Pat Murphy, president of Linde Americas, outlined some of the difficult economic conditions gas companies are facing internationally, the signs of growth in the U.S. despite the slow economic recovery, and the evolution of stringent gas standards in the food and beverage industry.
Murphy was the keynote speaker at the Gases and Welding Distributor Association, regional meeting in Seven Springs, Pennsylvania. In his presentation, Industrial Gas Trends and the Regulatory Environment, Murphy addressed three major geographies where industrial gases companies are facing real growth challenges: Europe, China and South America.
“Continued uncertainty in these areas has led all gases companies to look hard at capital expenditure (CAPEX) projects,” Murphy said. “All show a decrease in CAPEX/Sales ratio in 2014 vs. 2013. And, because of this challenging global environment, North America plays an even more important role in growth for all gas companies.” Murphy pointed out that, despite the choppy economic recovery here in the U.S., overall economic growth is good, but not great. “One major area where we do see substantial growth is in the petrochemical industry driven by cheap natural gas and gas liquids from shale,” he said.
The regulatory environment
Switching gears, Murphy told the gathering that more stringent regulatory requirements on gases used in the food and beverage industry present both a challenge and an opportunity for the industry. Murphy pointed out that the gases industry is trying stay ahead of both public concerns and changes in government regulations. Linde supports the Global Food Safety Initiative (GFSI) and the advancement of food safety. Linde has a Food Safety Management System in place for all bulk carbon dioxide (CO2) plants and air separation facilities supplying the food & beverage industry in North America.
Safety is paramount
In June, 2012, Linde became the first supplier to certify all of its CO2 plants to a benchmarked GFSI scheme, FSSC 22000 (Food Safety System Certification). GFSI, an organization made up of over 400 companies representing over 150 countries, has agreed on a common approach to food safety with minimum standards for Food Safety Management Systems, HACCP (hazard analysis of critical control points), product recall programs and GMPs (Good Manufacturing Practices). “U.S. Government’s goal is to make the food supply chain safer ‘from farm to fork’ ” Murphy said. The FDA Food Safety Modernization Act (FSMA), the most sweeping reform of our food safety laws in more than 70 years, was signed into law by President Obama on January 4, 2011. It covers four areas – prevention, import safety, enhanced partnerships (food manufacturers and governments agreeing to common standards), and inspections, compliance and response.
“Obviously, times are changing for producers of the gases used in the food and beverage industry,” Murphy said. “We’re in a very challenging economic environment and regulations are not getting any easier. However, the requirements are doable and in the end will make our industry a better supplier within the food chain.”
Linde North America is a member of The Linde Group. In the 2014 financial year, The Linde Group generated revenue of USD 17.9 bn (EUR 17.047 bn), making it the largest gases and engineering company in the world with approximately 65,500 employees working in more than 100 countries worldwide. The strategy of The Linde Group is geared towards long-term profitable growth and focuses on the expansion of its international business with forward-looking products and services. Linde acts responsibly towards its shareholders, business partners, employees, society and the environment – in every one of its business areas, regions and locations across the globe. The company is committed to technologies and products that unite the goals of customer value and sustainable development.