Transformer oil recycler Hydrodec and its Ohio rerefinery were acquired by United Kingdom-based Slicker Recycling Ltd., which highlighted in its Nov. 19 announcement the opportunity to enter the North American market. The rerefinery was the last physical asset of Hydrodec, whose financial fortunes soured in recent years.
Slicker did not disclose the price of the acquisition in its Nov. 19 announcement.
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Hydrodec opened its transformer oil rerefinery in Canton, Ohio, in October 2008. It uses a proprietary catalyst to remove impurities and produce a rerefined product the company describes as hydrogenation-refined naphthenic mineral transformer oil. The rerefinery also treats used naphthenic oils. The facility was temporarily shut down after a December 2013 fire but was rebuilt and resumed operations in 2015. Although Hydrodec was considered United Kingdom-based as a corporate entity for most of its years in operation, Slicker’s announcement referred to Hydrodec as “Ohio-based.”
Mark Olpin, managing director for Slicker, noted that the rerefined transformer oil Hydrodec produces is essential to run electric grids and the carbon credits the process generates is a global first for this type of activity. “That’s a really exciting opportunity for us and not only does the acquisition allow us to enter the north American market for the first time, but it is a perfect fit in terms of our future plans and green credentials,” Olpin said in the company’s news release.
Hydrodec’s original 22,000-square foot plant in Canton was completed in 2008 for around $17 million and had capacity to recycle around 8 million gallons of transformer oil per year. It had opened its transformer oil rerefinery in Australia in 2006.
A major fire on Dec. 1, 2013 debilitated the Canton rerefinery’s processing unit and resulted in the facility’s shutdown for almost two years. Shortly after the incident, the Canton fire department told Lube Report that the incident resulted in approximately $12.5 million in physical damages, though a Hydrodec official at the time indicated physical damage was likely much higher. The company later confirmed receiving $18.8 million from its insurers.
In mid-2015, Hydrodec commissioned the rebuilt Canton plant and began operating two of six newly built production trains at the site. The company at the time said that once all six new lines were operating, it expected to be able to produce up to 40 million liters of transformer oil per year — around 10 million than before the December 2013 incident.
Hydrodec at the time touted the rebuilt plant’s additional operational and safety features, saying it would be safer and easier to maintain.
A team of 19 Hydrodec employees will join Slicker, which said it sees the acquisition as increasing its global footprint and buildings circular economy credentials after the opening last year of its joint venture rerefinery in Denmark. The company noted that Hydrodec has customers across the United States and global energy sector.
In mid-2018, Slicker and German rerefiner Avista Oil AG entered into a partnership to a build an API Group I base oil rerefinery in Denmark. In August 2020, their joint venture – Avista Green – announced the refinery was operational. The facility replaced an Avista rerefinery that halted production in July 2017 after a fire.
Hydrodec’s financial fortunes seemed on the upswing in 2017, when it posted its first positive full-year profits in the group’s history, with $450,000 in earnings before interest, tax, depreciation and amortization. That was a rebound from a nearly $1.3 million EBITDA loss for 2016.
However, Hydrodec’s financial struggles came to a head earlier this year. In April, AIM, the London Stock Exchange’s market for small and medium growth companies, issued a notice cancelling trading of Hydrodec’s shares because of its failure to meet a deadline for concluding a company audit. Trading of Hydrodec’s stock had been suspended since Oct. 1, 2020. Although Hydrodec confirmed in a March 2020 press release it had reached agreement on a $6.8 million refinancing package for its Ohio transformer oil rerefinery and assets, the company said it remained unable to conclude its audit for the 18-month period since June 2020. Factors cited including the ongoing impact of the pandemic and the company’s financial constraints.
In February this year, the company expressed optimism about signing an operating agreement for a proposed joint venture with a U.S. industrial recycling company. The JV was to use part of Hydrodec’s existing site in Canton to establish a facility for dismantling and recycling pole and pad-mount electrical transformers. The JV would have transferred all used transformer oil extracted at the facility to Hydrodec of North America at no cost, and the JV partner would have provided all the used oil it secures outside of the JV’s activities to Hydrodec of North America at no cost.
Hydrodec’s announced plans for rerefineries over the years that didn’t pan out included a joint venture project in Australia, a proposed rerefinery in the U.K. and a pilot plant in the U.K. that would have used the company’s technology to rerefine paraffinic base stocks.