Air Products secures 25pc stake in AHG unit
Pennsylvania, October 2, 2011
Air Products has agreed to acquire a 25 percent stake in the gases and equipment businesses of Abdullah Hashim Industrial Gases & Equipment Company (AHG), a statement said.
The transaction between Air Products and the company of the privately-owned Abdullah Hashim Group which is based in Saudi Arabia is subject to regulatory approval and customary local closing conditions, it said. Financial terms were not disclosed.
AHG is the largest private industrial gases company in Saudi Arabia. It comprises three businesses, including industrial gases, equipment, and consumables and refrigerants.
The company has three main production locations in Dammam, Jeddah and Riyadh, and distribution centres at key locations across Saudi Arabia. AHG also has a purchase agreement with National Industrial Gases Company (NIGC) at Jubail and Yanbu for liquid products.
"AHG is a long-established, respected and financially strong business, run by an experienced leadership team," said Howard Castle-Smith, Air Products' vice president and general manager, Tonnage Gases, Europe and Middle East.
"Merchant gases growth is high, and margins are strong, making it an attractive investment. It is also a significant new platform from which to pursue tonnage gases opportunities in the Middle East," he said.
Air Products and AHG have a long-standing relationship and currently operate two joint ventures. One is an on-site facility supplying oxygen and nitrogen for Shadeed Iron & Steel's production plant in the Sohar Industrial Port of Oman. The other plant supplies nitrogen and hydrogen to Emirates Float Glass in Abu Dhabi.
"We see Air Products as the ideal partner to expand our business across the Middle East," said Khalid Hashim, AHG's managing director. "Our relative strengths – AHG in the supply of merchant gases and Air Products in large scale tonnage plants – make us stronger together. Of course, Air Products is a leader in merchant gases in many other parts of the world, and I expect us to benefit from their capability in new technologies and product innovation that we will offer to our customers and prospects."
Abdullah Hashim Group was founded in 1955 and is owned and operated by the Hashim family. The industrial gases business is a combination of liquid/bulk, pipeline products and a range of packaged gases products. AHG has a particularly strong presence in refining, primary metals markets, medical, food and aviation.
Air Products built the first ever air separation unit (ASU) in the Middle East in the 1950s and has 40 years of operating experience in the region. The company has been working with the petrochemical and refinery industries for decades, building, owning and operating ASUs and hydrogen production plants.
Air Products designed and built two of the world's largest ASUs for Qatar Oryx GTL at its site in Ras Laffan. Air Products also owns an operating facility in the Jebel Ali Free Zone in the UAE. – TradeArabia News Service