Ken Thompson: Distributors expand gases-related presence


In the early 1960s, Union Carbide’s Linde Division, Airco, and National Cylinder Gas began aligning with welding supplies distributors to expand their respective presence in cylinder gases distribution. Each of the major gas producers recognised the logistics costs in serving small end users and responded by establishing networks of independent re-sellers.

To secure these arrangements, the suppliers would enter into ‘requirement contracts’ with the independent distributor owner to guarantee and promote a long-term partnership. These requirement contracts would include pledges from the distributor partner that all gases, and early on, even cylinder needs would be purchased, or in the case of some cylinders, rented exclusively from the supplier.

A lot has changed! Foremost was the recognition by distributor owners that payment of endless rental or (demurrage) was an unrealistic use of cash. Distributor companies, or their owners at ‘arms-length’ – began buying cylinders that would over the long term provide rental income that would become the most significant financial underpinning of successful distributorships.

As time passed, there would be no horizon an independent distributor would not explore. Welsco in Little Rock, National Welders in Charlotte, and American Welding and Gas in the Mountain States would own and operate small air separation plants. Distributors would build and operate generated acetylene plants. Yet the great majority would continue to secure their cryogenic and high-pressure gases from their major supplier of choice – and be bound by requirements agreements.

... to continue reading you must be subscribed

Subscribe Today

Paywall Asset Header Graphic

To access hundreds of features, subscribe today! At a time when the world is forced to go digital more than ever before just to stay connected, discover the in-depth content our subscribers receive every month by subscribing to gasworld.

Please wait...