To address the growing demand for its industry-leading liquefied
natural gas (LNG) technology and equipment,
Air Products and Chemicals Inc.
(
APD
) recently revealed its plans to build a new manufacturing facility
in Manatee County, Florida. The industrial gas company said
that the new facility, which will expand its LNG manufacturing
capacity, will meet the demand for its large LNG heat exchangers.
The facility will be constructed at a deepwater port location with
the flexibility to manufacture large LNG equipment without any
shipping constraints. The 300,000 square foot manufacturing
facility is expected to come on line late 2013 and will employ
roughly 250 people over a four-year period.
Air Products' proprietary LNG technology, which is available across
15 nations globally, processes and cryogenically liquefies natural
gas for consumer and industrial application. This innovative
technology has been designed to address the growing energy needs
across the globe.
Air Products provides process technology and key equipment to the
LNG industry for natural gas liquefaction process as well as small
and middle-level LNG facilities. The LNG technology is gaining
importance as it meets the increasing global need for cleaner
energy.
Most of the LNG manufactured globally leverages Air Products'
technology. The company has shipped its LNG heat exchangers to
remote places, including locations in Indonesia, Algeria, Nigeria,
Peru, Malaysia, Egypt, Oman, Yemen and Qatar.
Air Products recently shipped the 100th LNG heat exchanger made at
its Wilkes-Barre facility in Pennsylvania. Some of the heat
exchangers manufactured at this plant are as large as 16.5 feet in
diameter, 180 feet long and weigh as much as 500 tons.
Air Products benefits from a long-term take-or-pay contract, a
consolidated industry structure, diverse customer base and
sustained pricing power. The company's healthy project backlog and
solid bidding activity strongly position it to achieve its
long-term growth target. However, soaring energy and raw material
costs pose a threat to margin expansion.
We currently have a long-term Neutral recommendation on Air
Products. The company, which competes with
Praxair Inc.
(
PX
), holds a short-term Zacks #3 Rank (Hold).
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