APD Air Products and Chemicals Inc

On April 12, 2011, Air Products & Chemical Inc. (APD) intends to launch a new-generation wave soldering technology for the electronics assembly and packaging industry at the IPC APEX Expo in Las Vegas.

The Inert Wave Soldering technology is said to reduce manufacturing and material costs, including nitrogen flow rates, significantly increasing soldering joint quality and enable lead free (Pb-free) soldering. It reportedly reduces key defects by 90% and dross formation by 96% in production.

More than 50 units with Air Products' proprietary technology are currently installed at leading electronics assembly companies worldwide.

Yesterday, the company also launched its new product, Deposilk Q1 Polymer at In Cosmetics in Milan, Italy. Deposilk Q1 Polymer is a new offering that empowers formulations through superior deposition of ingredients with excellent sensory aesthetics.

Based in Pennsylvania, Air Products is benefiting from a long-term take-or-pay contract, a consolidated industry structure, a diverse customer base and sustained pricing power.

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 for a range of chemicals it produces for industrial use.

About two weeks ago, the company announced a hike in price for its Tomamine surfactant, TomadryT surfactant and TomadyneT surfactant by 5 cents per pound. It also announced a price increase for Tomadol surfactant, Nonidet surfactant and Nonatell surfactant by 4 cents per pound. The price increases will be effective from the first week of April 2011.

Air Products, on one hand, is bogged down in debt. On the other hand, the company expects to continue raising debt in an effort to fund new projects and refinance maturing debt.

Air Products faces stiff competition from Praxair Inc. (PX) and The Linde Group.

Currently, Air Products has a short-term (1 to 3 months) Zacks #3 Rank (Hold) and a long-term (6+ months) Neutral recommendation.

 
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