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VHI, Valhi Inc.

Industrial Gases capital-intensive Cyclical

Revenue is Chemicals (90%), Component Products (8%) and Real Estate Management and Development (3%).

Latest annual: FY2025 10-K

VHI · Valhi Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$2.1B

−1.3% YoY · 2% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $2.2B 5-yr avg $2.1B

Gross margin 15% 5-yr avg 19%

Operating margin 3.6% 5-yr avg 7.9%

Owner-earnings margin 3% 5-yr avg 2%

Free cash flow margin 3% 5-yr avg 2%

Next report Est. 11/3–11/9 · the 10-Q for the quarter ended late September · due within 45 days of period end · has filed ~38 days after · the wire records it on arrival

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: A chemicals business, converting feedstocks into products at a spread the cycle moves.
Situation: Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
What moves the needle: Gross margin has run about 22% and operating margin about 10% through the cycle, a thin spread that turns the result on volume and the cost of what it sells far more than on the price it sets. The margin is cyclical, swinging between 1.8% and 20% over the years, so the through-cycle figure carries more than any single year — and the balance sheet at the trough more than the peak. Inventory runs near 28% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. Read this kind of business on the spread and utilization. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

The largest slice of sales is Chemicals at 90%, but the profit engine is Real Estate Management And Development: 3% of revenue and 74% of the profitable segments' operating profit. Chemicals ran a $25M operating loss.

Revenue by reportable segment, FY2025

Operating profit profitable segments only

Chemicals90%$1.9Bloss of $25M
Component Products8%$158M26% of profit
Real Estate Management And Development3%$59M74% of profit

