gasworld Publisher, John Raquet, attended the ‘Disruption: Recognise it, Understand it, Mitigate it, Thrive through it,’ discussion at the Gases and Welding Distributors Association (GAWDA) event.

Ken Thompson, of Thompson Group, introduced the panel of experienced supply chain veterans, that included John Buzz Campbell, Jim Earlbeck, Mike Masha and Dave Manthey, who gave advice on how to tackle disruptive industry events.

He also referred to a possible disruption in the industry following the impending acquisition of Airgas by Air Liquide, and who would acquire the expected assets that would be needed to meet Federal Trade Commission (FTC) concerns.

He also referred to an earlier topic raised by George Ratermann, President of Ratermann Manufacturing, about the integration of the young and dynamic generation into a traditional business, and potential disruptions it may cause.

He then handed over to Dave Manthey, Industrial Distribution Analyst at RW Baird, to present the findings of the Baird/CryoGas international survey on the industrial gas distribution business.

Macroeconomic status

Firstly, he outlined that with regards to the macroeconomic status in the US, we have seen the third longest bull market in history. He said that the fall of 2015 was a 10% correction and that we have experienced the very low interest rates for seven years. However, the industry still suffered from inflationary pressures. It was revealed that since 2015, the industry has lost 200,000 skilled jobs.

Manthey stated, “The world is a wash with almost everything – crude oil, copper, steel, petrochemicals and so on.”

He detailed that although construction has been reasonably positive due to low interest rates, the manufacturing industry in the US is at a very low single digit rate and has remained week since the first fiscal quarter of 2013.

The Industrial Distribution survey highlighted an excess of $100bn in aggregate annual revenue, whilst the Gas Distributor survey had 30 respondents reporting total revenues of $1.8bn. Results of the overall survey as of the first quarter of 2016 showed year on year negative growth.

Gases growth sat at 2%, whilst the hard goods market experienced more volatility and was down 0.2%. However, Manthey predicted positive trends from the survey through to end of 2016. This was positive compared to general industrial maintenance and repair operations (MRO), which has been relatively flat and event went negative in the first quarter. Safety products have also been slowing but this is set to change in the second half of 2016.

Manthey concluded the panel discussion with a caution that the year will be tough and full of challenges.