The curtain has now fallen on the gasworld South & Central America Conference 2009, our first ever venture into South America, and the feedback from delegates deemed it a resounding success despite the financial pressures that exist globally at present.
Delegates arrived from all corners of the world to attend the conference, as some, including the gasworld team, flew thousands of miles to approach Santiago over the still snow-capped Andes mountain range.
Entitled The Challenges Facing the Gas Industry in a Region of Opportunity, the conference had been organised to understand more about the Latin American economy, the region’s prospects for the industrial gas business, and allow the locally-based gas companies within the region to learn from leading experts on new technology developments and operating practices.
Perhaps understandably, however, there was much discussion about the industry itself and of the global market, in light of the recent economic downturn.
A prevalent theme throughout, the message appeared clear – despite the fiscal turbulence there are plenty of positives to reflect on and the gases industry will continue to grow. Chief among the optimists was John Raquet, Managing Director of leading independent industrial gas consultancy, the Spiritus Group.
Describing the industry’s buoyancy and banishing the blues, Raquet said, “The past 2-3 months has shocked the world and great uncertainty hangs over many industries, including our own. So, may I take the liberty of suggesting that we send a strong and optimistic message out from this conference – there is still opportunity and we will roll-up our sleeves and work our way out of recession.”
“First of all, we have actually produced continuous growth over the last 25 years. Some of you might think that 2009 and 2010 does not look that bright, I also believe that some economists seem to have been talking us into a recession. It’s going to be tough, it’s going to be difficult, but our industry will still grow. Let’s not forget it is a capital intensive business, and I’ve not heard any companies saying they cannot find investment for projects.”
“Obviously the last quarter (2008) has seen a dramatic change and decline in volumes and income, but we had a strong nine months before that. Clearly there’s going to be slowdown in 2009 and 2010, but over the next five years we’re still predicting a 6.5% compound average annual increase.”
Focus on Latin America
Also reserving such optimism for the gases business in South and Central America, Raquet explained how a wealth of resources and growth drivers still exist in the region and there is room for hope, despite the economic woes.
“Referring to South and Central America,” he said, “we described this as a region of opportunity and I’m still optimistic. Energy as a growth driver is still going to continue, there is superb mineral wealth to be extracted in the region. There is large land mass to develop.”
“Drivers for growth? Growing activity in the metals sector, oil and petrochemicals, certainly there will be a trend for producing cleaner fuels, of which our industry we will be involved in. There is a long way to go to reach up to the maturity levels of the US and Canadian markets, so again, I’m optimistic that this continent still has a long way to grow. It’s going to be tough, but I think we’ll find our way out of this.”
This was a sense of positivity not lost on other delegates and speakers either. Leading figures from within Latin America provided an understanding of the region’s economy, industry and potential.
Michele Labbe, a leading Chilean economist, gave the first official presentation and painted a somewhat mixed picture – citing the financial crisis as a possible catalyst for tough times to come for the Latin American economy.
On the other hand, however, the economic upturn in the region during recent years has ensured that the region is better ‘prepared’ to deal with such situations.
Labbe explained, “We have had a global growth much bigger than we expected, the world had a boom in growth that had high levels of 3.5% during the 2007 period. The boom in the global economy also translated into a boom in the Latin American economy.”
“In addition we experienced a stage of great success for the Latin American economies because we were able to recover from high inflation rates. We went down to 3.8% inflation and in the 1990s, the inflation rate was much higher than it is now. In the past five years, the monetary authorities in Latin America were very successful in reducing inflation.”
“The growth rate had been around 5% and now in 2008 we are talking about 3.5% to 4%. By 2009 projections, there will be projections of around 2% in the global market. There could be a dramatic fall in the market growth in emerging countries, a change in emerging markets which is also affecting Latin America.”
Sanguine about the outlook ahead, Labbe continued, “We try to be really close to the international situation, however despite the problems Latin America is very well prepared right now. Why so? Because the growth in the last five years has provided us with resources to face the crisis we are facing now.”
Note of optimism
Similarly, copper mining industry insider Juan Carlos Guajardo described the status of the metals and mining industry in recent years, and seemed enthusiastic about the industry’s outlook in 2009 and beyond.
Copper mining is big business in Chile, with Latin America accounting for around 57% of the global market, and an industry of great tradition in the region.
With regard to the potential ahead, Guajardo said, “Something we all know in terms of figures, is that copper mining is practically half of revenue generated in Latin American countries. In terms of metals, Peru is very active in gold production. In terms of silver production, we see that Mexico and Chile are among the top five countries in the world.”