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of the profitable segments' operating profit (a loss-making segment carries its loss in dollars in the legend, not a share of the bar), before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMJun 2026
											Income statement
$1.5B	$1.9B	$1.8B	$1.9B	$1.8B	$2.3B	$2.2B	$1.9B	$2.1B	$2.1B	$2.2B	RevenueRevenue
$308M	$613M	$609M	$435M	$412M	$580M	$490M	$245M	$425M	$295M	$318M	Gross profitGross prof.
20%	33%	33%	23%	22%	25%	22%	13%	20%	14%	15%	Gross marginGross mgn
15%	14%	17%	16%	15%	14%	14%	14%	12%	15%	14%	SG&A / revenueSG&A/rev
1%	1%	1%	1%	1%	1%	1%	1%	1%	1%	1%	R&D / revenueR&D/rev
$119M	$380M	$371M	$193M	$186M	$319M	$239M	$34M	$211M	$63M	$78M	Operating incomeOp. inc.
7.8%	20.2%	20.4%	10.2%	10.1%	13.9%	10.8%	1.8%	10.0%	3.0%	3.6%	Operating marginOp. mgn
$40M	$292M	$236M	$105M	$101M	$258M	$170M	($20M)	$244M	($43M)	—	Pretax incomePretax
($16M)	$208M	$262M	$49M	$55M	$127M	$87M	($10M)	$108M	($58M)	($51M)	Net incomeNet inc.
47%	—	—	25%	16%	23%	22%	—	34%	—	—	Effective tax rateTax rate
											Cash flow & returns
$80M	$259M	$166M	$177M	$152M	$460M	$35M	$4M	$44M	($36M)	$112M	Operating cash flowOp. cash
$68M	$59M	$58M	$57M	$69M	$59M	$59M	$54M	$67M	$66M	$69M	Depreciation & amortizationD&A
$28M	($7M)	($155M)	$71M	$29M	$273M	($111M)	($40M)	($131M)	($44M)	$94M	Working capital & otherWC & other
$59M	$71M	$61M	$60M	$66M	$64M	$68M	$49M	$31M	$47M	$49M	CapexCapex
3.9%	3.8%	3.4%	3.2%	3.5%	2.8%	3.0%	2.5%	1.5%	2.2%	2.3%	Capex / revenueCapex/rev
$21M	$188M	$104M	$117M	$87M	$396M	($33M)	($45M)	$13M	($82M)	$63M	Owner earningsOwner earn.
1.4%	10.0%	5.7%	6.2%	4.7%	17.2%	−1.5%	−2.3%	0.6%	−4.0%	2.9%	Owner earnings marginOE mgn
$21M	$188M	$104M	$117M	$87M	$396M	($33M)	($45M)	$13M	($82M)	$63M	Free cash flowFCF
1.4%	10.0%	5.7%	6.2%	4.7%	17.2%	−1.5%	−2.3%	0.6%	−4.0%	2.9%	Free cash flow marginFCF mgn
$27M	$27M	$27M	$27M	$14M	$9M	$9M	$9M	$9M	$9M	$9M	Dividends paidDiv. paid
—	—	—	$3M	$1M	$2M	$4M	$3M	—	—	—	BuybacksBuybacks
($62M)	($74M)	($57M)	($51M)	($57M)	($37M)	($147M)	($29M)	($125M)	($48M)	—	Investing cash flowInv. cash
($46M)	$94M	($60M)	($64M)	($123M)	($189M)	($114M)	($76M)	($2M)	($71M)	—	Financing cash flowFin. cash
($5M)	$14M	($14M)	($2M)	$14M	($11M)	($5M)	$1M	($100K)	$5M	—	Exchange-rate effectFX
($33M)	$293M	$34M	$60M	($14M)	$223M	($231M)	($100M)	($83M)	($150M)	—	Change in cashΔ cash
-8%	49%	41%	8%	8%	15%	9%	-1%	10%	-6%	-5%	Return on equityROE
−21%	42%	37%	3%	6%	14%	8%	−2%	10%	−7%	−6%	Retained to equityRetained/eq
											Balance sheet
$418M	$694M	$507M	$532M	$526M	$704M	$555M	$468M	$356M	$223M	$219M	Cash & investmentsCash+inv
$359M	$398M	$516M	$522M	$538M	$459M	$641M	$596M	$686M	$660M	$531M	InventoryInvent.
$93M	$116M	$112M	$145M	$118M	$153M	$199M	$229M	$250M	$231M	$179M	Accounts payablePayables
$266M	$282M	$404M	$377M	$421M	$306M	$441M	$368M	$436M	$429M	$352M	Operating working capitalOper. WC
$837M	$1.3B	$1.4B	$1.4B	$1.5B	$1.7B	$1.6B	$1.5B	$1.5B	$1.3B	$1.2B	Current assetsCur. assets
$294M	$331M	$351M	$323M	$318M	$464M	$493M	$507M	$644M	$449M	$361M	Current liabilitiesCur. liab.
2.8×	3.8×	4.0×	4.4×	4.6×	3.6×	3.2×	2.9×	2.3×	2.8×	3.4×	Current ratioCurr. ratio
$516M	$589M	$564M	$563M	$590M	$564M	$524M	$517M	$723M	$752M	—	Net PP&ENet PP&E
$380M	$380M	$380M	$380M	$380M	$380M	$380M	$380M	$382M	$382M	$382M	GoodwillGoodwill
$2.4B	$2.9B	$2.7B	$2.8B	$2.9B	$3.0B	$2.8B	$2.7B	$2.8B	$2.6B	$2.6B	Total assetsAssets
$894M	$1.0B	$800M	$794M	$789M	$653M	$560M	$547M	$563M	$592M	$588M	Total debtDebt
$476M	$349M	$293M	$262M	$263M	($51M)	$5M	$79M	$208M	$369M	$369M	Net debt / (cash)Net debt
2.1×	6.5×	6.7×	4.7×	5.1×	9.8×	8.6×	1.2×	4.2×	1.1×	1.3×	Interest coverageInt. cov.
$244M	$342M	$354M	$340M	$324M	$329M	$348M	$326M	$343M	$341M	—	Noncontrolling interestsNCI
$201M	$424M	$635M	$640M	$683M	$830M	$959M	$951M	$1.0B	$1.0B	$1.0B	Shareholders’ equityEquity
											Per share
342M	342M	28.5M	28.5M	28.5M	28.5M	28.5M	28.5M	28.5M	28.5M	28.5M	Shares out (diluted)Shares
$4.44	$5.50	$63.86	$66.58	$64.90	$80.58	$77.98	$67.43	$73.85	$72.88	$75.94	Revenue / shareRev/sh
$-0.05	$0.61	$9.20	$1.73	$1.94	$4.46	$3.06	$-0.35	$3.79	$-2.02	$-1.79	EPS (diluted)EPS
$0.06	$0.55	$3.65	$4.12	$3.04	$13.88	$-1.15	$-1.56	$0.46	$-2.88	$2.20	Owner earnings / shareOE/sh
$0.06	$0.55	$3.65	$4.12	$3.04	$13.88	$-1.15	$-1.56	$0.46	$-2.88	$2.20	Free cash flow / shareFCF/sh
$0.08	$0.08	$0.95	$0.95	$0.48	$0.32	$0.32	$0.32	$0.32	$0.32	$0.32	Dividends / shareDiv/sh
$0.17	$0.21	$2.15	$2.10	$2.30	$2.25	$2.37	$1.70	$1.08	$1.64	$1.72	Cap. spending / shareCapex/sh
$0.59	$1.24	$22.29	$22.46	$23.95	$29.11	$33.64	$33.35	$36.35	$35.90	$36.64	Book value / shareBVPS

