Airgas
Fresh Opportunities, Fresh Challenges

Opportunity and challenge go hand-in-hand as Airgas advances. Initially a local distributor of commodity gases, Airgas has evolved into a national partner providing value-added products and services to large, leading corporations and smaller, specialized enterprises. Its entrepreneurial, flexible, market-facing approaches enable it to partner with its customers by understanding their businesses and their goals. A central challenge lies in managing the company’s ever expanding operations, while incorporating new products, new technologies, and new information systems. Opportunities for growth are vast and include expansions into new geographies and services, while renewing a daily recommitment to customer service.

EXPANDING PRODUCTS

Today, as in 1982, Airgas provides gas in cylinders to customers. Through the years, the company has expanded from that simple start into a great variety of product adjacencies. Today Airgas serves more than one million customers in a multitude of market segments, even as strategic growth businesses support and develop around its core industrial gas product line.

Industrial ammonia

Airgas Specialty Products was created with the 2005 purchase of an ammonia business. Industrial ammonia is used for refrigeration, metal finishing, water treatment and chemical processing. Power plants, cement kilns and other industries regulated by the EPA use ammonia to control greenhouse gas emissions. With the completion of facilities in California and Missouri, Airgas Specialty Products now distributes ammonia and provides ammonia-related services from 25 facilities and is the largest seller of packaged ammonia in the country.

Airgas operates eight national labs and over 60 regional labs able to produce high-purity specialty gases and gas mixtures. The labs are designed to augment the capabilities of more than 325 Airgas traditional gas-filling plants throughout the United States. Their work is supplemented by two specialty gas equipment centers and an R&D center.

In 2008 Airgas acquired Refron, which gave the critical mass necessary to form Airgas Refrigerants, a promising new business focused on the sale and reclamation of refrigerants.

Acquisitions 2003-2010

DISTRIBUTION ACQUISITIONS: FISCAL YEARS 2003-2010

EFFECTIVE DATE
ACQUIRED


BUSINESS ACQUIRED


ACQUIRING SUBSIDIARY

2003

9-10-02

1. B. & S. Welding and Supply, Inc.

South

11-27-02

2. Welding Metals, Inc.

Great Lakes

2-28-03

3.  Bail Welding Supplies, Inc.

Mid America

3-31-03

4.  Union Industrial Gas and Supply, Inc.

South
NCN
West
Red-D-Arc

CUMULATIVE  313

2004

4-14-03

1. Carbon Dioxide Sales Company, Inc.

Carbonic
Gulf States

5-1-03

2. Delta Safety, Inc.

NCN

11-26-03

3. Safety West, Inc.

Airgas West

2-27-04

4. Littell Industries, Inc.

Airgas West

3-31-04

5. Interstate Welding Sales Corporation

North Central

CUMULATIVE  318

2005

5-31-04

1. Red-D-Arc S.A. de CV

Red-D-Arc

7-30-04

2. BOC’s U.S. Packaged Gas Business

East, Great Lakes, Mid America, North Central, South, Southwest, Nor Pac, NCN, Mid South, West, National Welders

