Air Products and Chemicals Profile
Air Products and Chemicals, Inc. operates as an industrial gases company.
The company has a sustainability-driven two-pillar growth strategy consisting of the expansion and efficient operation of its core industrial gases business and the execution of projects that provide world-scale clean hydrogen.
The company's industrial gases business provides essential gases, related equipment, and applications expertise to customers in dozens of industries, including refining, chemicals, metals, electronics, manufacturing, medical, and food. The company also develops, engineers, builds, owns, and operates some of the world's largest clean hydrogen projects that will support the transition to low- and zero-carbon energy in the heavy-duty transportation and industrial sectors. Additionally, the company is the world leader in the supply of liquefied natural gas (LNG) process technology and equipment and provides turbomachinery, membrane systems, and cryogenic containers globally.
Segments
The company operates through five segments: Americas; Asia; Europe; Middle East and India; and Corporate and Other.
Industrial Gases Business
The company's industrial gases business, which is organized and operated regionally in the Americas, Asia, Europe, and Middle East and India segments, produces and sells atmospheric gases, such as oxygen, nitrogen, and argon; process gases, such as hydrogen, helium, carbon dioxide (CO2), carbon monoxide, and syngas (a mixture of hydrogen and carbon monoxide); and specialty gases. Overall regional industrial gases sales constituted over 90% of consolidated sales for the year ended 30 September 2023, approximately half of which were attributable to atmospheric gases. Each of the regional industrial gases segments competes against three global industrial gas companies: Air Liquide S.A., Linde plc, and Messer Group GmbH, as well as regional competitors.
The company is also investing in projects that are intended to create a reliable and consistent world-scale source of low-carbon hydrogen produced from hydrocarbons with carbon capture (known as blue hydrogen), as well as carbon-free hydrogen produced from renewable energy (known as green hydrogen).
The company obtains helium from several sources globally, including crude helium for purification from the U.S. Bureau of Land Management's helium reserve.
The company distribute gases to its industrial gas customers through different supply modes depending on various factors, including the customer's volume requirements and location. The company's supply modes are as follows:
On-Site Gases-Supply mode associated with customers, principally in the energy production and refining, chemical, metals, and electronics industries worldwide, that require large volumes of gases and have relatively constant demand. Gases are produced and supplied by large facilities the company constructs or acquires on or near the customers' facilities or by pipeline systems from centrally located production facilities. These sale of gas contracts are generally governed by 15- to 20-year contracts. The company also delivers smaller quantities of product through small on-site plants (cryogenic or non-cryogenic generators), typically via a 10- to 15-year sale of gas contract. The contracts within this supply mode generally contain fixed monthly charges and/or minimum purchase requirements with price escalation provisions that are typically based on external indices. The company's on-site supply mode generates approximately half its total company sales.
Merchant Gases-Supply mode for liquid bulk and packaged gas products. Liquid bulk product is delivered in bulk in either liquid or gaseous form by tanker or tube trailer and stored, usually in its liquid state, in equipment that the company typically designs and installs at the customer's site for vaporizing into a gaseous state as needed. Liquid bulk sales are usually governed by three- to five-year contracts. Packaged gas products are delivered in small quantities in either cylinders or dewars. The company operates packaged gas businesses in Europe, Asia, and Latin America.
The company has hydrogen fueling stations that support commercial markets, as well as demonstration projects across the globe.
Industrial Gases Equipment
The company designs and manufactures equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction, and liquid helium and liquid hydrogen transport and storage. The Corporate and Other segment includes activity related to the sale of cryogenic and gas processing equipment for air separation. The equipment is sold worldwide to customers in a variety of industries, including chemical and petrochemical manufacturing, oil and gas recovery and processing, and steel and primary metals processing. The Corporate and Other segment also includes the results of the company's LNG equipment business, its Gardner Cryogenics business, which fabricates helium and hydrogen transport and storage containers, and its Rotoflow business, which manufactures turboexpanders and other precision rotating equipment.
International Operations
Through its subsidiaries, affiliates, and joint ventures accounted for using the equity method, the company conducts business in approximately 50 countries and regions outside the United States. The company has controlling interests in foreign subsidiaries that operate in Canada and approximately 10 countries in Latin America (primarily Chile and Brazil); approximately 10 countries and regions in Asia (primarily China, South Korea, and Taiwan); approximately 25 countries in the Europe and Africa region (primarily the Netherlands, the countries of the United Kingdom, and Spain); and approximately five countries in the Middle East, primarily Saudi Arabia. The company also owns non-controlling interests in entities operating in Africa, Asia, Europe, Latin America, and the Middle East.
Patents
For the year ended 30 September 2023, the company owned approximately 625 United States patents, approximately 3,300 foreign patents, and was a licensee under certain patents owned by others.
Properties
Americas
This segment operates from approximately 450 production and distribution facilities in North and South America. Of these facilities, approximately 25% are located on owned property. The company has sufficient property rights and permits for the ongoing operation of its pipeline systems in the Gulf Coast, California, and Arizona in the United States and Alberta and Ontario in Canada.
Asia
This segment operates from approximately 300 production and distribution facilities within the region, of which approximately 35% are on owned property or long-duration term grants. The company has sufficient property rights and permits for the ongoing operation of its pipeline systems in China, South Korea, Taiwan, Malaysia, Singapore, and Indonesia.
Europe
This segment operates from approximately 210 production and distribution facilities in Europe, of which approximately 35% are on owned property. The company has sufficient property rights and permits for the ongoing operation of its pipeline systems in the Netherlands, the United Kingdom, Belgium, France, and Germany.
Middle East and India
This segment operates from approximately 15 production and distribution facilities throughout the region, all of which are leasehold properties.
Corporate and Other
This segment includes the company's sale of equipment businesses for which equipment is manufactured in Missouri in the United States and Shanghai, China. The LNG business operates a manufacturing facility in Florida in the United States with management, engineering, and sales support based in the Allentown offices. The Gardner Cryogenic business operates at facilities in Pennsylvania and Kansas in the United States. The Rotoflow business operates manufacturing and service facilities in Texas and Pennsylvania in the United States.
Research and Development
For the year ended September 30, 2023, the company's research and development expenses were $105.6 million.
Environmental Regulation
In the normal course of business, the company is involved in legal proceedings under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, the federal Superfund law); Resource Conservation and Recovery Act (RCRA); and similar state and foreign environmental laws relating to the designation of certain sites for investigation or remediation.
History
Air Products and Chemicals, Inc., a Delaware corporation, was founded in 1940. The company was incorporated in 1961.
