PX's Brazilian Unit Signs Contract - Analyst Blog
July 15 2011 - 7:00AM
Zacks
Praxair Inc. (PX)
is in constant effort to expand its operations in the existing
operating areas and new regions by adding new customers. The
company’s Brazilian arm, White Martin, recently signed a gas supply
contract with Braskem, the largest petrochemical company in the
Americas and the world’s largest biopolymers producer.
The 15-year agreement requires
White Martin to supply nitrogen and oxygen to Braskem’s expanded
polyvinyl chloride (PVC) unit in the state of Alagoas, in Brazil’s
northeast region. The company will construct a new cryogenic
on-site air separation plant with a daily capacity of 200 tons.
The project with an estimated value
of R$1 billion (US$635 million) is Braskem’s single largest
investment in Brazil. Operations at the new industrial unit are
likely to start by the first half of 2012.
Earlier in July 2011, Praxair’s
Chinese unit signed a contract with the Shandong Guangfu Group Co.,
leading a steel and iron enterprise in Shandong province, North
China. The company will provide its proprietary oxy-fuel technology
and will install its gas injection system at the 100-ton electric
arc furnace of the steel mill of Shandong Guangfu Group.
We believe Praxair’s expansionary
efforts will be profitable for the company in the long term and
enable it to achieve its long-term goals. Annual organic sales
growth target is set at 8%-12%, with emerging markets, including
South America, Asia, and Mexico, with an estimated target of 45% of
total sales by 2015.
The company is slated to release
its second quarter financial results on July 27, 2011. Zacks
Consensus Estimate for the second quarter is $1.37, representing a
year- over-year increase of 15.44%. Estimate for the fiscal year
2011 and 2012 is $5.47 and $6.26, respectively.
Praxair faces stiff competition
from Air Products and Chemicals Inc.(APD) and
Airgas Inc. (ARG). We currently maintain a Neutral
recommendation on Praxair.
AIR PRODS & CHE (APD): Free Stock Analysis Report
AIRGAS INC (ARG): Free Stock Analysis Report
PRAXAIR INC (PX): Free Stock Analysis Report
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