New development in the Shandong Province, China

Air Liquide has entered into a new long term agreement with Rizhao Iron & Steel, in Rizhao, in the south of the Shandong Province. This 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 per year in the near future.

Under the terms of this agreement, Air Liquide took over two existing air separation units as of April 1, 2005, in order to upgrade and operate them, and will install a new large air separation unit due for commissioning in the beginning of 2006 to supply high volumes of oxygen to Rizhao Iron & Steel.

The three units, which represent a global investment of 40 million US dollars, will have a total capacity of about 1,400 tonnes per day. This will enable the Group to serve Rizhao Iron & Steel and to supply other local industrial customers with oxygen, nitrogen and argon. The engineering and construction center of Air Liquide in Hangzhou will provide its technical expertise throughout the project.

Connecting the Greater Shanghai and the Greater Beijing Areas, Shandong is one of the largest provinces situated in Eastern China with a population of more than 90 million and 10% of China's total GDP. Rizhao (city) has a strong development potential. Air Liquide has been present in the Shandong Province since 1995 and has already announced in December 2004, the construction of a large air separation plant in Qingdao for an investment of 25 million US dollars.

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.”