Argentina , Chile , Brazil and Colombia

Air Products takes Latin America hit

Bnamericas Published: Tuesday, October 29, 2013

US gases and chemicals producer Air Products and Chemicals (NYSE: APD) said its sales of gases to businesses in Latin America fell by 4% in the fiscal fourth quarter.

A 1% rise in prices in the region could not offset flat sales volumes and a 5% drop in local currencies.

In addition, the company said its large-scale tonnage gas business suffered from the termination of an unspecified contract in Latin America.

In 2012, Air Products purchased a 67% stake in Santiago, Chile-based industrial gas company Indura, the largest independent industrial gas company in Latin America.

For the first time, Air Products provided a breakdown of its results in the region.

"Latin America is an increasingly important part of our global portfolio," Simon Moore, director of investor relations, said on a conference call.

"Brazil [merchant gas] volumes were flat overall, with some growth in liquid oxygen and liquid nitrogen. We brought onstream a new liquid plant in São Paulo that has provided significant productivity benefits."

The new plant added capacity and enabled Air Products to shut down a less productive facility that was over 35 years old.

"Indura volumes were flat with delays in mining projects in Chile and economic weakness in Colombia and Argentina," Moore added.

Capacity utilization in the merchant gases business in the region was in the mid-70s.

"We remain pleased with the team and the business, the integration has gone well and we have exceeded our opportunities for synergies," Moore said.

Chief executive John McGlade said that the Indura acquisition "strengthened our position in this fast growing market."

Total sales for Air Products in the quarter fell by 1% to US$2.6bn, while operating income increased 3% to US$421mn.

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