Air Liquide’s Focus On Growth Drivers Pays Off

Sept. 8, 2009
New contracts related to production of photovoltaics and added business in the healthcare market helped this CP 50 company's bottom line.

While Air Liquide noted first-half financials for 2009 didn't match 2008, the Paris-based company still posted solid revenue at €5.9 billion (US$8.6 billion). Part of its strength comes from new contracts related to production of photovoltaics (PV). In addition, added business in the healthcare market helped.

Group revenue for the first half of 2009 dropped by 6.8%, half of which is attributable to the decline in natural gas prices, according to the company. Activity improved in May and June, and several localized signs of recovery in the emerging economies and in the chemicals sector in the United States became apparent. Second quarter sales, adjusted for natural gas and currency, are up by about 1% compared to those of the first quarter.

“The performance of the first half of 2009 is in line with our expectations, in terms of efficiency, cash generation and level of indebtedness," explains Benoît Potier, chairman and CEO of the Air Liquide Group. "It confirms Air Liquide’s resilience in a context of slow demand. The Group remains confident in the robustness of its growth model thanks to the structural potential of its five growth drivers which are Energy, Environment, Emerging Economies, Health and High-Tech. Air Liquide will continue to invest in them to strengthen its strategic positioning.”

Indeed, in the high-tech arena Air Liquide recently became the main supplier to the three largest PV production sites worldwide.

According to the company, PV manufacturers will continue to invest in new capacity to cope with the next phase of demand growth, expected during 2010.

In this context, Air Liquide signed several new contracts since January 2009 with solar cell manufacturers in five countries and will invest globally €13 million (US$18.9 million) to meet the needs of those customers.

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In Singapore, Air Liquide will supply all carrier and specialty gases as well as on-site services to REC’s new gigawatt wafer and solar cells production campus. This project is the largest PV investment underway in South-East Asia, with a planned combined production of 1,500-MW/yr. REC is a supplier of Si materials to the PV industry with planned Poly-Si and Si wafers global capacity of more than 20,000 tons per year and 2,000MW per year respectively.

In other industrial gas news, Air Liquide recently completed the acquisition of Saudi Arabia-based Al Khafrah Industrial Gases.

The industrial and medical gas market in Saudi Arabia presents an attractive growth potential for Air Liquide, with double-digit growth in 2008, driven by the expansion of the petrochemical industry and the development of infrastructure projects.

The newly incorporated company will be named Air Liquide Al Khafrah Industrial Gases. With more than $20 million of sales in 2008 and around 100 employees, the company’s main business activities include manufacturing and sale of packaged gases (oxygen, nitrogen, argon, acetylene, etc) and bulk air gases.

“This acquisition will strengthen our position in the Middle East and allows us to get swift access to one of the most dynamic industrial gas markets in the region," says Pierre Dufour, senior executive vice-president of the Air Liquide Group. "This acquisition is aligned with the Group’s program of targeted investments, notably in the Emerging Economies.”

Air Liquide also confirms its ambitions in the healthcare market by increasing its presence in the United Kingdom by being selected by the National Health Service to serve 10,000 patients.

Air Liquide, which was already a supplier of medical hygiene products in the British market, entered the British homecare and medical gases markets in 2007, with the acquisition of Linde UK and Allied Respiratory.

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