Chinese expansion and investment in the pipeline for gas major Linde

As the global gases and engineering giant founded in Germany in 1879 celebrates its 140th anniversary this year, Steven Fang, head of Linde Greater China, spoke with China Daily on the company's development and future vision in China.

Q: Could you give us a brief introduction to Linde's business performance in China in 2018? What's China's position in Linde's global business network?

A: One of the most significant events was the approval for Linde AG and Praxair Inc to merge to form Linde plc, a leading industrial gases and engineering company with 2018 pro forma sales of $28 billion.

So far, China has become the second-largest market following the United States for Linde. And it is the one of the fastest growing markets in the Asia-Pacific region.

In 2018, Linde in China delivered strong business performance by improving its base business and strengthening new business wins. A series of new business wins were secured with Linde's further investment in China, such as the Sinochem project and Huayi Qinzhou project.

Q: We know that Linde has been in the Chinese market for more than three decades and it has witnessed the industrial gas industry's development in China. What is your perspective of these changes?

A: Linde has endeavored to promote gas industry development since 1987 when legacy Linde entered China as the first international gas company. Since then, we have created many firsts that witnessed the progress of the whole industry across the country. For example, we first introduced the business model of commercialization of liquid gas in the country. In 1992, legacy Praxair operated and managed one of the longest industrial gas pipelines in China.

Now the industrial gas outsourcing rate in China has exceeded more than 50 percent from zero in the 1980s. In this course, Linde has played a very important role. In developed countries, such an outsourcing rate, which reflects the industry's specialization and segmentation, is higher than 70 percent. In this regard, we can see that there is still a large amount of growth potential left in China.

Q: In a dynamic economic environment, how does Linde cope with changes and uncertainties?

A: With more than three decades of development in China, We are confident to cope with the ever-changing and periodic economic environment cycle globally and domestically.

Linde serves a wide range of industries from petrochemical, manufacturing, metallurgy electronics, transport, healthcare, chemical, food and beverage, to energy. The diversified industry and customer portfolio enable us to stay ahead the economic cycle and keep a stable growth in China market.

Q: The merger of Linde AG and Praxair Inc reportedly created the single biggest player in the global industrial gases business. For the Chinese market, what can be expected from such a combination?

A: The successful merger of Linde AG and Praxair Inc combined legacy Linde's expertise in engineering and technology and legacy Praxair's operational excellence. Now, Linde is a leading gases and engineering company and is regarded as one of the most valued gas companies, with a market value exceeding $100 billion. Meanwhile, it owns a more balanced geographic footprint globally.

In China, after the merger, we not only expanded our footprint geographically, but also strengthened and enlarged our customer portfolio to include companies such as Sinopec, Baosteel, Shanghai Huayi, Wanhua Chemical, on multiple projects.

The merger brought about an increased market network density that has resulted in efficiency and profitability. Besides that, operational efficiency and digital operating technologies innovation have been optimized, which helps maximize the customer benefits and added value.

Also, the merger allows us to gather the best talent in the gas industry, who will play a vital role in our future development.

Q: Could you share more about Linde's business strategy in China in the next three years?

A: We will ramp up our development in China, an important market for Linde. We have confidence in China and would like to continue to contribute to the industry development in the future. One example could be hydrogen mobility.

Linde is a global leader in hydrogen technology. With significant advantages in technology, engineering, R&D and successful application experience, Linde wants to supporting the development of China's hydrogen mobility industry.

For example, in 2017, Linde with other local partners including SAIC and Shanghai Shunhua New Energy jointly invested in and established a joint venture of Shanghai Elite Energy Technologies. This year, Linde provided proven hydrogen technology to help Shanghai Elite commission the first commercialized hydrogen fueling station as well as the first commercialized 70-Mpa hydrogen fueling station in China. It is also the largest hydrogen fueling station in the world. In this project, Linde provides a stable and reliable hydrogen supply through pipelines in the park, hydrogen transport, storage and key equipment such as ionic compressors for the fueling equipment.

Q: In July, Linde started a new research laboratory in Shanghai. Could you share more information about it? What breakthroughs and innovation has Linde made over the past years?

A: Globally, Linde has a total of three R&D centers in China, Germany and the US. The China center - Linde Technology Center Shanghaiwas established in 2007, including the Linde Technology Center Combustion Laboratory in Suzhou and the Laser Laboratory in Shanghai, which opened in July.

Linde Technology Center Shanghai is responsible for developing new industrial gas application technologies and solutions to meet the needs of customers in China and the Asia-Pacific region, and to promote gas sales and profitability through application technologies.

Meanwhile, the center also introduces and transfers Linde's global advanced technologies to China.

Innovation is Linde's DNA since its establishment by Carl von Linde. The company founder was an inventor and pioneer in refrigeration technology, which laid the foundation for a new sector of industry in his day. The company advocates and encourages innovation throughout the whole company globally. We have made a series of innovations in areas such as hydrogen mobility technologies, supercritical carbon dioxide plastic foaming technologies, waste water treatment and ground freezing technologies by using liquid nitrogen for tunnel excavation.

Q: This year also marks the 140th anniversary of the establishment of Linde. Looking into the future, is there any new vision for Linde in its growth path? And what does Linde expect from the Chinese market?

A: This year not only marks 140 years' development of Linde, but represents the history of the industrial gas industry. In the long run, Linde is committed to fulfilling its vision to be the best-performing global industrial gases and engineering company.

In China, we will focus on improving efficiency and performance, creating more value for our customers.

We will go closer to China's market and keep pace with China's economic moves to explore new market opportunities. With China's industrial transformation and upgrading, we will expand our product offerings and services for more regions, especially the inland area.

Business in sectors like petrochemical, chemical, energy, steel, hydrogen mobility, healthcare and electronics will also be enhanced.

wanghongyi@chinadaily.com.cn

(China Daily 09/07/2019 page13)