Day one of gasworld’s South East Asia Industrial Gas Conference has drawn to a close here in Bangkok, Thailand, after exploring dynamics across the region and the rising trends shaping the face of the ASEAN market.
Over 220 delegates from 31 countries gathered at the Shangri-La Hotel in the heart of the exotic city, investigating and discussing critical topics under the conference theme of Tiger Economies and Opportunities to Roar.
No less than nine industry experts delivered engaging keynote presentations throughout the day, covering a vast array of subjects from current industry drivers to in-depth LNG discussions.
Air Liquide’s Vice-President of Southeast Asia and the Pacific Boon Hai delivered an engaging opening speech, setting the scene of the South East Asian industrial gases industry, emphasising the importance of the region on a global scale.
He stated, “In terms of the outlook of South East Asia, the numbers continue to rise with stronger growth anticipated to take place in the coming years. Growth will be led by Indonesia, as solid consumption and investment will provide a lift to the economy, whilst Vietnam will sustain expansion.”
Hai explained that ASEAN has a relatively bright economic outlook, with growth anticipated to hit approximately 5% year-on-year from 2016-2020 – outgrowing the global GDP of around 3%. “It is one of the fastest growing regions in the world and it will possibly become the world’s fourth largest economy by 2030,” he stressed.
”There are opportunities for our industry and we can turn this energy trend into opportunities for growth”
Boon Hai, Vice-President of Southeast Asia, Air Liquide
Hai highlighted three global trends that will transform South East Asia in the coming years: energy and the environment, digitisation and increasing needs in the healthcare sector.
“Our environment is changing fast – our world requires increasing energy and demand has doubled. The need to address these dilemmas give industrial gas players like us opportunities to explore; there are LNG technologies, there’s biogas, hydrogen mobility, photovoltaics, emissions controls, recycling. There are opportunities for our industry and we can turn this energy trend into opportunities for growth.”
“Digitising is an underlying trend in our lives,” he continued. “It impacts our daily lives and gives us a new way of working. As it’s everywhere, people need more sophisticated electronic components and will need more electronics – which means more opportunities for our business in the semiconductor and electronics business.”
Regional market dynamics
The conference’s first session delved into the regional market dynamics currently shaping the face of the South East Asian industry, with Joe Trairatanobhas from PrimeStreet Advisory offering an insight into the growth drivers across the ASEAN region, with a big focus on the rise and stay of LNG.
He indicated, “The Asian economy is growing really fast – close to 8-9% with inflation, in fact. We are seeing an influx, and there are dynamics between how South East Asia connects with North Asia.”
“When people ask where the growth is, I say the growth is where the population is; so Indonesia is going to grow very quickly as there is still a large portion of the population that is very young. Myanmar and the Philippines are difficult to navigate but Myanmar is going to grow double in the next five years, with the help of foreign direct investment (FDI).”
Trairatanobhas went on to say that the ASEAN shift will “really change the space” in the coming years. He continued, “If China’s prices of LNG come to this region it will really be a game changer. So, in terms of dynamics, I have seen that Chinese funding is really dominating the scene and the infrastructure developments.”
“The rise and stay of LNG really is here to stay – and it’s playing a crucial role in the ASEAN energy mix. LNG regulation, however, is still forming.”
gasworld’s Senior Business Analyst James Barr then gave an overview of the market dynamics in the South East Asia gases business, which he described as “the fastest growing gases market in the world.”
”The growth here is unparalleled compared to other markets, although that is is expected to slow in the coming years”
James Barr, Senior Business Analyst, gasworld Business Intelligence
“Since 2011, the Asia Pacific area is consistently the highest performer in terms of underlying growth. The region has given hope to the gases business in what has been a tough year,” Barr signified.
He underlined that traditional industries for gases still dominate ASEAN’s makeup of end-users, with the manufacturing, chemical and refinery sectors still playing an important role and, crucially, still growing. However, he stressed that future growth would stem from the popularity of food and beverage applications with electronic applications also expected to dominate the future scene. “A lot of Chinese companies are moving production from China into Thailand and Vietnam so we expect that to grow in the coming years,” he affirmed.
In terms of growth across the entire ASEAN region, Barr suggested that a high scenario of around 4.8% would be “realistic.”
“Traditional end users of industrial gas will continue to drive demand in most markets,” he added. “South East Asia remains the most the resilient market – the growth here is unparalleled compared to other markets, although that is is expected to slow in the coming years.”