The diluted share count moved ×1/12 into 2018 — shares retired, not a split the totals corroborate — and the per-share figures carry the counts as filed.

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+36.5%/yr	+2.3%/yr
Dividends / share	+16.7%/yr	−7.7%/yr
Capital spending / share	+28.4%/yr	−6.6%/yr
Book value / share	+57.9%/yr	+8.4%/yr

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2024

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business reported a $58M loss but ($82M) of owner earnings: $25M less than the profit line, taken out by capital spending and the timing of cash.

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	($58M)	$108M	($10M)	$87M	$127M
Depreciation & amortizationnon-cash charge added back	+$66M	+$67M	+$54M	+$59M	+$59M
Working capital & othertiming of cash in and out, other non-cash items	−$44M	−$131M	−$40M	−$111M	+$273M
Cash from operations	($36M)	$44M	$4M	$35M	$460M
Capital expenditurecash put back in to keep running and to grow	−$47M	−$31M	−$49M	−$68M	−$64M
Owner earnings	($82M)	$13M	($45M)	($33M)	$396M
Owner-earnings marginowner earnings ÷ revenue	-4%	1%	-2%	-1%	17%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 1.1×

Thin

Operating income $63M ÷ interest expense $57M

What this means
Operating profit covers interest, but with little room. A bad year, a refinancing at higher rates, or a revenue wobble closes the gap fast.
How heavy is the debt, net of cash? $375M · 5.9× operating profit

Heavy net debt

Cash $214M + ST investments $3M − debt $592M

What this means
Netting $217M of cash and short-term investments against $592M of debt leaves $375M owed, about 5.9× a year's operating profit (9.3× on the gross debt, before the cash). It also holds $6M in longer-dated marketable securities; counting those, it sits at $369M of net debt. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Is it a good business?

Return on invested capital —

Not enough data

Industry peers: median 9%

What this means
The filing data didn't include the inputs for this check.
Owner-earnings margin 3%

Thin through the cycle

10-yr median margin, range -4%–17%; latest ($82M) = operating cash ($36M) − maintenance capex $47M

Industry peers: median 5%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -4% of revenue this year, a 3% median across 10 years.
Are earnings backed by cash? ($36M)

Loss, and burning cash

Net income ($58M) · cash from operations ($36M)

What this means
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did not.

How is the cash used?

Where do the earnings go? —

No surplus to allocate

What this means
The business didn't generate positive Owner Earnings this year, so any distributions came from the balance sheet or borrowing, not from operations.
Investing or harvesting? 0.70×

Harvesting

Capex $47M ÷ depreciation & amortization as filed $66M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 4 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $2.1B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 2.80×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Pass

Debt ≤ working capital · $592M vs $810M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (10-yr record) · 3 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (10)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Miss

Earnings +33% over the record · −91%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.48/share (latest year $-2.03), the averaged base the calculator's gate runs on, and book value is $36.13/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 7 of 10

What this means
Lost money in 3 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 5 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 16% → 5% (3-yr avg ends)

In the filing’s words The filing attributes gains to higher prices, but the margin in the record has not followed — the claim outruns the result here.

