In 2008 in the Gases Division, we invested EUR 73m (2007: EUR 68m) in research and development.

As in the previous years, we once again spent a significant portion of this money on improving customer processes and on continuing to develop and improve industrial gases applications and systems by working together with the customer. This approach ensures the long-term loyalty of our customers, as a result of collaboration based on trust. For their part, the customers benefit from a higher level of productivity and from the latest technological processes we are able to provide as a result of successful development. In this way, we are able to implement even long-term research and development projects. At the same time, the close contact we maintain with our customers ensures that we only follow up those solutions which have the potential to be economically viable and successful.

We set out below a number of examples of our R&D activities in the Gases Division to demonstrate the areas on which we have been focusing.

For WuXi PharmaTech, Shanghai, China, a company which specialises in R&D in the field of pharmaceuticals, biotechnology and medical technology, we have implemented a turnkey concept for energy savings, a high product yield and an increase in capacity, on the basis of our applications engineering product range for the pharmaceutical industry. This included developing individual components and tailoring them exactly to the process at our customer’s facility in Shanghai. WuXi PharmaTech works together with the world’s leading pharmaceutical companies and requires the most innovative technologies for its research and development activities on every continent. Therefore, in 2008, we entered into an engineering and service agreement with this company.

Another example from the chemical and energy sector is our development work for the paper industry. These activities are set against a background of increasing requirements relating to paper quality and the reduction of harmful environmental influences during the whole production process. Our patented solutions, ADALKA, GRAFICO and CODIP, markedly improve the paper manufacturing process, partly by using calcium carbonate to enhance the finish of the papers. The Canadian paper group ABITIBI Consolidated has successfully employed our process on the basis of a licence agreement. The group is planning to use this technology as a standard process in all its plants worldwide.

We signed a similar agreement in 2008 in the metallurgy and glass sector with Aleris Europe, Neuhausen am Rheinfall, Switzerland, a leading supplier of aluminium rolled products and extrusions. We successfully tested our AIROX technology for aluminium recycling in one of Aleris’s German factories. We were able not only to make the processes more cost-effective, but also to achieve substantial energy savings. We also succeeded in keeping the aluminium yield and the service life of the fireproof lining of the furnace constant, despite the greater throughput. Under a licence agreement, Aleris will adapt all its European plants to this technology, thereby significantly reducing its CO₂ emissions.

Another example in the metallurgy sector, from the world of steel, is our innovative REBOX®-DFI process, with which steel strip in continuous annealing furnaces can be heated very rapidly and cleaned. As a result of the oxyfuel flames having direct contact with the entire surface of the steel strip, it is heated up extremely quickly and cleaned by residual oils and solid particles which are produced by the manufacturing process. This means that the pre-furnace cleaning of strip can be greatly simplified or even be omitted altogether. The process therefore contributes in a simple way towards significantly increasing the production capacity of a strip processing line, and as a result offers great potential in terms of cost-effectiveness and quality. We have entered into an agreement with SMS Demag AG, Düsseldorf, Germany, a company in the SMS Group, for the exclusive marketing of the REBOX®-DFI process in continuous annealing furnaces which are being constructed for strip processing lines. SMS Demag, one of the leading suppliers in the world to the steel industry, will therefore be able to offer innovative furnace technology for new strip processing lines and to exploit its resulting competitive advantage.

In the field of metal processing, we have entered into a long-term cooperation agreement with the Universität der Bundeswehr in Munich, a university for officers and prospective officers in the German armed forces, and have established a centre of competence for “advanced arc welding processes”. Each side will bring their respective skills to the table, so as to develop the plasma tap hole process for widespread industrial use. This method, which closes a gap between traditional arc-welding technology and laser-welding, can be applied to pipeline construction and shipbuilding, as well as to the construction of pressure boilers, where it will significantly improve the cost-effectiveness of welding. The research is concerned not only with appropriate handling of the process, but also various materials issues. These will be clarified in a doctoral dissertation. The combination of basic research, device-related equipment and knowledge of the specific requirements of various industries is the quickest road to success.

To protect our innovative technologies and the solutions associated with those technologies, we filed numerous new patent applications in the 2008 financial year. These form the basis of constant improvements in the production processes of our customers, and of innovative processes and technologies which were previously not available and which create a significant competitive advantage in various industries. Our R&D activities will be the key to the continuing success of the Group even in economically difficult times. Due to our focus on the development of eco-friendly production processes, we are able to meet the ever-increasing requirements of our customers.