“In terms of copper mining, we see a special situation in Chile. The development of the mining sector in Chile since the beginning of the 1990s is what we see as very important. Production has grown by many thousands of tonnes in recent years. Chile produces a third of the copper in the world and in annual terms of course, the trend is that after the meteoric rise in levels there is a slight slow down and decrease.”
Guajardo added, “There isn’t the same level (of investment) as there had been in the recent past. We see that several of the projects have been postponed or even cancelled. In exploration projects, we see there is a significant amount of resources that have been put on hold.”
“We see the growth comes from the expansion of mines, there is very few new ‘green field’ projects. In terms of Peru there is great potential, great potential for gold, silver. We are very optimistic. There is a note of optimism for what is coming after the first part of this year, which will be difficult,” he concluded.
Reaffirming this note of optimism, was the presentation of Rick Kowey, Executive Vice President, Chief Marketing Officer and General Manager for Matheson Tri-Gas Inc.
As enlightening as it was optimistic, Kowey revealed to gasworld delegates just how important the South America region could be to Matheson Tri-Gas Inc. in future.
Keen to expand its global presence either directly or indirectly and also recognising the potential for the South America region, Matheson Tri-Gas appears determined to enter into this growing market.
Kowey uncovered this drive as he explained, “We have a renewed effort to expand our global presence of TNSC (including in South America), as we have in other parts of the world such as the Middle East and South Africa. Were willing to grow individually as a company, as well as collaboratively with our partners around the world. We fill the holes in our footprint, with collaborative relationships.”
“This is kind of a market area that we have not participated in to any large extent, so by and large our vantage point is very fresh and we see it as a very attractive market to invest in.”
Kowey not only described the company’s motivation for entering the Latin America market, but also encouraged the need to support and assist the region with the growth of its gases industry. Technology, shared knowledge, a ‘spirit of collaboration’ and an open mind were all cited as key attributes to bring to the industrial gas business in this continent.
“It is all about, really, the spirit of collaboration. Gas companies must come to South America with an open mind and the spirit of collaboration,” Kowey said.
One to ponder...
Amidst all the talk of challenges, growth potential and the performance of the industry itself, just as thought-provoking was the subject of gas associations and their role to play in the development of a region’s gases industry.
Does the South America gases business require a gas association of its own? That was the question incisively pondered by delegates and speakers alike, during the conference’s final afternoon session.
As a pre-cursor to this hot topic, Roger Smith, Technical Director for the US Compressed Gases Association (CGA), gave an insight into the role of an association and explained the CGA’s many functions. This was then followed by the question itself and the keenly anticipated views of Chilean gases group Indura.
Ahead of its generous sponsorship of the Cultural Evening’s delightful trip to the Santa Rita Vineyard, Indura provided its arguments and reasoning for a South American gas association.
Robert Keller, Indura’s Health & Safety Officer, took to the stage and first emphasised both the importance of the gases industry and as a result, the weight of risk attached throughout.
“For the gases industry, safety is a very important asset. We have risks in all aspects of the gases industry and our gases are present in plenty of different processes ranging from food and beverages to medical purposes,” he explained.
“So we are exposed to potential accidents and this affects the people, but not just them, it also affects our customers and their customers. A key aspect of any accident is that it affects the whole industry, all of us here, so we have to work together to face this issue.”
“So what is the situation in this region?” Keller asked. “We have companies working all aspects of industry and we have global interests, global activities – but all with a local risk.”
“We have cylinders with the same colour for different gases, we have operational risks. In my very personal opinion I believe that this does not speak well of us.”
Tackling the topic just as many had hoped, Keller then explained Indura’s well-qualified vision for the region. Strongly positioned as the leading independent player in the region, the company believes a dedicated gas association is a “must-have” if the gases business and its level of safety is to progress further.
Keller said, “Our proposal is to generate a local association with all the local players in the region. This would be the South American Gases Association, or in short, SAGA. This would be an eminent organisation for standardising regulations in the region.”
“We are looking ahead to the next ten years to generate a long term plan. The most important step is to have a universal direction to advance, so we will improve safety standards in the region, sharing good practices regarding operational processes. One of the main purposes of the association is to implement the commitment to safety from the different companies.”
The magnitude of establishing and integrating such an organisation is clearly not lost on Indura either. Urging that obstacles are overcome collectively for the benefit of the region, Keller concluded, “This is a big challenge, it will take a long time, I am sure it will take a lot of technical discussion and a long implementation – but it must be a goal to introduce safety in our industry and stability in the region.”
