The festive season is here once more and with it comes all the glitz, extravagance, hype and hysteria, and love, laughter and sorrow – all in equal measure.
We’ve been very vocal here before at gasworld about the role of gases in these seasonal festivities, from the fizz that CO2 puts into our beverages, to the gases used in electronic devices and much more beyond.
As champagne corks pop over the next few days and with the advent of the New Year, CO2 for example will be most readily used and found in practically everything we do. From the beverages we drink, whether this happens to be a premium champagne, a beer or a soft drink, CO2 is often a key ingredient added.
It’s not just in beverages that CO2 contributes to our seasonal enjoyment this festive break, as everything from a frozen turkey or frozen vegetables, to packaged food products and even a fresh jar of instant coffee to nurse the hangovers are brought to us with the help of gases.
But when you look past the bonanza of consumer spending, profligacy and giving & receiving, one thinks of the other side of Christmas – as a time for peace and reflection.
And this year I’m reflecting on another solid year for the global gases business.
I caught up with a number of key industry figures at the Middle East Industrial Gas Conference in Dubai, UAE earlier this month, representing both the gas and equipment side of the business. The mood appeared to be one of cautious optimism.
Caution, emanating largely from the debt crisis in Europe and the subsequent fears that are so well documented. Caution too, that a double-dip may arise next year. But optimism was derived from the robust nature of the industrial gas and equipment market, and from the project pipelines that offer such a solid platform for 2012.
Among those I managed to spend some time with at the conference was John Raquet, founder and Managing Director of independent industrial gas consultancy Spiritus Consulting. He shared the view that barring a major economic downturn, global gases demand will continue to grow robustly through 2012 to 2015. In fact, when it came to crunching the numbers as the year-end approached, Raquet was able to project a modest 7% growth rate for the industry in 2012 – which would mean a global gases business worth around $76.5bn by close of 2012.
Giving & receiving
Christmas is a time for giving and receiving, whether it’s gifts and goodwill or love and laughter – and the industrial gas business does it’s own share of giving and receiving throughout the year.
Our industry has such a broad range of applications that it’s always lending its wares and expertise to a whole host of end-use industries and functions. In turn, one might say, these applications give the gift of demand and growth.
“Christmas is a time for giving and receiving, whether it’s gifts and goodwill or love and laughter – and the industrial gas business does it’s own share of giving and receiving throughout the year”
It’s this extensive spread of applications that is likely to ensure the gases industry continues to grow strongly in the year ahead, just as it has in 2011. While traditional growth drivers like manufacturing or metallurgy experience difficulties, sectors like healthcare offset this and pep up gas demand.
Looking at what we’ve seen this year, long-term growth drivers will undoubtedly fluctuate with the global economic situation in 2012, but a new set of growth drivers will also underpin growth in the short-term.
Just as important as a broad applications spread is a diverse geographical footprint. Those companies that balance the more mature economies of the West with the higher growth economies of the East are likely to see a more fruitful growth in their revenue streams.
Optimism for the vast potential of the rapidly emerging markets like the Middle East was also in the air in Dubai this month.
It certainly is an interesting time to be in the Middle East, for example. Sat there in a hotel room overlooking the Burj Al Arab in the Persian Gulf, one reflects on the transition underway in the region. Where once was a site for the Chicago Bridge & Iron Company to weld giant floating oil storage tankers, now stands a five-star luxury hotel, reportedly the fourth tallest hotel in the world.
If one had the necessary resources, I’m sure that would be a very different, lavish place to escape to for a Christmas holiday.
It’s also a prime example of the blossoming tourism trade in the region – a region that knows it needs to build for life after oil. This is an evolving region, and a diverse economic structure that actually belies the stereotypical perception of an oil-only based geography. The oil and gas industry still thrives in the Middle East and the investment climate downstream provides a wealth of opportunities for the industrial gas and equipment community, but a number of other factors are starting to come to the fore in the region.
There’s always been more to this strategically located geography than oil alone, but now so more than ever. Tourism, trade and a growing alternative energy sector are just some examples. LNG is also a big buzz-word; it was interesting to hear players big and small from the gas and equipment business talk with increasing interest about the LNG distribution market.
And it’s not just the Middle East that offers huge optimism for our industry. South East Asia has demonstrated good growth this year and will continue to do so in 2012 and beyond; Asia and the Indian sub-continent are buoyant; Eastern Europe shows good growth prospects; South America is flourishing; even Africa appears to at last have a good chance of following in the footsteps of Asia, with the service and manufacturing sectors beginning to emerge.
Glad tidings we bring…
All said and done, 2011 seems to have been a good year for the gases business as it continues to recover from the trough of 2009, and we can likely expect more of the same in 2012.
With a global gases industry valued at around $71bn in 2011, I understand, and that projected 7% growth rate for 2012, it’s good tidings that we bring as we move on into the New Year.
So for those of you wrapped up in the festivities in the western world, take time out to sit back, relax and indulge in some of the seasonal extravagance – because the twelve months ahead could be set to be another rollercoaster ride! Season’s Greetings one and all.