Air Products and Chemicals Inc. (NYSE:APD) said that its new site in the Xi'an High-tech Zone (“XHTZ”), Shaanxi Province, China, has become fully operational for supplying bulk gases to Samsung Electronics (KS:005930) advanced semiconductor fabs. This is one of Samsung’s largest overseas investments.
This contract is one of the breakthrough achievements for Air Products in China as well as the electronics industry. The site covers an area of 55,000 square meters and provides two large air separation units, and a hydrogen plant to supply highly pure nitrogen and other bulk gases like oxygen, argon, hydrogen, helium and compressed dry air to Samsung Electronics' Fab One. The facility also features the leading expertise of Air Products along with reliability, safety and operational excellence.
Air Products had received a major contract from Samsung to supply complete bulk-specialty gas and chemical-delivery systems to the latter’s memory fabs in XHTZ in 2012. The recent contract will also support Air Products’ business growth and development in western China.
Air Products reported fourth-quarter fiscal 2014 (ended Sep 30, 2014) results last month with adjusted earnings from continued operations, up roughly 13% from the year-ago quarter figure. Revenues rose 3% year over year to around $2,677 million, driven by higher volumes. Sales rose on 1% improved pricing and a 3% increase in volumes, mainly in the Electronics and Performance Materials, and Merchant Gases units.
Air Products strives to restructure the company, reduce costs and improve cash flow amid an uncertain global economic backdrop. It should benefit from a diverse customer base, sustained pricing power and cost-reduction measures.
Air Products currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader basic materials sector worth considering include LYXOR EuroMTS Global Invest Grade (XETRA:MTX), Fibria Celulose SA and Limoneira Company . While Minerals Technologies sports a Zacks Rank #1 (Strong Buy), both Fibria Celulose and Limoneira hold a Zacks Rank #2 (Buy).