Air Products (APD) has further expanded its foothold in the Midwest through a long-term agreement with Southwest Iowa Renewable Energy, LLC (SIREF) to produce liquid CO2. The agreement will strengthen Air Products’ liquid CO2 network in the Midwest by adding another supply source. Air Products will supply liquid CO2 to food and beverage and industrial bulk gas customers in the Midwest.
Air Products will build a plant at SIRE's ethanol production facility in Council Bluffs, Iowa, to produce 400 tons of liquid CO2 per day (tpd). The plant is expected to start production from early 2014. Once the new plant at SIRE comes online, it will increase the number of liquid CO2 production plants in the U.S. to 13.
SIRE, established in 2005, operates a 125 million gallon ethanol plant. It also produces Dried Distillers' Grain and Wet Distiller Grains. It sells ethanol, distillers grains, corn syrup, and corn oil in the continental U.S., Mexico and the Pacific Rim.
Prior to this agreement, Air Product expanded its portfolio of industrial gases offerings in North America by acquiring Monroe, La.-based EPCO Carbon Dioxide Products, Inc. on Jun 3, 2013. EPCO is a privately-held company that manufactures and markets liquid CO2. The buyout also included Ill.-based Louisiana Leasing, Ltd., an affiliate to EPCO that owns liquid CO2 distribution assets solely leased to the host company.
The acquisition of EPCO has positioned Air Products among the leaders in the North American liquid CO2 market and as a fully-integrated supplier of bulk industrial gases by increasing its competitive offerings.
Air Products already offers liquid CO2 across the globe. Liquid CO2 is a chief product supplied in the food, beverage, chemical, pharmaceutical, oil field services, and metals fabrication markets among other merchant industrial gases.
Air Products currently carries a Zacks Rank #3 (Hold).
Other companies in the chemical industry worth considering are Asahi Kasei Corp. ( AHKSY), Johnson Matthey plc ( JMPLY) and Methanex Corp. ( MEOH). While Asahi Kasei and Johnson Matthey hold a Zacks Rank #1 (Strong Buy), Methanex retains a Zacks Rank #2 (Buy).