Air Products Advances Fueling & Biogas Technology in Japan

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As part of a consortium, Air ProductsAPD took part in the inaugural ceremony of the Shikaoi Hydrogen Farm on Jan 24. The farm is a hydrogen production supply facility derived from livestock biomass waste, located in Hokkaido, Japan. Air Products provided its hydrogen fueling technology to develop the retail automotive fueling infrastructure in Japan. Also, the company's proprietary membrane technology will aid the biogas purification process.

The Shikaoi Hydrogen Farm uses agricultural wastes to supply raw biogas. This product is further upgraded to supply purified biomethane using Air Products' PRISM PB Membrane separators. Biomethane is used as a feedstock to make renewable hydrogen which generates heat, power and vehicle fuel. This is the first facility in Japan to use agricultural wastes to manufacture hydrogen.

The Shikaoi Hydrogen Farm is a five-year business project for low-carbon hydrogen technology. The project demonstrates an integrated hydrogen energy-based supply chain. Renewable hydrogen is used as a source of energy and fuel by the local livestock farmers and neighboring facilities. Hokkaido's first hydrogen-vehicle fueling station, installed at the Farm, delivers fuel to vehicles and forklifts.

Air Products' SmartFuel stations provide hydrogen fueling at 35 Mpa (5,000 psi) and 70 Mpa (10,000 psi) in compliance with Japan Petroleum Energy Center (JPEC) S0003. The use of Air Products' fueling technology is increasing and the company is involved in over 200 hydrogen fueling projects in the U.S. and 20 countries globally.

Air Products has outperformed the Zacks categorized Chemicals-Diversified industry in the past three months. While the company's shares gained 10.6%, the industry recorded a gain of 9.8% over the same time frame. The company continues to have a strong project backlog which is expected to deliver volume, revenue and earnings growth over the next few years.

Air Products, which is among the prominent chemical companies along with Dow Chemical DOW , DuPont DD and Eastman Chemical EMN , is well positioned to capitalize on the cyclical recovery in its core industrial end-markets. Acquisitions and new business deals are expected to continue drive growth.

The spin-off of Electronic Materials Division (EMD) and the sale of Performance Materials Division (PMD), both non-core businesses, will also allow the company to direct resources to grow its core and stable industrial gases business. Air Products is also likely to undertake headcount reduction, keeping a tight control on SG&A expenses and undertaking work process improvement initiatives. The company is on track with its $600 million cost-cutting program and has already achieved the first $300 million of cost savings.

However, Air Products' industrial gases business in the EMEA region is facing pressure from a weak operating environment. The company is also seeing lower volumes in Latin America due to weak demand. Moreover, the company has a debt-laden balance sheet.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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