable to ecological laboratories at present;
However, as a corporate policy, we support a balanced approach to reducing greenhouse gas emissions while maintaining economic growth.
Besides, climate
Relevant risks are assessed in our enterprise risk management process and in our annual business importance risk assessment, which is consistent with the recommendation of the Financial Stability Board (FSB)
Task force on climate issues
Related financial disclosure (TCFD).
Ecolab is evaluating the further application of the TCFD proposal for the next three to five years, based on the proposed schedule of TCFD.
Our current global sustainable development goals were set in 2016.
This includes a 25% reduction in water intake and a 10% reduction in greenhouse gas emissions by 2020.
In addition to our in-house sustainability performance, we also work with customers in more than 3 million customer locations around the world through our high-
Efficiency solutions for cleaning and sanitation, water, paper and energy services.
We also launched our customer impact goals for the first time.
By working with our customers to help them do more work at less cost by using our solutions, our goal is to help our customers save 300 billion gallons per year by 2030
Environmental remediation and litigation: with many other potential responsible parties (“PRP”)
, We are currently participating in waste disposal site cleanup activities under the federal Integrated Environmental Response, Compensation and Liability Act (“CERCLA”)
Or a state equivalent in 28 locations in the United States.
In addition, we have a similar responsibility at seven locations outside the United States.
In general, according to CERCLA, we and each other's PRP, which actually contribute harmful substances to the Superfund website, are jointly and severally liable for the costs associated with cleaning up the website.
Typically, PRPs will work with EPA to agree on and implement the on-site remediation plan.
Based on an analysis of our experience in such environmental proceedings, our estimated share of all hazardous materials deposited at locations mentioned in the previous paragraph, as well as our estimates of the contributions that other PRPs will make, we believe that these PRPs have the ability to pay for their shares, and we have made the best estimates of possible future costs associated with these known sites.
Potential insurance reimbursement is not included in determining accrued items.
There is no discount on accrual basis.
Due to the inherent uncertainty of environmental remediation and related regulatory processes, it is not feasible to predict when the accrued amount will be paid.
Nanjing Liuhe district procuratorate, Jiangsu province, China, accused the company of violating environmental laws related to waste disposal in Nanjing's nareco subsidiary, November 26, 2018 China
Prior to the allegations, the relevant allegations were made against certain individual employees of the subsidiary.
The case is under trial and is now seeking an assessment of the fine, which is currently being tried by the People's Court of Liuhe district.
The subsidiary may also be subject to separate civil penalties.
We do not anticipate that this matter will have a significant adverse effect on our consolidated operating results, financial position or cash flow.
We were also designated as defendants in litigation where our products did not cause harm, but the claimant wanted to monitor potential harm in the future.
We cannot predict with certainty the results of any such infringement claim, nor are we sure that we or our products may be involved in such matters in the future, and there is no guarantee that significant expenditure will not be required to find previously unknown conditions.
In these chemical exposure cases, our insurance company accepted the claim on our behalf (
With or without reservation)
Our financial risks should be limited to our deductible;
However, we cannot predict the number of claims that we may have to defend in the future, and we may not be able to continue to maintain such insurance.
In a number of lawsuits in which allegations were exposed to hazardous substances causing personal injury, we were also designated as defendants, including multiple
Litigation claiming personal injury related to our products and services.
While we do not believe that any of these proceedings, based on the current information, are important to us, there is no guarantee that these environmental issues will not be available, both personally and as a whole, significant adverse effects on our consolidated operating results, financial position or cash flow.
Our net global expenditure on remediation of pollution was approximately $3 million in 2018 and approximately $6 million in 2017.
As of December 31, 2018, our global accrued total for possible future remedial expenditures (excluding potential insurance reimbursement) was approximately $17 million.
We regularly review exposure to pollution remediation costs and adjust our accrued items as appropriate.
While the final resolution of these issues may result in costs falling below or above current accrued items, it will therefore have an impact on consolidated financial results for our future reporting periods, which we believe, the final resolution of these issues will not have a significant impact on our consolidated operating results, financial position or cash flow.
According to the Iranian threat reduction and the Syrian Human Rights Act of 2012, the Iranian threat reduction and the Syrian Human Rights Act of 2012 increased by 13 sections (r)
Under the Securities Trading Act of 1934, if the company or any of its affiliates intentionally engage in certain activities, the company must disclose in its periodic report, transactions or transactions related to Iran or entities or individuals designated under certain administrative orders.
Even if the activity is carried out outside the United States, disclosure is requiredS. by non-U. S.
Affiliates that comply with applicable law, even if these activities are not covered or prohibited in the United StatesS. law.
After the United States eased certain sanctions against Iran in January 2016 under a joint comprehensive action plan related to Iran's nuclear program (JCPOA)
And comply with the economic sanctions regulations administered by the United StatesS.
Foreign Asset Control Office of the Ministry of Finance (OFAC)and U. S.
Export control lawowned non-U. S.
Subsidiaries of companies operating in our energy operations have completed sales related to Iran in accordance with and in compliance with the terms and conditions of the OFAC general license H, including sales of products for process and water treatment applications (i)
Upstream oil and gas production and (ii)
Petrochemical plant.
The company reported these sales in its previous form 10 reportQ and Form 10-K.
On May 8, 2018, the president announced his decision to stop the United States participation in the joint programme of action and
After that, JCPOA lifted the sanctions and imposed sanctions relief.
At the same time as the announcement, the president issued a presidential memorandum on national security (NSPM)
Directing the Secretary of State and the Minister of Finance to immediately prepare for the resettlement of all United States countriesS.
Sanctions relating to JCPOA are lifted or waived and will be completed as soon as possible, and in no case later than 180 days from the date of the NSPM.
On June 27, 2018, the foreign assets control office revoked the general permit H and issued
Prior to November 4, 2018, under the general permit H. authorized general permit for the gradual end of activities involving IranOur non-U. S.
The subsidiary completed its business activities in a timely manner, and Irandown license.
2018 fiscal year, through the completion of wind power generation
In the next period, ourU. S.
The subsidiary completed the following sales related to the business of our energy operations division and sold them to one distributor in Dubai and two dealers in Iran: (i)
Upstream oil and gas production and (ii)
The petrochemical plant totaled $4. 7 million.
Pre-tax net profit associated with these sales is estimated at $0. 9 million.
In addition to the above, under the authorization of the Foreign Asset Control OfficeU. S.
The company's subsidiaries completed sales of products used in upstream oil and gas production related to the operation and production of Rhum gas fields on the Scottish coast for process and water treatment applications (Rhum)totaling $0.
6 million in the fiscal year of subsidiaries as at November 30, 2018, the total additional sales of such products amounted to $0.
1 million tasks were completed during December 2018.
Pre-tax net profit associated with these sales for each period is nominal profit.
Rhum was previously operated by BP Exploration Co. , Ltd (BP)
Iranian Oil Company (U. K. )Limited.
On November 30, 2018, BP completed the sale of ownership shares under the Rhum joint arrangement and handed over its operator role to Serica Energy plc. Our non-U. S.
The subsidiary intends to continue Rhum-
Related activities consistent with the specific licenses obtained by the client from OFAC, such activities may require additional disclosure in accordance with the above regulations.
Information available.
We submit annual, quarterly and current reports, agency statements and other information to SEC.
The SEC maintains a website that contains reports, agency and information statements, as well as other information related to the SEC electronic documents, including the company.