8-31-04

3. Welding Supply House, Inc.

Gulf States

9-4-04

4. Welding Industrial Supply of Selma, Inc.

Airgas South

10-1-04

5. Arctic Dry Ice, Inc.

Airgas Dry Ice

10-30-04

6. A&R Welding Supply, Inc.

Airgas West

11-3-04

7. Idaho Welding Supply, Inc.

Intermountain

11-5-04

8. The Gala Gas Company

Airgas South

12-1-04

9. Praxair, Oregon Stores

Nor Pac

12-1-04

10. DC Welding Supply, Inc.

NCN

12-1-04

11. Watt Welding Supply, Inc.

Nor Pac

2-1-05

12. Tri State Welding Supply, Inc.

Intermountain

3-9-05

13.  ITS – AUI, Inc.

Rutland Tool

3-31-05

14.  San Luis Surgical

Airgas West

CUMULATIVE  332

2006

5-2-05

1.  Cumberland Welding Supply

Airgas Mid America

5-2-05

2.  Vancouver Welding Supply
        BiState Welding
        Mid-Columbia Welders Supply

Nor Pac

6-1-05

3.  LaRoche Industries Inc

Airgas Specialty Products

6-1-05      

4.  Missouri River Holdings, Inc. (Kanox)

Airgas Investment Inc

9-1-05

5.  Associated Welding Products

Nor Pac

1-3-06

6.  Oxygen Service Company, Inc.

Airgas South

1-4-06

7.  Alabama Cylinder Gas

Airgas South

2-1-06

8.  West Point Supply Co., Inc.

Airgas Dry Ice
Airgas East

2-3-06

9.  CRS Welding Supply Co., Inc.

Airgas Great Lakes

3-31-06

10.  Byrne Specialty Gases, Inc.

Airgas Nor-Pac

3-31-06

11.  Tri City Welding

Airgas Mid-America
National Welders

CUMULATIVE  343

2007

4-3-06

1.  Airtec, Inc.

Airgas North Central

8-24-06

2.  Werts Welding Supply

Airgas North Central

9-1-06

3.  Aeriform

Gulf States, Southwest, Mid South

9-1-06

4.  Gala Gas Company

Airgas South

11-1-06

5.  Georgia Medical Gases Inc.

Airgas South

11-1-06

6.  UIG

Gulf States, Southwest, ASG

12-1-06

7.  Respiratory Equipment & Manufacturing Company

Airgas Great Lakes

12-1-06

8.  Southern Welding Supply, Inc.

Airgas South

12-1-06

9.  Giant CO2

Airgas West

12-1-06

10.  Alpena Supply Company

Airgas Great Lakes

1-1-07

11.  CFC Refimax, LLC

Airgas Specialty

2-28-07

12.  Ferguson Industrial Gases, Inc.

Airgas Southwest

3-9-07

13.  Linde Bulk

Airgas Merchant Gases

CUMULATIVE  356

2008

4-1-07

1.  World Wide Welding, Inc

Safety

5-21-07

2.  Continental Nitrogen & Resources

Airgas Specialty Products

6-1-07

3.  Alvin Welding Supply Co.

Airgas Southwest

7-1-07

4.  Linde Packaged

East, Mid America, South, Gulf States, Great Lakes, North Central, National Welders, Mid South, ASG

7-1-07

5.  Lehner & Martin

Airgas West

8-1-07

6.  Gartech Refrigerant Reclamation

Airgas Specialty Products

8-31-07

7.  Consolidated Cryogenics

Airgas West

8-31-07

8.  Dantack Corporation

Airgas Southwest

11-1-07

9.  Central Welding Supply

Airgas Southwest

11-1-07

10.  Texas Industrial Gas, Inc.

Airgas Southwest

11-30-07

11.  Basin Welding Supply

Airgas Southwest

11-30-07

12.  Wright Welding Supply

Airgas North Central

11-30-07

13.  Mainland Welding Supplies

Airgas Canada

12-31-07

14.  Pacific Diazo Products, Inc.

Airgas Specialty Products

12-31-07

15.  Smith Welding Supply Co.

Airgas Great Lakes

1-2-08

16.  Pima Welding Supply, Inc.

Airgas West

2-1-08

17. Merriam-Graves Corporation

Airgas East

2-29-08

18.  Northeast Gas Technologies

Airgas East

CUMULATIVE  374

2009

4-1-08

1.  Luna County Welding Supply

Airgas Southwest

4-4-08

2.  A&N Management

Red-D-Arc

4-4-08

3.  A&N Europe

Red-D-Arc

4-30-08

4.  Port Huron Welding Supply, Inc.

Airgas Great Lakes

7-1-08

5. Medical Gas Management, LLC

Medical Gas Management

7-1-08

6. Oilind Safety

Oilind Safety

8-1-08

7. Refron, Inc.

Airgas Refrigerants

10-1-08

8. Woodland Technologies

Airgas Intermountain

10-31-08

9. Western Medical Gas Services

Airgas West

10-31-08

10. IronTech Welding

Airgas NorPac

11-1-08

11. Techwood Industrial Gases

Airgas South

12-1-08

12. Texair Welding Supply

Airgas Mid-South

12-1-08

13. Gordon Woods Industrial Welding Supply, Inc.

Accu Air Gases & Equipment, LP
Summit Gas & Gear, LP
Airgas West

1-2-09

14. Great Lakes Oxygen

Airgas Great Lakes

3-31-09

15. S.K.I.L. Enterprises

Airgas Retail Services

CUMULATIVE  388

2010

5-1-09

1.  Medical Gas Professionals

Medical Gas Mgmt

10-1-09

2.  Environmental Compliance Testing

Medical Gas Mgmt

11-16-09

3.  Tri-Tech

Airgas South-ANW

12-1-09

4.  Fitch Industrial & Welding Supply

Airgas MSO-Southwest

1-4-10

5.  Chance Sales Co.

Airgas Southwest

CUMULATIVE  393

“We want to grow our business, grow through acquisitions, and grow organically.”

Mike Molinini, Executive VP and COO

EXPANDING CUSTOMER SERVICE

“We’re out to change the Airgas culture one customer interaction at a time.”

Peter McCausland

As Airgas expands, the call to customer service has steadily moved to the center through an ongoing series of “core strategies.” Approaching the year 2000 the company repositioned for growth; then came the strategic accounts business, reaching into untapped markets. However, as the company grew, it slipped behind aggressive independents who took customer service to a new level by providing exactly what customers wanted when they wanted it.