The second session explored the impacting factors that are shaping the face of emerging markets within South East Asia such as Thailand and Indonesia.
Messer Consulting Singapore’s Director Tim Evison was next to take to the stage, as he discussed the changing demands for industrial gases in the ASEAN region, centring strongly on the idea of productivity.
He also highlighted the important role that the youth of the ASEAN region are playing, stating, “Investment and productivity are linked as they tend to encourage each other. There is a huge appetite amongst the youthful population of the region in new technologies and processes – that is all good for us.”
“Higher productivity leads to growth in GDP, which gives room for more investment and attracts new FDI.” Evison revealed that financial services company Standard Chartered named the ASEAN region as the third outperforming region in the next few years, only just behind China and India. “That is a very healthy position for the region regarding the gases industry,” he reflected.
“So, the key issue in ASEAN is that of productivity,” he continued. “There is a great appetite for technology, expertise and careful investments to avoid over exuberance and damaging situations of overcapacity. The opportunity that we have now is in technology.”
“We are seeing service demands and environmental issues go up, so demand has increased for oxyfuel applications to increase energy efficiency and reduce emissions. We are also seeing questions of exhaust gas recovery and carbon dioxide recovery to reduce operational footprint. Headlines across Vietnam have focused the need for environmental care – and the industrial gas industry is part of the solution.”
Next, Piyabut Charuphen of Bangkok Industrial Gases (BIG) delved into the industrial gases business in the event’s host city, Thailand, highlighting the importance of the Thai government’s ‘Thailand 4.0’ plan.
He explained that current growth is slow-moving, although the petrochemical, electronic and automotive industries could keep the country’s industry “alive.”
“So what can we do?” he questioned. “The new normal is sluggish growth and we will see capacity surplus and uncertainties. We are tightening more on costs – industrial gas manufacturers and players in Thailand are trying to seriously manage their costs so we can survive and produce competitive products.”
“No one company has a strong foothold in this industry and the winners are still yet to be discovered”
Rick Lai, President Director, PT SER Nusantra Energi
“Industrial gas is about focus, discipline and clearly saying and doing what we are going to acquire and what opportunities to take – this is something that we can do in the meantime to see the clear path of the clear industrial growth of Thailand in the next few years,” he suggested.
Alvin Zulkarnian of PT Cryo Services Indonesia then shared valuable knowledge into the $400m Indonesian market, which he explained was set to grow rapidly in the coming years, “There are four petrochemical complex due to grow and the automotive industry is still strong to support the overall industry in the country,” he declared.
The LNG play
Following a delicious lunch and networking opportunity sponsored by global cryogenic refrigeration system manufacturer Dohmeyer, delegates reassembled for the day’s final session which focused entirely on the subject of LNG.
As gasworld’s CEO John Raquet pointed out, “LNG for our industry is what we call ‘the grey zone.’ Many of the manufacturers in our industry make cryogenic valves, tanks and tankers, and that’s a shared technology. So, it’s a blend and the LNG industry is well worth exploring.”
Rick Lai, President Director of PT SER Nusantra Energi, kicked off the afternoon’s proceedings by enthusing, “There is an exciting industry out there called small-scale LNG. No one company has a strong foothold in this industry and the winners are still yet to be discovered.” His presentation focused on the “interesting space” that the small-scale LNG and bulk breaking sector could open up for the industrial gases industry.
The final two presentations of the day then continued the LNG theme as Sombat Lohkittivanich, Managing Director of Cryothai, explained how to cost-effectively recover cold energy from LNG regasification in the next presentation, in which he said this this could be another “important revenue stream” for the industrial gases industry. “Cold energy recovery will help the cryogenic business; it requires tanks, delivery trucks and service, so all of us will benefit,” he explained.
Hendrie Lee of LNG Easy then honed in on the synergies in using existing industrial gas facilities to distribute and store LNG as an additional business option for the industrial gases industry.
Delegates will now turn their attentions to a fine dining and networking evening tonight packed with traditional Thai entertainment, sponsored by Platinum Sponsor Cryovat and Cryotech Asia, before discovering application drivers, gas operations and safety and responsibility issues during day two of the conference tomorrow.
Follow the conference
Stay up-to-date with all the latest news, views and developments at the South East Asia Industrial Gas Conference 2016 via the gasworld website, updated throughout the two-day event.
gasworld will also be tweeting live updates during the conference, which you can follow on Twitter using the hashtag #GWSEAsia.
A full review of the conference will be published in the upcoming January edition of gasworld magazine.