The gathering of the 120 delegates was an important opportunity for companies to debate safety, learn about technology developments, listen to companies involved in ‘state-of-the-art’ operations within our industry and find new business opportunities.
Despite the global credit crisis, most major gas companies were present but also smaller independents came to learn about what is happening on the global stage. The conference attracted delegates from more than 20 countries around the world, from locations as diverse as the US and Western Europe, India and Tanzania.
Distinguished speakers included Cryolor’s Michael Blondin, emphasising the significance of transport safety, Chart Inc.’s Carlos Pinelo, Herose’s Keith Stewart, The Linde Group’s Raghu Menon, and independent Business Consultant Eduardo Pelitti.
Popular speaker Dr Roy Irani provided two presentations over the two day event, once again engaging the audience with an exploration of the latest developments in cylinder technology and 21st century techniques for the re-qualifying of pressure vessels.
Other luminaries such as Weldcoa’s Hector Villarreal, StatoilHydro’s Henning Langas, Taylor Wharton International’s Jim Gordon (presenting an intriguing discussion about Cryo-Bio technology), Specialty Gas Report’s Henry Grieco, Cryogenic Industries’ Arturo Martinez, and Neil Amber of Universal Industrial Gases all graced the gasworld stage to insightfully present.
This created both a comprehensive and wide-ranging platform to Discuss, Debate and Network, while contributing to the overall ambience and resoundingly successful conference event.
Eminent independent Business Consultant Eduardo Pelitti reinforced the positive perceptions of fellow key speakers at the conference, with his assessment of the Drivers for Growth in South America.
Pelitti has more than 20 years experience in the gases business in South America, including spells with both BOC and Messer, and described how the industry has endured similar economic slumps before.
It is apparently not all doom & gloom and furthermore, the Latin America region has already learned its lesson where such problems are concerned.
Pelitti said, “Companies in Latin America have learned from our own experiences in the region. In Latin America we are used to adapting and not everything is bad. There will be opportunities for growth just as there has been in other crises, there will be opportunities to grow and much more.”
Pelitti added that overall, the expectation is for further growth in South America, albeit at a somewhat slower pace.
“We expect Latin America to grow and the gases industry here to grow, it will grow lesser than in the past but it will grow,” he encouraged.
The Sheraton Santiago Hotel & Convention Centre provided the solid stage for both a welcoming and memorable conference, during which a culmination of fine food, local delicacies and a friendly atmosphere was enjoyed.
The relaxing, suitably sunny grounds of the hotel played host to a charming lunch during day one of the conference, courtesy of world-leading storage and transport equipment manufacturer Cryolor.
Headquartered in Ennery, France, Cryolor provides both standard and custom-built vacuum insulated storage and transport equipment for cryogenic liquefied gases.
The company not only sponsored the first day’s lunch break, but also enjoyed a strong presence with a promotional booth and informative presentation from the charismatic Micheal Blondin.
Inox India meanwhile, kindly sponsored the second day’s lunch break, also in the grounds of the hotel, and enjoyed a strong presence throughout the event.
Focused in providing turn-key system solutions for the storage, distribution and transport of cryogenic liquid gases, Inox India was on hand to demonstrate its wealth of services through its dedicated promotional booth adjacent to the conference.
Local gases group Indura enjoyed a prominent presence at the conference and offered fine Chilean hospitality through its sponsorship of the Cultural Evening – the final swansong of a successful conference.
This was a trip to the Santa Rita Vineyard which saw delegates enjoy a tour of the vineyard and its facilities, before sitting down to fine local produce and a glass of wine or two.
Sponsors & promotional booths
The conference presented a further opportunity for equipment suppliers to sponsor promotional booths, just as had been the case in South Africa and the Middle East in previous years.
This time around, companies such as Cryostar, Cryolor, Chart Industries, Union Engineering, Inox India, Herose, Molecular Products, Taylor Wharton International, Indox Ros Roca, and ACD/Cryogenic Industries were all present to showcase their extensive product and services offerings on the sidelines of the conference.
Much networking and business opportunities appeared to be afforded down the promotional booth route, adjacent to the conference auditorium, as delegates continually occupied the space provided by companies such as Cryogenic Industries.
With a planned manufacturing, sales and service facility in Sao Paulo, Brazil, Cryogenic Industries already has a presence in South America and looked to capitalise on this platform with its sponsorship of the delegate manual and a promotional space on the sidelines of the conference.
With over 50 years of business, the group has honed the design, manufacture, sales and service of its cryogenic equipment for the industrial gas and petrochemical industries worldwide.