After the troubled times for industry brought on by the global recession, China’s Suzhou Jinhong Gas Co. Ltd has told gasworld that it is seeing strong signs of resilience in the face of the crisis.
It’s widely accepted that the global economy is now in a period of recovery, however meek or marginal, and many of the major Tier 1 players in the gases business have just recently declared a sustained return to growth in the first six months of 2010.
Consistent with this, and aligned with the burgeoning growth forecasts for the China market, Jinhong Gas is seeing signs of healthy growth in its domestic gases industry, spurred on by demand in the new energy and clean energy markets. This is balanced by a falling appetite for gases to the manufacturing industries, for example.
Yet it’s the robust medical and healthcare sectors, coupled with the new energy markets, which have both sustained and driven demand and cause room for optimism at Jinhong Gas – one of the largest local gas companies in the East China region.
Managing Director JIN Xianghua exclusively told gasworld magazine recently, “Gas demand for new energy, new technology, medical, and healthcare have shown good growth despite the recession, whilst the demand of gas and equipment in the industries that rely on export such as mechanical manufacturing and ship-building has dropped.”
“For the operation of the industry, the need for the products from large gas companies is affected. The higher the degree of reliance on customers (especially large scale on-site customers), the higher the risk – this has demonstrated that large customers could be unreliable and fragile. These negative impacts cause the gas industry to go downward, but the demand for general commercial gas consumption from industries such as medical, healthcare, and packaging remains robust. At the same time, long-term agreement has secured the supply and price and so, is beneficial to the profitability of the enterprise.”
It’s clearly a case of swings & roundabouts, as with many of the industries, applications and economies around the world. It’s just that with China, the recovery and return to previously higher levels is at a much faster pace than many other countries. And for Jinhong Gas in particular, the independent’s balanced portfolio of products and customers translates as a significant advantage in any language.
Xianghua adds, “The global recession has impact many enterprises, Jinhong is no exception, only to a lesser degree. The main business of the company is cylinder gas and we have about 2000 direct customers, more than 200 distributors, and we have a wide spread range of customers with good market segmentation.”
“During the recession, low cost is the major market factor, and compared with the international companies, we have the advantages of low cost and actually we had more customers during the adjustment period.”