What this means
Through the cycle the operating margin slipped — about 16% early to 5% lately, median 10% — competition or costs are biting in.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Worst year 2023 · 1.8% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Dividend record paid

What this means
Paid a dividend in 10 of the years on record.
How management talks about it Owner’s terms

What this means
Returns have thinned, but the filing discusses it in an owner’s vocabulary rather than selling past it — candor about a hard stretch counts for more than an adjective.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Jun 30, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$1.2B

Cash & short-term investments$212M
Inventory$531M
Other current assets$474M

Current liabilities$361M

Accounts payable$179M
Other current liabilities$182M

Current ratio3.37×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.90×stricter: inventory excluded

Cash ratio0.59×strictest: cash alone against what's due

Working capital$856Mthe cushion left after near-term bills

Revenue, latest quarter vs. a year ago+12.2%the freshest read on whether the business is still growing

Current ratio, recent quarters2.8× → 3.4×

Deeper floors

Tangible book value$662Mequity stripped of goodwill & intangibles

Debt incl. operating leases$20M$20M of it operating leases

Deferred revenue$29Mcustomer cash collected before delivery; operating float

From the company's latest filing.

How the cash was used, 2016–2025

Over the record, the business generated $1.3B of operating cash; how management split it reads as a deleverager, a meaningful share of cash went to paying down debt.

Reinvested$575M · 43%
Dividends$167M · 12%
Buybacks$13M · 1%
Retained (debt / cash)$586M · 44%

Returned to owners$180M
23% of the owner earnings the business produced over the span, $167M as dividends and $13M as buybacks.
Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span debt fell $306M and cash and short-term investments rose $48M.
Average price paid for buybacks—
Buybacks ran $13M over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count−91.7%
The diluted count fell from 342M to 29M, so the buybacks outran the stock issued to staff.
Dividend record$0.32/sh
Paid in 10 of the years on record, the per-share dividend growing about 17% a year. It was cut at least once along the way.
Return on what it retained−22%
Of the earnings it kept rather than paid out ($633M over the span), annual owner earnings (first three years vs last three) fell $142M, so each retained $1 gave back about 0.22 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Michael S. Simmons	$7.4M	$7.4M	$396M
2022	Michael S. Simmons	$9.0M	$9.0M	($33M)
2023	Michael S. Simmons	$2.1M	$2.1M	($45M)
2024	Michael S. Simmons	$2.5M	$2.5M	$13M
2025	Michael S. Simmons	$3.7M	$3.7M	($82M)

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
CEO pay ratio48:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Pension & retirement, Income taxes, Acquisitions as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Industrial Gases

The same industry, side by side on owner economics. Each column names the period it is read over, and a median resting on fewer than three years carries that count beside it; the group median at the foot is the line to read each figure against.

Company	Revenuelatest FY, USD	Gross marginmedian over the record	Op. marginmedian over the record	ROICmedian over the record	Owner earn. marginmedian over the record
LINLinde plc	$34.0B	—	21.4%	8%	16%
APDAir Products and Chemicals Inc.	$12.0B	31%	21.2%	12%	18%
TROXTronox Holdings	$2.9B	20%	7.7%	3%	4%
VHIValhi Inc.	$2.1B	22%	10.1%	25%2y	3%
MTXMinerals Technologies Inc.	$2.1B	25%	12.2%	9%	7%
KROKronos Worldwide Inc	$1.9B	21%	7.7%	11%	3%
LXULSB Industries Inc.	$615M	5%	-2.7%	-1%	-3%
LXFRLuxfer Holdings PLC	$385M	24%	7.8%	10%	5%
Group median	—	22%	9.0%	9%	5%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Valhi Inc. has delivered.

Today’s price $

Through the cycle, Valhi Inc. earns about $63M on its 3.0% median owner-earnings margin. This year’s −4.0% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($63M) Net of stock comp

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.65% 10-year Treasury (Aug 19, 2026) + 4.35 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth, delivered—

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.65%, as of Aug 19, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $63M on 28M shares outstanding, per the 10-Q cover, as of 2026-07-31; net debt $375M. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh VHI against another business →

Cite: Owner Scorecard, "Valhi Inc. (VHI), the owner's record," https://ownerscorecard.com/c/VHI, data as of 2026-08-17.

Manual order: ← VG its page in the Manual VIA →

Industry order: ← TROX the Industrial Gases chapter