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Air Products handles downturn in demand for gases

Even during the bad times US industrial gas and chemical company Air Products has survived in good shape because it has business in many different markets. Despite that, even Air Products has had two …

Even during the bad times US industrial gas and chemical company Air Products has survived in good shape because it has business in many different markets. Despite that, even Air Products has had two sets of voluntary layoffs at regional sites, totalling 34 people doing work related to the semiconductor industry. Thirteen accepted 10-week layoffs at the company“s Semiconductor Equipment Manufacturing Center in Allentown, which employs 117. Another 21 accepted eight-week layoffs at the Hometown industrial gases plant in Schuylkill County, which employs 360. Air Products employs 4,200 people in the US and 17,500 worldwide. John P. Jones, Air Products chairman, president and chief executive officer, said that even with the slowdown in semiconductor manufacturing, growth rates for Air Products“ offerings in the sector are higher than average for the industrial gases industry as a whole. On July 20, Air Products said its operating net income was US$ 132 million, or 60 cents per share, in the quarter ended June 30. That“s down from US$ 139 million a year before. Sales were up 1%, to US$ 1.4 billion. “The electronics industry is cyclical,” said Karen Gilsenan, an analyst with Merrill Lynch. “We“re in the midst of a down cycle, but Air Products is out-performing the market. Diversity helps when there“s a general softening of the market.” For several years, Air Products has seen annual growth of 50% in the electronics business. That changed in June, when the depressed market caught up with the Trexlertown company. “Sales in electronics decelerated month by month, from up 42% in April to up 14% in May to down sharply in June,” Gilsenan said. “Management estimates this business will fall about 30% in the September quarter, a steeper decline than in the month of June.” Business at Air Products is constantly changing, so much so that last year“s unsuccessful US$ 12.9 billion takeover of the British BOC Group is no longer a big concern. Since the merger died in mid-2000, Air Products“ stock has climbed about 80% to almost US$ 50 per share since the BOC deal fell through.

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