Specialty chemical company
Air Products & Chemicals Inc.
) announced that it has entered into a long-term deal with Shanxi
Lu'An Mining (Group) Co., Ltd. wherein the former will build, own
and operate four air separation units (ASUs) producing oxygen,
nitrogen, compressed instrument air and steam. The units will
supply Lu'An's multiple process trains at its coal gasification
facility to be built in Changzhi City, Shanxi Province,
The coals supplied to the liquid projects at Lu'An's Changzhi
City facility will produce diesel fuel and derivatives. The aim
of the ASU trains is to minimize operating costs through energy
efficiency. The facility, which is ranked eighth in the Chinese
coal industry, will include a number of ASU trains and produce
12,000 tons per day (TPD) of oxygen as well as significant
tonnage volumes of nitrogen and compressed dry air for a coal
chemical plant. The facility is expected to come online in
It is the second-largest ASU onsite order ever awarded to Air
Products for a single project. All the combined four units will
produce over 10,000 TPD of oxygen, more than 6,000 TPD of
nitrogen, and over 700 TPD of instrument air. The first ASU is
expected to become operational by Jul 2015 with the final one
scheduled in Oct 2015.
The contract is consistent with Air Products' strategy to win
large ASU projects in the high growth China coal gasification
market as China has significant coal reserves to produce syngas
from the coal and then convert the syngas into fuel, chemicals,
Air Products benefits from a diverse customer base, sustained
pricing power and cost-reduction measure. Few days ago, Air
Product came out with its first-quarter fiscal 2013 (ended Dec
31, 2012) results. The results were impressive as both revenues
and adjusted earnings outpaced the Zacks Consensus Estimates. The
company's adjusted earnings from continued operations of $1.30 a
share beat the Zacks Consensus Estimate by a penny. Consolidated
net income from continuing operation increased 22.6% year over
year to $276.9 million.
Revenues rose 10.4% year over year to $2,562.4 million,
beating the Zacks Consensus Estimate of $2,471 million. Sales
were aided by higher volumes in the Tonnage Gases, Equipment and
Energy divisions and acquisitions.
For fiscal 2013, Air Products plans to take a number of steps
including cost control measures, restructuring actions, price
improvements and volume growth. The company expects that its
recent strategic moves will position it for future growth and
profitability despite the modest economic backdrop.
Air Products retains a short-term (1 to 3 months) Zacks Rank
#2 (Buy). Other companies in the chemical industry worth
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). All these companies retain a Zacks Rank #1 (Strong Buy).
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