Chief Financial Officer Paul Huck said the Trexlertown gases and chemicals company will boost its stake in "on-purpose" hydrogen, which is made by itself, not as a byproduct of another process. The company spent about $5 billion worldwide on on-purpose hydrogen projects between 1995 and this year.
Main forces behind the expansion include tighter clean-fuel laws across the globe, and increasingly dirty supplies of crude oil. Refineries use gaseous hydrogen to remove sulfur from crude oil, making cleaner gasoline.
Also, those refiners are expected to increase their fuel production, while cutting back on other oil-based products. That should increase demand for hydrogen, Huck said.
"We do think that's a great opportunity for us," Huck said at a global chemicals conference in New York City. His speech was broadcast on the Internet.
Air Products ranks as the world's largest supplier of hydrogen. The company has identified energy and process industries, which includes hydrogen, as one of four key areas offering especially strong growth potential.
The company is already in the middle of a growth spurt that will see it open five hydrogen plants in a 12- to 18-month span. Those new facilities will boost Air Products' production capacity by 38 percent, officials said earlier this year.
Hydrogen made up about 20 percent, or about $1 billion, of Air Products' $5.2 billion gases sales in fiscal 2004. The company also sells hydrogen in liquid form to the steelmaking, aerospace and other industries.
Air Products is also trying to build a position as supplier to the "hydrogen economy," an anticipated future when hydrogen will power cars and electricity plants. Experts believe the hydrogen economy is decades away, though, and will not have a short-term impact on Air Products' earnings.
Other growth areas targeted by Air Products include energy, electronics and Asian operations. The company also is working to improve its return on capital.
Huck said Air Products' New Orleans plant, which makes gaseous and liquid hydrogen, has resumed operations following damage from Hurricane Katrina. Most of its refinery customers are up and running too, he added.
But a liquid hydrogen plant in Sarnia, Ontario, Canada, remains partially shut down because its feedstock supply has not been restored, Huck said.
Air Products stock lost 45 cents per share
on the New York Stock Exchange, closing at $60.23 per share in light trading
volume.