The US packaged gas business: Focusing on the high pressure cylinder business


The US industrial gas (IG) business has a unique multi-tiered supply channel made up of producers, distributors, and customers/markets. Gas producers are large, publicly held companies with national market penetration.

They supply gases directly to both distributors and to customers in all markets, via three modes based on volume requirements: on-site and pipeline (OSP); bulk and microbulk; and packaged. Independent US distributors buy gas from producers and deal mostly in high pressure and liquid cylinder gases, micro/small bulk, and increasingly, in regular bulk modes. Distributors serve regional markets; and also carry hardgoods which can be a significant component of their business.

The US distributor type business (DTB) is a major component of the US Industrial Gas business (see The US Industrial Gas Market Report – 2015, www.gasworld.com/2010788.article) and the packaged gas business represents the largest portion of the DTB business. Total US gas revenues in 2015 were $20.3bn of which $7.7bn were derived from DTB gas sales. Of total gas revenues, $7.1bn, or 35%, were derived from packaged gas sales.

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