New investments in Germany and Italy for major steel customers

June 5, 2008

The worldwide boom of the iron and steel industry continues despite the price increase of raw materials.

In Europe, steel consumption grew more than 5% in 2007, driven mainly by the construction and automotive industry. The European steel industry is also showing overall high utilization rates and solid perspectives.

Industrial gases play a significant role in the steel making process and serve to reduce production costs; i.e. they are used to reduce the consumption of raw materials, like the injection of oxygen in the blast furnace which allows the steel companies to consume less coking coal.

In this context, Air Liquide has decided to invest over €120 million to increase its production capacity in Germany and Italy to meet the increasing demand of its customers.

A world scale new Air Separation Unit (ASU) of 2,300 tonnes of oxygen per day will be built at Oberhausen (Germany) and will be commissioned in 2010. It will be connected to Air Liquide’s 500 km pipeline network in Germany which forms the backbone for the supply of oxygen and nitrogen to numerous large customers in the iron and steel, chemical and petrochemical industries in the Rhine-Ruhr area. This unit will in particular be supplying the increasing needs of Hüttenwerke Krupp Mannesmann GmbH and DK Recycling und Roheisen GmbH with whom Air Liquide has signed new long term contracts.

Air Liquide will also build a new ASU on its 650 km pipeline network in the north of Italy in order to supply the new installation of Arvedi Group in Cremona with whom Air Liquide has entered into a new long term agreement. The new unit is scheduled to be commissioned by end of 2009.

Guy Salzgeber, member of Air Liquide’s Executive Committee, Vice-President for European Operations, declared: “With these new investments, Air Liquide is increasing its global production capacity of oxygen in Europe which represents a unique capability for customers especially in the steel industry. These two new projects are a further illustration of the Group’s acceleration of its growth.”