Recently, Airgas Carbonic - a subsidiary of diversified
) - inked a long-term agreement for the supply of liquid carbon
dioxide (CO2) from Fox River Valley Ethanol's plant in Oshkosh,
WI. The deal will improve Airgas's ability to supply liquid CO2.
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According to the agreement, Airgas will sell food and
beverage-grade liquid CO2 co-products from the plant. The plant
will have a capacity to produce 250 tons of liquid CO2 per day
and is expected to become operational in Oct 2013.
As ethanol plants are an important source of liquid CO2 in the
Midwest, the contract will enable Airgas to fulfill the food and
beverage needs and thereby satisfy industrial and bulk gas
customers in the region.
The new agreement marks an expansion of Airgas' liquid CO2
sources to Wisconsin, from Stanley and Jefferson. Notably, the
company is a leading supplier of liquid CO2 in the U.S. with a
total of eight production plants.
For fiscal 2014, Airgas revised its earnings guidance in the band
of $5.00 to $5.35 per share (reflecting 15% to 18% annual growth)
based on modest sequential improvement in daily sales volumes and
low to mid single-digit year-over-year organic sales growth
rates. Strong cash flow continues to be one of the strengths in
Airgas' business model.
Airgas is also optimistic about the long-term prospects of the
U.S. manufacturing and energy industries and non-residential
construction. It also expects a less challenging environment
Based in Pennsylvania, Airgas, through its subsidiaries,
distributes industrial, medical and specialty gases as well as
hardgoods in the U.S. The company also markets its products and
services through e-business, catalog and telesales channels.
Airgas currently carries a short-term Zacks Rank #3 (Hold).
Other chemical stocks that are worth a look include
Akzo Nobel NV
Eastman Chemical Co.
). All of them hold a Zacks Rank #2 (Buy).