Forging forward with impressive GDP growth, China is considered to be the hub of economic boom and the economy of the 21st century.
Despite the downturn, a comparably high level of GDP growth is anticipated for the People’s Republic. At the same time, this is both a budding centre for manufacturing and a prosperous industrial gases market.
At the heart of this boom is Praxair China, a subsidiary of global Tier 1 player Praxair Inc. Headquartered in Shanghai, Praxair China is the leading industrial gas supplier in the country – with over 1200 employees and a total investment of over $600m.
With such a well established eminence in the Chinese market, Praxair China is in a prime position to capitalise on the expected further growth that the country has to offer.
David Chow, President of Praxair China, has overseen consistent double-digit growth in sales and profitability since assuming the role in October 2004.
This growth has occurred at a time when China has enjoyed a boom all of its own and coincidentally, its gases market has taken giant strides forward.
Looking ahead, Chow explains to gasworld that he expects the company’s double-digit growth to continue in the next few years to come too.
“We will aim towards double-digit growth as always. With the current state of our customers it is difficult to forecast a quick recovery by them. But it is good to report to you that we have many projects in our pipeline, that stretch out to 2011,” he said.
“These new projects will bring us the double-digit growth we expect during the next few years.”
“With the economic downturn, the current year sales of Praxair China are impacted but not to the same degree as other industries. Our expected sales will continue to grow although not at the same high rate as in previous years. However, we expect this impact to be short term as our investment in new projects has not slowed down and will bring us back to double-digit growth in 2010 and beyond.”
“The overall impact,” Chow added, “has been to monitor our cost positions more closely and improve our internal efficiencies.”
Improving internal efficiencies is certainly something of a trend among the major players in our industry, as the backdrop of recession appears to provoke ever-cloudier skies.
Many companies, and indeed industries, seem to be walking on eggshells at present – so why is Praxair China so confident ahead of the next few years? And where does the company see industrial gas growth emerging?
Achieving a healthy balance between new markets and traditional end-use sectors appears to be the prudent philosophy adopted by Praxair China.
The company serves a diverse group of industries through the production, sale, distribution and value-added application of industrial gas, while also ensuring that the efficiency, cost control, and environmental performance of the customer is upheld.
Traditional sectors such as steel production represent a relatively consistent growth driver for gases, while a ‘new’ application is increasingly gaining prominence in China – that of waste water treatment.
Chow reflects, “We differentiate ourselves by providing cost effective solutions to customers. We develop innovative applications in diverse markets, to bring productivity to our customers. We are looking at new markets in pharmaceuticals, wastewater treatment and traditional markets such as combustion.”
“We focus on the fast growing segments of the industry. Wastewater treatment is certainly an emerging area that we are working hard at developing. We have made good growth at being adopted at several large wastewater treatment plants around some of the larger cities in China.”
“Praxair China possesses strong capabilities in serving the gasification, steel and water treatment industries with our customised air separation plants/pipelines, as well as accumulated expertise,” Chow eagerly points out.
“We have a good air separation plant that is the right fit for standard gasification units on the market, for example. Our long association with the steel industry has given us great insights into steel customers and their needs too.”
“The environment-friendly applications, for sure, are significant for us in the Chinese marketplace, which is addressing increasing demands for such technology to achieve sustainable development.”
Providing productivity gains
Sustainable development and the needs of the customer are indeed, important to the very fabric of Praxair China.
The company may take the needs of the fast-growing sectors to fuel its own progression, but it also gives a great deal back to the market, not least a customer-centric approach to business.
This outlook ensures that the China subsidiary delivers productivity gains for the customer, as well as increasingly important energy efficient technology, a fundamental as the 21st century unfolds.
That’s not where the company’s offerings end either. Chow describes what Praxair China gives back to the ever-growing People’s Republic market, as he says, “We offer energy efficient plants that help the energy demand requirements. Highly efficient trucks transport our products, which saves on fuel and reduces emissions.”
“We provide productivity gains at our customers, which provides them with costs savings and environmental gains.”
“These are just some of the sustainable developments we offer the market. Beyond this, our traditional methods of pipeline networks, investment in the local development zones to lower operating costs, and efficient deliveries are the qualities we bring to every project.”
It’s clear from Chow’s responses that the company is dedicated to providing a range of value-added services to the market, which leads gasworld to its next question: which markets might these services be targeted at?
China is obviously an assured hub for growth, but the Praxair footprint spreads throughout the interlinked Asia region and supports industry from Taiwan to Thailand.
Praxair China is another strong link in a robust geographical chain throughout the North and South Pacific Rims for the Praxair brand.
Chow tells us, “Praxair’s footprint in Asia extends from Korea to Thailand all the way to India. These countries are managed by separate groups. We also have operations in Malaysia, Singapore, Japan and Taiwan.”
With such a strong network across the region and an impressive portfolio of both gases and services, Praxair brings a wealth of benefits to its divisions around the world.
A Fortune 300 company with a century of history and 2008 sales of $10.8bn, Praxair Inc. is one of the largest industrial gas businesses worldwide (with operations in more than 30 countries) and is constantly advancing in technology development.
So what does this mean for Praxair China? What advantages have been imparted on the company’s operations in North, East and South China?
For President David Chow, this wealth of experience presents Praxair China with more than a few ‘prime competitive edges’.
He explains, “We value safety, reliability and quality products for our customers. It is our continued effort in these areas that separates us from our competition. We respect the needs of our customer! We make greater efforts in managing our gas product lines, so as to better satisfy the needs of a wide variety of customers covering chemical, electronics, energy, healthcare, food & beverage, metals & metal fabrication, and water treatment.”
“Our constant innovation in application technologies benefits customers in remarkable energy & cost savings, and improved environmental performance.”
“We respect each other,” he added, “and our desire to win and meet customers’ objectives
as well as each other’s need. From our CEO down to the plant operator, we share the same vision of being the best performing industrial gases company.”
This vision has spurred the company on to achieve its currently strong position in the Chinese marketplace, with a healthy handful of lucrative contracts already secured this year.
Impressive are Praxair China’s operations via 18 wholly-owned companies and 10 joint ventures. Even more impressive, is the fact that these recent contract awards have come at a time of great global economic pandemonium.
Before our interview draws to a conclusion, gasworld is inclined to find out whether we can expect to see more contracts such as these secured in the near future.
What response would we be given?
Chow is enthusiastic, yet cautious as he answers, “You will continue to see announcements from us as things develop. China is a very big country with lots of opportunities. We are working on some very big deals right now that are not ready for release yet.”
David H. Chow – A brief biography
Born in Taiwan, David Chow was educated at the University of Toronto where he received a Bachelor’s and Master’s degree in Chemical Engineering.
It was from these early days in Canada that the association with Praxair began, as Chow spent a decade working in the Praxair Canada organisation – from 1987 to 1997.
This period saw Chow progress from a role as region engineer, to national product manager and business manager for western Canada.
During 1997 to 2002, a spell in Singapore meant that Chow observed the first significant growth phase of Praxair in Asia, as business development director.
He was instrumental in all large project signings in China, India, Korea and Thailand, before briefly moving back to North America and serving as director for Praxair’s largest pipeline complex.
A return to Asia beckoned however, and October 2004 saw Chow appointed as President of Praxair China. Based in Shanghai, he is responsible for the overall growth and profitability of the Praxair businesses in China – consisting of over 25 entities.
Away from the office, Chow is happily married with three children and currently happily living in Shanghai.