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Air Products & JSCK Ink Long-Term Nitrogen Supply Contract

Air Products and Chemicals, Inc. APD has inked a long-term contract with JCET STATS ChipPAC Korea Ltd. (JSCK), to supply tonnage quantities of nitrogen to the latter’s new production facility in Incheon, South Korea.

Air Products will build, own and operate a new on-site nitrogen plant which will produce gaseous nitrogen for JSCK's latest facility located in the Yeongjongdo development area of the Incheon Free Economic Zone (“IFEZ”). JSCK’s new facility will utilize Air Products' nitrogen for making advanced flip chip, wirebond and 3D packaging solutions.

The plant is slated to come onstream in 2016. Air Products will supply liquid nitrogen to JSCK from another one of its facilities from mid-2016.

STATS ChipPAC is a leading semiconductor packaging and test services provider. The company is ranked fourth in the world's packaging market with manufacturing operations in Singapore, South Korea and China.

Air Products’ shares closed unchanged at $142.70 on Apr 5.

Air Products is gaining from a diverse customer base, cost-reduction measures and sustained pricing power. New business deals and strategic investments are expected to support results in fiscal 2016.

Air Products is also keeping a tight control on expenses and undertaking work process improvement initiatives. The company is progressing well with its cost-reduction programs, which should boost margins, going forward.

However, Air Products' industrial gases business in the Europe, Middle East, and Africa (EMEA) region is seeing pressure from a weak operating environment. The company is also exposed to currency headwinds.

Air Products carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the diversified chemical space include Arkema S.A. ARKAY, Sinopec Shanghai Petrochemical Co. Ltd. SHI and The Dow Chemical Company DOW. While Arkema and Sinopec sport a Zacks Rank #1 (Strong Buy), Dow carries a Zacks Rank #2 (Buy).

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