Praxair, Inc. (NYSE: PX) is the largest industrial gases company in North and South America by sales, and among the biggest worldwide. Its primary products are atmospheric gases (gases that can be extracted directly from the air, such as oxygen, nitrogen, and argon) and process gases (gases that must undergo special processes to be manufactured, such as hydrogen, helium, and carbon dioxide). The company's gases are used in many industrial processes, such as the production of steel, semiconductors, medical devices and oil.^[1]

The industrial gas business is regional in nature because transporting industrial gases over long distances (more than 250 miles) is cost-prohibitive due to the high expense of liquefying gas for long periods of time. Because industrial gases are commodities that are fairly cheap to produce, customers are often unwilling to pay high shipping costs. A majority of Praxair's operating income comes from long term (usually 10-20 years) contracts, in which the company builds plants for the customer, at the customer's site. This is capital intensive but has the benefit of allowing PX to deliver gas more cheaply by cutting out transportation costs altogether. The long length of the contracts also ensure steady sales.

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