South America: Hitting new heights


Mining, manufacturing and metallurgy are all big markets in South America, and with good levels of growth reported across the region the demand for industrial gas is booming. We begin our tour of the continent with a country by country breakdown of the 2006 gas revenues, before we whisk you through what’s happening with the biggest companies in the market. Finally join us as we round off with a few thoughts about what happens next.

Brazil is one of the largest markets in the region with a GDP in 2006 estimated at $718bn. The large economy is based on agriculture, mining, manufacturing and service sectors and the World Bank estimates this grew (in real terms) by 3.7 percent in 2006.
According to the International monetary fund (IMF) and the World Bank, Brazil’s GDP by purchasing power parity Brazil has the ninth largest economy in the world and tenth largest at market exchange rates.
Gas revenues in 2006 reached $1.48 bn, a growth of 12 percent compared to 2005 figures (of $1.33bn). The markets here are dominated by sales to metallurgy and the manufacturing industry which together account for half of all usage.
The chemical industry receives around 18 percent of gases produced while other markets take small shares such as healthcare (11 percent), food (8 percent), and minor consumers such as electronics, paper and glass.

Argentina has rich natural resources, together with a highly literate population, an export-oriented agricultural sector and a large industrial base. This contributed to their strong GDP in 2006 of $329 bn and real growth of 8.5 percent during the last year. This country has seen many changes over the past century due to recurring economic crises, high inflation and mounting external debt though since 2002 the poorer sectors of society have seen an improvement.
Looking at industrial gas usage in the country, revenues in 2006 achieved a high of $0.3 bn, a growth of 19 percent against the 2005’s sales of $0.26bn. A third of the market here is for manufacturing followed by metallurgy at around 20 percent, healthcare and chemicals at 13 and 11 percent respectively. A small measure of gas products went to food applications and smaller portion still to glass and electronics.

Venezuela has a GDP estimated to be around $202 bn, which has followed the regional trend for growth with an increase of 10 percent in the last year. The country is heavily reliant on its oil revenues which account for roughly 90 percent of export earnings and around 30 percent of its GDP.
The industrial gas market in Venezuela grew 20 percent in 2006 according to figures, reaching sales of $0.14bn by year-end. As in other countries in the region manufacturing was a key consumer here (36 percent), whilst the chemicals industry came a close second with 28 percent. Halve that again and you are close to healthcare sales, which accounted for 15 percent of usage and towards the bottom end of the market smaller shares were required by food (5 percent), metallurgy (4 percent) and glass (1 percent.)

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