Leading industrial-gas company Air Products and Chemicals Inc. (APD) recently forged a joint research and development (R&D) pact with South China University of Technology (“SCUT”) on water purification technology to expedite the development of sustainable and innovative water treatment solutions. Such solutions will be aimed at helping customers in China to meet the growing energy efficiency and environmental improvement targets.
SCUT is a major university of science and engineering in China operating under the direct leadership of the Ministry of Education of China. The entity’s School of Environmental Science and Engineering owns a number of patents in water treatment technologies and is among the leading research institutes focusing on pollution control and environmental protection.
The partnership between Air Products and the water research group of SCUT will focus on the development of a flexible and effective bioreactor by combining ozone reaction and biological aerated filter technologies. The technologies and solutions developed through the collaboration will be used across a range of water and wastewater treatment areas.
Air Products offers industrial gases as well as a variety of polymer and performance chemicals and serves technology, energy, industrial and health care customers globally. The company competes with Praxair Inc. (PX) among others.
Air Products has been a supplier to the water and wastewater industries for more than three decades. Its novel technology solutions, including the ozone vent gas reuse application and the new Halia mixer aeration system, have been designed to help customers improve water treatment processes.
Air Products became the first industrial gas company to set up an internal R&D capability in China with the launch of its Asia Technology Center back in 2005. It has been actively collaborating with the leading universities and design institutes in China to accelerate the development of advanced technologies to support the energy efficiency and environmental improvement goals under the country’s 12th “Five Year Plan”.
Air Products benefits from a long-term take-or-pay contract, a consolidated industry structure, diverse customer base and sustained pricing power. However, soaring energy and raw material costs pose a threat to margin expansion. To compensate for escalating raw material costs, Air Products has been increasing the price for a range of chemicals it makes for industrial use.
We are currently Neutral on the stock, which is in line with a short-term Zacks #3 Rank (Hold).
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