Water Tower Hour Recap: Transformation and the Outlook for Growth in New Markets
CEO Bob Rasmus joined us on the Water Tower Hour podcast to talk about the recent transformation of the company through the merger of Advance Emissions Solutions (NASDAQ: ADES) and UK-based Arq and its strategic shift to producing higher-margin Granular Activated Carbon (GAC). Those interested can listen to the episode on Apple Podcasts, Spotify, or on our website. Today, Arq, Inc. is a diversified environmental technology company focused on developing and providing solutions for air, water, and soil purification. The company is a leading producer of Activated Carbon (~23% of North American market share), which is used for contaminant removal in various applications, including mercury removal from power plants, water purification, specialty gas cleaning, and soil and groundwater remediation. A focus on execution and cash flow. Rasmus highlighted his focus on improving the company’s foundational and cash generating Powered Activated Carbon (PAC) business through improved operations, better contracting terms, and penetrating new markets. At the same time, the company is using its PAC business as a springboard into the higher-growth and more profitable GAC markets. Capacity expansion into GAC opens new and fast-growing market opportunities. These include ground water remediation, specialty gas purification (such as renewable natural gas/biomethane), and addressing PFAS (aka forever chemicals), which were included in the April 2024 EPA regulations. The company is building out its GAC capacity at its existing Red River plant in Louisiana (commissioning expected in 4Q24) and has recently announced contracts with two new customers for 36% of the GAC nameplate capacity under construction. New CEO is aligned with shareholders. On the podcast, Rasmus made clear the company’s focus on shareholder returns, cost controls, and profitability. Further, he noted that he purchased 1 million shares upon joining the company and receives a cash salary of just $50,000, with the rest of his compensation in equity. Arq, Inc. formerly known as ADA and Advanced Emissions Solutions, has been at the forefront of providing cutting-edge products to control mercury and other contaminants for power generation and industrial companies since 1997. The January 2024 rebranding to Arq, Inc. (NASDAQ:ARQ) reflects a new focus on growth following the appointment of Bob Rasmus as CEO, the transformational acquisition of UK-based Arq, and the strategic expansion into the GAC markets.Advanced Emissions Solutions provides emissions reductions technologies through consumables that utilize powdered activated carbon (PAC) and chemical based technologies, primarily serving the coal-fired power generation and industrial boiler industries. The company's operations consisted of two reportable segments: refined coal, which engages in equity method investments as well as royalty related to reduced emissions of both nitrogen oxide and mercury from coal; and Power Generation and Industrials, which sells consumable products that utilize PAC and chemical technologies as well as historically the sale of activated carbon injection and dry sorbent injection equipment systems.
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