Air Liquide have entered into a long-term agreement with Rizhao Iron and Steel to take control of two existing ASUs and build a new one.

The Chinese group has a current steel production of three million tonnes per year, both for domestic and export customers and plans to increase it to five million tonnes in the near future.

Under the terms of the agreement, Air Liquide took over two existing air separation units (ASU) at the beginning of this month to upgrade and operate them. The company is also obliged to install a new ASU due for commissioning in the beginning of 2006 to supply large volumes of oxygen to Rizhao Iron & Steel.

The three units represent a global investment of $40 million USD and will have a total capacity of around 1,400 tonnes per day. This will enable the group to supply Rizhao Iron & Steel and other local industrial customers, which represents about 10% of China’s GDP, with oxygen, nitrogen and argon.

Commenting on this new development, Jean-Pierre Duprieu, Senior Vice-President Asia-Pacific and member of the Executive Committee of Air Liquide said “This agreement is of great importance for Air Liquide. It represents a new major step into a fast growing region and will significantly strengthen Air Liquide’s presence and market position in China.”

Shuanghua Du, Chaiman of Rizhao Iron & Steel added: “ I am confident that the industrial partnership we established with Air Liquide is a win-win collaboration and it will further strengthen our efforts in making our company stronger by focusing on our own core business.”