In 2003 Airgas launched Core Strategy I in response, stocking its stores with the products customers most needed and training frontline associates on welding and cutting techniques to better answer customer questions. Airgas also enhanced the tools and resources used by branches to manage their businesses, streamlining tasks that took time away from serving customers. Numerous innovations were put in place to make ordering easy, invoicing accurate and deliveries punctual.

Building on the success of this strategy, Airgas launched Core Strategy II in 2008 to ensure that every customer experience is a positive one. By stressing outstanding service, Core Strategy II aims to create a competitive advantage. The centerpiece is an intensive training program in service skills and behaviors for customer-facing associates in every Airgas region. In three- to five-day training sessions, associates learn how to improve their service skills and behaviors, focusing on “The Three C’s”—Connect, Consult, and Complete—in every interaction. The program is yielding excellent results, as letters from grateful and satisfied customers testify.

Most recently, Airgas has launched Core Strategy III to implement a highly customized version of the SAP business information system. This will unite the company across an enterprise-wide information system and improve business processes, making it easier for customers to do business across multiple Airgas branches. In the Airgas spirit of continuous improvement, Core Strategy III and the new SAP system replace four major computer programs, more than 40 enterprise-wide systems and in excess of 250 unique applications. The strategy involved tapping hundreds of subject-matter experts in more than 90 “design sessions” to develop the processes that will sustain the company. The first go-live conversion was for Airgas Safety, all Airgas Distribution Centers and Buying Centers, Worldwide Welding, and portions of Airgas accounting, Airgas headquarters and strategic accounts in July 2010, and all went smoothly.

Core Strategy II

EXPANDING TECHNOLOGIES

As new companies were steadily acquired, Airgas found itself with a plethora of processes for creating and distributing product information. Standardizing this system soon became a challenge. The idea of transitioning to a single software platform became increasingly attractive in recent years. Fortunately SAP offered the solution to this challenge. Customizing and implementing SAP on a company-wide scale is today the subject of a concerted effort by all Airgas associates.

In a daily sales business with over 1,000,000 customers, making key decisions as close to the customer as possible, is the key to quality customer service. The new system has to embody this core aspect of company philosophy. To develop its customized SAP system, Airgas engaged 300 subject matter experts to identify the particular needs of the system within a highly competitive packaged gas market, and implement it without disturbing the Airgas customer base.

In July 2010 Airgas successfully converted it hardgoods supply chain infrastructure to SAP. The hardgoods supply chain included more than 300,000 stock keeping units, six national distribution centers, and a safety products telesales organization. The early success of this implementation spurred the decision to accelerate the conversion process company-wide.

Airgas realized long ago that expanding its safety telesales organization into welding hardgoods and packaged industrial gases would mean it could reach an untapped customer base, but they were hindered by the incompatibility of the various information systems it employed. The new SAP not only resolved these issues, but also allowed Airgas to transform its website to an online sales channel.

Guided by the mantra, "It Is All about the Value," Airgas has continued to successfully implement its highly customized SAP system and is already realizing its economic benefits in the key areas of sales growth, price management, and administrative and operating efficiencies. Full implementation is expected by the end of 2013.

EXPANDING MARKETS

“This company was little; now it’s big and international. We’ve been looking in China and India, where they have packaged-gas businesses. The same goes for South America.”

Peter McCausland

Great potential lies in the market segment approach, which underlies much of the company’s activity. Industry-focused teams deal with medical, construction, retail food and beverage, and university segments, among others.

At the same time Airgas is once again expanding overseas, through its subsidiary company Red-D-Arc Welderentals, the largest provider of welding and welding-related rental products and services in North America. In 2003 Red-D-Arc incorporated in Mexico, and three years later it launched a joint venture in Dubai, UAE, to provide service in the Middle East. Red-D-Arc moved into the European market through the 2008 acquisition of A&N Plant, a supplier of new and reconditioned equipment, with facilities in England and the Netherlands and operations in Europe, Asia and the Middle East.

Markets
Red-D-Arc in Grimsby, Ontario, Canada.

AIRGAS LOOKS AHEAD

Despite a global economic downturn of epic proportions, and a prolonged hostile takeover bid from Air Products, Airgas has emerged stronger than ever. Airgas is now poised to reap the benefits of its recent investments in company infrastructure and continue to generate value for Airgas shareholders. The ability to thrive—not merely survive—can be attributed directly to the extraordinary talents of Airgas associates and their focus on the core strategies of customer service, workplace safety, teamwork, community involvement and cost control.

Peter McCausland

With more than 30 years of success to his credit, Airgas CEO Peter McCausland confidently states that, for Airgas, “the best time is now.” More than 15,000 associates in approximately 1,100 locations power the company’s expanding repertoire of products and services. A culture of entrepreneurship and growth pervades the Airgas family. Airgas today and tomorrow proudly provides essential ingredients of our modern lifestyles. Truly, the best time is now.