Mexico: new investment in the North for steel manufacturers

Air Liquide announces a new investment in northern Mexico to build a new Air Separation Unit (ASU) and a Steam Methane Reformer (SMR) in Pesquería, Nuevo León. Mexico presents continuing strong growth prospects due to its anticipated commercial growth and its proximity to the U.S. To seize this growth the Group entered Mexico in February 2011.

The announcement comes as Air Liquide enters into a long term contract to supply nitrogen and hydrogen to steel manufacturers Ternium and Tenigal. Under the agreement, Air Liquide will build and operate the new ASU and SMR on the grounds of Ternium’s new facility in Pesquería, which will include a cold-rolling mill and a galvanizing plant. The galvanizing plant is being developed by Tenigal, a joint venture owned 51% by Ternium and 49% by Nippon Steel.

The ASU will produce approximately 350 metric tonnes per day of oxygen and nitrogen in both gaseous and liquid form, while the SMR will produce approximately 275 Nm³/hr of gaseous hydrogen. Both units are slated to start up around mid–2013 when the Ternium and Tenigal facilities are scheduled to begin commercial production. The standardized and modular design of the units provides many benefits, such as cost efficiency, compact layout and simpler operations and maintenance.

The overall investment will be around €28 million ($35 million). The Pesquería ASU will nearly triple Air Liquide’s liquid production capacity in northern Mexico, further positioning Air Liquide as a major player in the country’s growing industrial gas market.

Air Liquide will also significantly strengthen its supply chain infrastructure and sell liquid products to customers in various industries, such as steel, glass and automotive throughout the region.

Michael Graff, President and CEO, American Air Liquide Holdings, Inc. and a member of the Air Liquide Executive Committee, commented: “We are very pleased to be expanding our business in Mexico alongside companies like Ternium and Tenigal, as it reflects upon Air Liquide’s growing presence in northern Mexico. This country is the 15th largest economy in the world, and growth in its industrial gas market is expected to continue well into the future due to robust industrial and manufacturing activity in the northern states. Developing Economies are a growth driver for the Air Liquide Group.”

Maximo Vedoya, Chief Executive Officer of Ternium Mexico, said: “We are pleased to achieve this agreement with Air Liquide Mexico. The installation of these ASU and SMR facilities shows confidence towards our joint project with Nippon Steel in Pesquería, Mexico. The project is strengthened considerably through this kind of partnership, which helps to stimulate economic growth in the region and the country.”