Praxair's New Air Separation Plant

Industrial gas company, Praxair Inc. ( PX - Analyst Report ) launched yet another air separation plant in Brazil, this time for Braskem S.A. ( BAK - Snapshot Report ) , the largest petrochemical company in the Americas and the world’s largest producer of biopolymers.

The plant has been started up by Praxair’s Brazilian subsidiary, White Martins and is set up in Brazil’s north-eastern state of Alagoas.

The new plant has a capacity of 200 tons per day and will supply nitrogen and oxygen to Braskem’s polyvinyl chloride (PVC) unit. The unit produces vinylic materials, polyethylene and polypropylene to serve industries such as footwear, toys, housing, sanitation and infrastructure. The new PVC unit is Braskem’s highest investment ever in a single project worth $500 million.

With the PVC unit in operation, Braskem’s yearly PVC production will double in the state, making Alagoas the largest producer of PVC in Latin America. The new plant is perceived as a vehicle to augment the domestic demand of polyvinyl chloride in the region with much emphasis on the construction industry.

Earlier in December 2012, the company’s subsidiary, Praxair Volgograd LLC, also commenced its first air-separation plant in southern Russia. The plant has a capacity of 350 tons per day. This unit produces oxygen, nitrogen and compressed air for a division of the Nikochem Group, Kaustik, in order to reduce the energy consumption of the company at the site by about thirty percent.

Praxair is one of the largest industrial gases companies in North and South America. We currently maintain a Neutral recommendation on Praxair. The stock also carries a Zacks Rank #4 (a short-term Sell). Its prime competitor Air Products & Chemicals Inc. ( APD - Analyst Report ) has a Zacks Rank #2 (Buy).