To provide customers with the gases required for their industrial production, Air Liquide engineers have developed innovative proprietary technologies. The Group designs and constructs gas production units, from the feasibility study stage through to the delivery of the complete installation, for its own use or for sale to customers who prefer to insource their gas requirements. Air Liquide complies with the increasingly strict safety, reliability and competitiveness requirements of air separation units and hydrogen units.
Since the acquisition of Lurgi in 2007, the Group has expanded its range of technological expertise. It possesses its own proprietary technologies (as developed by Lurgi over 50 years) to produce hydrogen and carbon monoxide through steam methane reforming. This acquisition also expanded the Group’s offering of natural gas conversion technologies to produce syngas, synthetic natural gas, methanol, propylene, liquid fuels and biofuels. This expanded Engineering & Construction aptitude has assisted the Group’s involvement, upstream of industrial gas production projects as well as in the development of its customer processes, thus boosting sales growth.
The majority of Air Liquide’s Engineering & Construction business is geared toward industrial gas production technologies, and in particular the manufacture of air gas or hydrogen and carbon monoxide production units.
To cover all of the primary industrial markets and manage its production costs, the Engineering & Construction business has extensive geographical coverage with engineering centers located mainly in North America, Europe, Asia and the Middle East.
The Group favors the development of its gas sales business over equipment sales. Nonetheless, Engineering & Construction has a strategic value for the Group, both internally and externally.
Internally, the Group benefits from the relevant engineering resources during the investment phase of the projects of its Gas & Services businesses. It provides a high level of expertise, crucial to the design of efficient units which specifically respond to the needs of the Group’s industrial gas customers. It provides support for the Group during site takeovers, by ensuring the appropriate assessment of the quality of assets purchased.
The Engineering & Construction business also serves third-party customers. Air Liquide designs and builds customized units which customers will own and operate. Also, this third-party customer business allows the Group to permanently assess the competitiveness of its own technologies and commercial offering. In particular, Air Liquide is able to forge close relations with customers who produce their own gas and better understand their industrial processes and investment projects. In certain cases, negotiations initially steered toward the sale of equipment were finalized by the signing of a long-term industrial gas supply contract. As part of this third-party customer business, the strategy consists of favoring research and equipment supply contracts and to not support construction risks. Accordingly, Engineering & Construction’s contribution to consolidated revenue can vary significantly from year to year.
The Engineering & Construction activity provides the Group with a genuine competitive edge, enabling it to offer turnkey solutions to its customers and to engage for its own purposes in a process of continuous improvement of industrial processes and reduction in the cost of its industrial assets.