(APD) Air Products & Chemicals Launches New Mill

Air Products & Chemicals Inc. (APD) intends to launch its new PolarFit ultra-fine-grinding mill at PTX Canada in Toronto starting from June 21 to June 23. The new PolarFit ultra-fine-grinding mill offers advance technology while providing a cost-effective way to reduce hard-to-grind materials to smaller particle sizes that can be achieved with conventional impact mills.

The new grinding system can produce consistent yields of particles between 45 and 250 microns and in some cases as small as 10 microns, to best suit the individual customer needs. The new mill eliminates the need for Air Products ultra-fine-grinding mill, which uses a combination of size reduction mechanisms, including impact, attrition and particle-particle collision, to achieve much smaller particle sizes than other mills.

Through its efficient use, Air Products mill can improve product quality resulting from minimal or no heat damage; reduce waste and recycling and lower production costs.

The mill is ideal for cryogenic size reduction of a wide range of materials, including pigments, plastics, powder coatings, thermoplastic elastomers, waxes, pharmaceuticals, nutraceuticals, spices and other food products.

Based in Pennsylvania, Air Products benefits from a long-term take-or-pay contract, a consolidated industry structure, a diverse customer base and sustained pricing power. Air Products’ aggressive cost cutting and productivity initiatives, combined with its portfolio realignment efforts, have helped to mitigate fixed cost headwinds, which is very encouraging.

However, soaring energy and raw material costs pose a threat to margin expansion. In order to compensate for escalating raw material costs, Air Products has been increasing the price of a range of chemicals it manufactures for industrial use.

In April 2011, the company reported second-quarter fiscal 2011 EPS of $1.39 versus $1.16 in the year-earlier quarter and matched the Zacks Consensus Estimate of $1.39. The results included an after-tax cost of $4 million or 2 cents per share, excluding which the adjusted EPS amounted to $1.41 versus $1.23 in the year-ago quarter.

Net sales amounted to $2.5 billion versus $2.2 billion in the prior-year quarter, moving ahead of the Zacks Consensus Estimate of $2.4 billion. The improved results were mainly driven by higher volumes in the Electronics and Performance Materials, Merchant Gases and Tonnage Gases segments.

Air Products faces stiff competition from Praxair Inc. (PX).

Currently, Air Products has a short-term (1 to 3 months) Zacks #2 Rank (Buy) but a long- term Neutral recommendation.

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