Praxair Sells, Processes Gases
— -- At Praxair, doing business is always a gas. The company produces and sells atmospheric gases (oxygen, nitrogen, argon, and others) as well as process and specialty gases (CO2, helium, and hydrogen) for the chemicals, food and beverage, semiconductor, and health care industries. Depending on a client company's gas needs, Praxair can build an on-site gas plant or provide gases by the cylinder. The company's Praxair Surface Technologies subsidiary supplies high-temperature and corrosion-resistant metallic, ceramic, and powder coatings mainly to the aircraft, plastics, and primary metals industries. Praxair's surface technologies segment also provides aircraft engine and airframe component overhaul services.
Though Praxair's gas business -- as with most manufacturing companies -- had been hurt by the economic slowdown, 2003 and 2004 marked a recovery for the company. Sales were up even discounting foreign currency translation. Higher volume and higher prices drove Praxair to record profit levels in successive years.
In the longer term, clean air and alternate fuel initiatives are offering opportunities for Praxair. The company is expanding its hydrogen operations along the Gulf Coast and has new hydrogen supply agreements with BP and Motiva.
In June 2004 subsidiary Praxair Healthcare Services agreed to buy Home Care Supply for $245 million. The Texas-based, privately held company provides respiratory and medical equipment from its 59 locations in 13 states. With Home Care Supply joining the company's existing operations, the combined Healthcare Services unit now has sales in the neighborhood of $750 million worldwide, just over 10% of Praxair's total annual sales. The combined unit provides services in 27 states from a dense concentration in the Northeast to the Mid-Atlantic all the way out to Texas. The home care market has become more important for Praxair as the company sees high growth potential in it (due to high returns and the low capital investments needed) and wants to be able to compete with rivals Air Liquide and Air Products.
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