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Praxair: Largest Industrial Gas Company in North America

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Company snapshot

Praxair (PX) is the largest industrial gas producer in North and South America. The company manufactures atmospheric, process, and specialty gases, along with high-performance surface coatings. The company’s industrial gas products are oxygen, nitrogen, argon, rare gases, carbon dioxide, helium, hydrogen, electronic gases, specialty gases, and acetylene. It also produces performance coatings to protect metal parts from high heat and wear. Praxair’s key end-user industries are manufacturing, healthcare, energy, electronics, food and beverage, metal, aerospace, chemicals, and others. Manufacturing is the largest contributor to sales, with a contribution of 24% in 2014. Praxair was established in 1907 and became a listed and traded company in 1992.

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Product segments

Praxair’s segments of the industrial gas business are divided based on regional sales. Overall, the company has five reportable segments:

  • North America – industrial gases
  • Europe – industrial gases
  • South America – industrial gases
  • Asia – industrial gases
  • surface technologies

In 2014, industrial gases contributed to 94% of the revenue, while the rest came from surface technologies. The company primarily generates revenues from 12 countries: the United States, Canada, Mexico, Brazil, Spain, Italy, Germany, Scandinavia, China, India, Korea, and Thailand. The United States has the largest market, with a total sales contribution of around 42% in 2014. The company distributes its industrial gas products through several channels, including on-site, merchant, packaged gas, and others.

In the industrial gases segment, Praxair competes with Air Products and Chemicals (APD) and Airgas (ARG) in the United States, and Air Liquide and Linde are the major industrial gas players in Europe. The largest chemical players, The Dow Chemical Company (DOW) and DuPont (DD), don’t have a presence in the industrial gases segment.

Series outlook

In this series, we’ll discuss Praxair’s business segments, international exposure, currency impact, debt maturity, free cash flow, financial leverage, shareholder rewards, end-market growth, and share performance. In the next few articles, we’ll look at Praxair’s business segments.

The Materials Select Sector SPDR ETF (XLB) largely tracks the performance of major chemical players. The iShares US Basic Materials ETF (IYM) tracks the performance of US-based basic material companies, including chemical companies. Praxair forms 6% of XLB and IYM’s total holdings.

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