Day one of gasworld’s North America Industrial Gas Conference 2017 has drawn to a close here in Houston, after debating dynamics across the region and the rising trends shaping the face of the North American industrial gas market.
Over 200 delegates gathered at The Westin Oaks Houston at the Galleria, in Texas’ vibrant Uptown district, exploring and discussing critical topics under the conference theme of Tackling the Rate of Change in Our Industry.
Earlier today, 10 industry experts took centre stage to engage in thought-provoking panel debate and discussion, covering a vast array of subjects from M&A activity and investment trends, to cylinder investment strategies.
Keynote Address, Corning Painter, Executive Vice-President at Air Products, introduced the first session.
Painter first came to Air Products 33 years ago, as part of the company’s Career Development Programme, and gradually rose through the ranks to become a senior-level executive. He holds a BS degree in chemical engineering from Carnegie Mellon University, and is a Certified Professional Engineer in PA.
Painter previously discussed the rate of change in the industry in an exclusive interview with gasworld (US Edition) in August 2017.
He followed this up here in Houston and reflected, “I think the rate of change we’re experiencing in this industry is actually a big opportunity for us. It’s an opportunity for literally everyone in this audience, and that’s what I really what the focus of this presentation to be on.”
“The industrial gas business is resilient. There’s something special about this industry in terms of its stability.” He continued, “It’s a very forgiving business, but if you’re not embracing the rate of change it is easy to become complacent.”
The four key industry change dynamics that Painter highlighted were, consolidation, supply mode and packaging, supply chain vulnerability and data.
The session then proceeded to explore North American Merchant Market Dynamics: What’s Driving the Market? This was chaired by John Raquet, Publisher and CEO, gasworld, and involved panelists James Barr, gasworld Business Analyst and Miguel Wheelock, Owner of AOC Mexico. The discussion focused on the consequences of the proposed Praxair-Linde merger and provided a look ahead at what future change could mean for the industry.
Barr provided the gasworld forecast for 2018. He said, “We’re expecting the market to grow to around $73bn. If we look at the position at the end of 2018 regarding the Praxair-Linde merger – and assuming divestitures amounting to approximately $3bn or 4% of the market – the new Linde Group will have a global market share of around 29%.”
“Regarding North America, we are expecting in the order of $1.3bn of divestments within the US and Canada, leaving them still the largest player in the region. We do feel though that the FTC would probably favour a sale of a required assets and business in a single package to a buyer, thus maintaining a decent sized 5th player in the marketplace.”
Session Two, chaired by Rick Kowey, Executive Vice-President & Corporate Liaison at MATHESON, explored Opportunities and Strategies for Growing Your Business. Panelists Ray Borzio, Managing Partner, Global Calibration Gases, LLC; Arc3 Gases and Joe Bernacki, Plant Engineering, CryoVation debated Make v Buy, concerns of over-supply, investment decisions and the key performance indicators for success.
First to speak was Kowey, who began his presentation with a famous quote by Jack Welch. He said, “If the rate of change on the outside of the company exceeds the rate of change on the inside, the end is near.”
“So, the question is, what are your catalysts for growth. What platforms can you bring your company into that can stimulate that growth, and can specialty gases be one of those areas that can help grow your company?”
Kowey then asked the audience whether they should make or buy specialty gases. To ascertain this, five questions must be contemplated: Do you have supportive demand? Are there under-served customers? Have you done a SWAT analysis? Do you have the right talent? And finally, does the pay-back add up?
Just before delegates turned their attentions to the conference lunch – a prime networking opportunity supported by Gold Sponsor, Dohmeyer – Founder and Director Fabian Van Damm announced the exclusive news that the cryogenic solutions company had formed a new partnership with Taylor-Wharton, an Air Water Inc. company.
Session Three, also chaired by John Raquet, discussed the changing packaged gas model. Panelists Michael Rollins, Vice-President of Global Sales & Marketing at Norris Cylinder and Hector Villarreal, President of Weldcoa, gave valuable advice on cylinder investment strategies, reducing delivery costs and gave insight into the cost of upgrading fill plants.
Rollins began by highlighting the advantages and disadvantages of ISO versus DOT. He concluded his talk by exclaiming the ‘true advantage’ of an ISO cylinder, and why it might be worth investing in.
Villarreal then stepped up to ask attendees, why is the US stuck at 200 bar? And Why don’t we move into 300 bar (4500 PSI)? He said ,”firstly, you could argue that to upgrade to 4500 psi requires you to duplicate infrastructure, cryogenic pumps, vaporisers, piping, fill manifolds, control panels, and would also involve additional training of employees.”
”However, the change would also bring many benefits to gas suppliers. For example, larger gas volume per cylinder, with the same foot print and close to similar weight (i.e. you are delivering more product per delivery) results in a reduction of delivery costs and increased revenue/profit per route. Fewer cylinders are required to sustain the same volume of business.”
Additional future savings include:
Villarreal raised one final question, “What do you do with your existing inventory? Here lies a definitive advantage – If you’re an early mover, there is a sea of opportunity for you to sell your old inventory.”
Deligates will now get ready for the drinks reception in the Grand Foyer sponsored by newly revealed partners Herose and Mack Valves, before heading up to The Roof for the Gala Dinner, supported by Platinum sponsor Taylor-Wharton. This will comprise of a sit-down international buffet with a captivating performance from Rhythm of Magic’ – a world-class ballroom dancing and magic double act featuring John Raquets’s marvellous disappearing act!
Tomorrow, the conference resumes with Session Four: Improving your ROI through Embracing Digital Technology and will begin with a panel discussion on tracking your cylinder assets.
Follow the conference
Stay up-to-date with all the latest news, views and developments at the North America conference via the gasworld website, updated throughout the event.
A full review of the conference will be published in the upcoming January 2018 editions of gasworld magazine and gaswolrd (US Edition).