Linde AG, the world's largest manufacturer of industrial gases, formed a joint venture on Friday with Sinopec Qilu Co to supply oxygen, nitrogen and argon to customers in East China's Shandong Province.

The venture, called Zibo BOC Qilu Gases Co and equally owned by Qilu and Linde subsidiary BOC Gases, involves a total investment of around US$64 million.

The new firm, with a 180-strong workforce, will start with Qilu's two existing air-separation units, while a new one will be built at Zibo in Shandong.

"With the objective of focusing on our core business, and taking into account the very good track record of BOC Gases in China, we selected Linde Group as our partner, Sinpoec Qilu Manager Wang Shude told Friday's inauguration ceremony.

"The economic benefits for both parties from this joint venture will secure a win-win relationship," added Wang, whose company is owned by Sinopec, Asia's biggest oil refiner.
Steven Fang, managing director of BOC's China tonnage unit, said: "Shandong is one of the fastest-growing manufacturing markets in China, and we can see great opportunities ahead of us. We are keen to create opportunities to take us forward."

Thanks to the rapid development of its manufacturing sector, Shandong's demand for industrial gases is growing at an equally rapid pace.

That explains why Linde Group, a German industrial gases and engineering company with more than 53,000 employees in around 70 countries, has targeted Shandong.

But Linde is no stranger to the Chinese market, where it already employs around 2,000 staff and has invested in excess of US$750 million.

"We have big plans to invest in China in future," said Rainer Schlicher, a member of the operational board of Linde AG.

The acquisition of BOC earlier this year was one of its most significant moves so far in China, Schlicher added.

"We were interested in acquiring BOC because of its strong position in China," he noted.
One of earliest foreign industrial gas suppliers to arrive in China, BOC mainly operates in northern China and the country's eastern seaboard, while Linde's strongholds are in Fuijian Province and Shanghai.

"We intend to expand to other provinces as well," he said, and the company is looking at industrial parks across China.

Linde is also in talks with Sinopec about other co-operation opportunities," added Schlicher. Co-operation between the two firms kicked off several years ago with the establishment of joint ventures between BOC and Sinopec's Shanghai and Nanjing branches.

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