Companies providing lab-testing and associated services form an important segment of analytical instrument demand. Such firms advance analytical developments and work with private and public entities to implement testing requirements and conduct R&D. IBO spoke with three testing firms to gain insight into current demand and the trends affecting their businesses.

A provider of inspections, testing, audit and certification services, Bureau Veritas reported €3,933.1 million ($5,244.1 million = €0.75 = $1) in revenue last year from its eight business segments. Among the highlights was the company’s Oil & Petrochemicals business, part of its Commodities segment. Oil & Petrochemicals revenue jumped 14.4% in 2013 to make up 40% of Commodities revenue, or $266 million. In the first quarter, Oil & Petrochemicals revenue grew 11.1% organically. The business supplies both inspection and lab-testing services, specializing in the testing during custody transfer of marine cargo and in oil testing.

Asked about the most popular Oil & Petrochemicals lab services that Bureau Veritas offers, Neil Hopkins, executive vice president, Commodities, Bureau Veritas, told IBO, “Globally, the majority of our laboratory analytical services are undertaken on traded petroleum products, and we are presently seeing an increased demand for the testing of gasoline, fuel oil and middles distillates, such as diesel and jet fuel.” He added, “Within our flagship North American business, we are seeing increased demand for testing related to shale gas and liquid production.”

Driving testing growth is GDP growth, which furthers demand for petroleum products and thus testing, according to Mr. Hopkins. Trade is another factor. “The second key driver for us is the changing nature of trade flows between the continents. This manifests itself in two different ways,” he explained. “Firstly, for example, thanks to the development of unconventional reserves of oil and gas, the USA now imports less crude oil and products than it did five years ago. Our US business has thus grown as a result of the requirement for testing in locations, such as Eagle Ford, a requirement that did not exist a few years previously.” Greater trading volumes has increased the need for testing. “Secondly, as the volume of traded products shipped from one market to another increases, there is an increased requirement for the testing of the products because the products are optimized to meet specifications that differ from country to country.”

Bureau Veritas continues to grow its Oil & Petrochemicals testing business via acquisitions. Earlier this year, it purchased Maxxam Analytics for CAD 650 million ($631 million = CAD 1.03 = $1). Maxxam provides testing services for petroleum, environmental, food and DNA/forensics applications, with more than 50 facilities and 2,500 employees. Maxxam had estimated fiscal 2014 revenues of CAD 269 million ($256 million = CAD 1.05 = $1). Petroleum services accounted for 28% of Maxxam’s 2013 revenues of CAD 246 million ($239 million = CAD 1.03 = $1). “Maxxam provides Bureau Veritas with a complete suite of complementary services, such as oil-sands core processing and hydrocarbon fingerprinting,” noted Mr. Hopkins. This follows last year’s purchase acquisition of OTI Canada, which provides petroleum testing and inspection services and had €3.4 million ($4.5 million) in fiscal 2013 revenues.

Serving the fast-growing market for food testing worldwide is Silliker, a unit of Mérieux NutriSciences. Mérieux NutriSciences operates more than 70 labs in 18 countries. Headquartered in the US, Silliker provides lab testing and services for food processors, retailers and distributors. “As part of Mérieux NutriSciences, an international company committed to improving global public health, Silliker supports the food industry with laboratory, auditing, consulting, research and training services throughout the food chain,” said Jim Miller, president of Silliker, North America.

The company’s testing services include chemical analysis. “Our core chemistry services comprise nutrition and contaminant-testing services. In nutrition, this generally includes vitamins, minerals, fat, protein, carbohydrates, sugars, dietary fibers, as well as nutrition-label development,” said Mr. Miller. “In addition, we perform shelf-life studies to determine product quality over time, especially in new-product development.”

Asked about trends affecting Silliker’s Chemistry business, Mr. Miller highlighted food safety and consumer trust. “The underlying trends have been there but continue to come to the forefront: the globalization of the food supply chain, heightened consumer concerns and media attention regarding chemical contaminants, new legislation and enforcement measures by regulatory agencies.” Among the legislation affecting testing is the US Food Safety Modernization Act (FSMA) (see IBO 12/31/10). “The FSMA represents the most significant change in US food safety law in over six decades. Moreover, the FDA is also in the midst of imposing sweeping regulations to revise the nutrition-facts labeling to help consumers make more informed food choices,” he explained. “These actions will significantly impact the food industry in one way or another, whether through contaminant-monitoring surveillance of imports, enhanced allergen programs or other chemical-testing programs.”

