Praxair Inc.’s (PX) subsidiary, Praxair (Thailand) Co. Ltd., announced the construction of a new carbon dioxide plant in Map Ta Phut having capacity to produce 300 tons of liquid carbon dioxide per day. The energy efficient plant is scheduled to start production in the fourth quarter of 2011. Praxair (Thailand) Co. Ltd. operates six carbon dioxide plants and one air separation plant and is the largest carbon dioxide producer in the country.
 
The new plant will satisfy the increasing demand for carbon dioxide in Thailand as the gas is been increasingly used in shrimp-freezing, beverage, chemicals and other markets, and also blended with compressed natural gas used in vehicles.
 
Praxair is one of the leading companies engaged in the production and distribution of industrial gases, primarily catering to demands in North America, South America, Europe, and Asia. The company seems to have overcome the recessionary impact and now stands well positioned to leverage from growing demand from almost all geographical regions. End markets, especially chemical, electronic and metal, are expected to boost demand.
 
Praxair has an extensive pipeline of projects with roughly 10 new projects scheduled to be started in the second half of 2010. The project backlog that is incessantly growing is likely to reach roughly $2.5 billion in 2010 compared with $2.0 billion in 2009.
 
For the third quarter of fiscal 2010, management provided its EPS guidance range of roughly $1.15–$1.20. The company reiterated its full year EPS guidance of $4.60 – $4.70, revenue expectation of approximately $10 billion, capital expenditure target of $1.4 billion and a tax rate of about 28%.
 
However, Praxair’s large international presence gives rise to risks related to fluctuations in foreign currencies and geopolitical uncertainties, while volatility in energy prices also jeopardizes energy supply in adverse economic conditions. The company faces stiff competition from Air Products and Chemicals Inc. (APD); Airgas Inc. (ARG); Linde AG (LNAGF.PK); Bodycote (BOY.L) and Chromalloy Gas Turbine Corporation.
 
We currently maintain our Zacks #3 (Hold) Rank and long-term Neutral recommendation on the stock.
 
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