The Challenge: An industrial gas reclaimer needed to evaluate its approach to reclaiming an ozone depleting gas from old fire protection systems and re-selling it to manufacturers who use it for critical needs.

Assessment: We learned that this gas has a fixed supply, production is no longer allowed, and with increasing demand there is an opportunity to be more aggressive with price. Further, since it is becoming more scarce, being able to take possession of the gas is extremely important toward becoming a trusted supplier to key customers.

Strategic Solution: Blue Canyon proposed a new business model that would: push the client to build a significant inventory/bank of the gas over 3 years; use this leverage and scarcity created from stockpiling inventory to help push reclaimed gas prices higher to generate more profit; aggressively acquire more gas through additional resources and being willing to pay more for gas that needs to be reclaimed; and, create supplier programs for total solutions in order to increase incentives for top suppliers to provide the client more gas to be reclaimed.

Results: The client is expected to implement this plan in stepwise fashion, acquiring gas more aggressively and building inventory for the first year to assess the results, and then decide whether to continue thereafter. Blue Canyon estimates that this business model approach will increase enterprise value by ~$20 million due to increased prices and stronger customer and supplier relationships.