Developments in instrumentation and analytical methods are also influencing the market. “Food chemical-testing technology continues to advance as the need for higher sensitivities and lower detection limits arise,” said Mr. Miller. “To improve the quality of surveillance demanded by our customers, Silliker has adopted or developed a number of multiresidue screening methods, allowing several analytes to be detected simultaneously. While multiresidue methods cannot always be used, they represent an important advancement in ensuring food safety.” Technical development is continuous. “In the pursuit of faster, more reliable results, continuous improvements in detection methods are ongoing,” he said. “For example, we are continuously exploring better extraction methods and implementing automation where possible to handle higher sample volumes and improve turnaround time.”

This spring, Silliker joined the USDA Agricultural Marketing Service’s Laboratory Approval Program for Beta Agonists (Ractopamine). Ractopamine is fed to livestock to accelerate lean-muscle growth. Some countries have banned imports of meat containing ractopamine residue. Last year, China began requiring third-party verification that US pork imports did not contain ractopamine. “The USDA introduced a certification program allowing the meat industry to market their products with a ‘Never Fed Beta Agonist’ claim. Silliker was the first third-party laboratory to receive USDA verification approval for our beta-agonist method, which includes detection of ractopamine,” said Mr. Miller. An LC/MS/MS method for ractopamine in animal tissue and fat used by Silliker’s lab in British Columbia, Canada, is approved by the USDA Agricultural Marketing Service.

US-based Evans Analytical Group (EAG) provides lab-testing and associated services, such as litigation support, in the areas of materials-characterization, microelectronics and agrochemicals. The materials-characterization business employs a wide range of analytical techniques. As Ian A. Mowat, PhD, director of Sales and Customer Service for EAG, told IBO, “Our largest groups and hence the most popular are techniques where we absolutely provide something unique, due to our years of experience, that can’t really be matched when you only have a single instrument. SIMS (secondary ion MS) and GDMS (glow-discharge MS) fit into that category.” The company has provided SIMS testing since it was founded in 1978. “Electron microscopy, covering SEM, TEM, STEM and dual-beam FIB (focused ion beam) imaging is also one of our largest groups. We also have a large group that deals with project-based work that uses a range of expertise in organic and inorganic materials, including metallurgy.”

Discussing trends affecting the business, Dr. Mowat noted companies’ need to shorten the time from development cycles to experimental iterations, particularly in the case of technology start-ups, which can be achieved by outsourcing analyses. In addition, the need for lower detection limits due to cleanliness requirements and materials regulation are fueling growth. “Decreasing device dimension and thinner films in semiconductor manufacturing drives the need for greater cleanliness and better assessment of contaminant levels,” he said.

Describing EAG’s materials-analysis services for the semiconductor industry, Dr. Mowat said, “Our semiconductor work falls into a few distinct categories: (1) supporting companies who are doing R&D, such as semiconductor equipment companies or materials/chemical suppliers; (2) supporting companies who are troubleshooting or doing failure analysis, typically chip/device manufacturers; and (3) supporting production and monitoring processes.” Multiple types of analyses are available, and EAG’s services span the supply chain from supplies to end-users. “Most of the services we provide focus on telling the customer some (or all) of the following: What is my material? How pure/clean/contaminated is it? What is the structure of my material? What are the defects in my material? What are the dimensions of my sample or the defects/particles on it?,” he said.

The growing accessibility of analytical instruments, in part due to software improvements, has increased the desire for both more and improved data, according to Dr. Mowat. “If they can’t get the instrument or measurement in-house, then that becomes a driver for external labs like EAG to provide new services.” Asked about developments in analytical techniques specifically for semiconductor materials characterization, he said, “We see a lot of activity in the field of chips for mobile devices, both for data processing and data transmission.” He also noted activity in the areas of energy storage, energy generation, and displays and lighting. “These areas often use new materials, away from traditional silicon and inorganic materials, so we have to be able to come up with analytical approaches that work for materials that may be fragile, air sensitive or otherwise more difficult to analyze.” He also cited organic electronics as another area of growth.