Day one of the MENA Industrial Gas Conference 2015 has drawn to a close, typified by an array of assertions about the region’s attractive prospects in the face of a challenging wider climate.
Around 275 delegates from 25 countries gathered at the Jumeirah Beach Hotel in Dubai, UAE for the event, highlighting the significance of the region to local and international companies alike.
Those delegates heard not only about the advantageous position that the region’s industrial gases industry affords, but also that there are challenges to be met if the market is to continue to realise its potential. The key challenges, it was underlined, lay largely in the industry’s own intent to invest and impact both knowledge and innovation.
From vision to reality…
After a successful and extremely well attended welcome reception sponsored by the Middle East Gases Association (MEGA) last night, and a first look at the 40 promotional booths on show at the event, the conference began in earnest today with an exploration of the merchant markets in the region.
gasworld founder and CEO John Raquet opened the conference and said, “A warm welcome to you from the 15th gases conference that gasworld has organised around the world; our fifth that we have held in the Middle East. I hope that you enjoy the next two days.”
“This is the largest event that we have put together, which is great news, but especially so during challenging times within the market. I want to welcome everybody here, because I know you have travelled from afar across various continents, as well as local countries as well. In these challenging times I appreciate that you wanted to come to this meeting and make it the success that it is.”
It was then left to the esteemed Dr. Abdulwahab Al-Sadoun, Secretary General of the Gulf Petrochemicals & Chemicals Association (GPCA, pictured), to officially open the conference. He alluded to the event’s theme of Today’s Vision, Tomorrow’s Reality with a success story of his own and a message for the record crowd.
“Inspired by the programme, I thought maybe the appropriate theme for my opening would be ‘turning a vision into a reality’. We have enjoyed a strong chemicals industry for many decades, but we have only recently been able to establish such an association (GPCA). Back in 2004 the visionary leaders from the leading petrochemical producers in the region came together, and in March 2006 launched the association. Since then we have done quite well and embarked upon a growth journey in terms of statutes and membership, and truly became the voice of the industry.”
“This also reflects the fact that our region has emerged as a global hub for the production of petrochemicals. There have been several factors that have enabled us to be where we are today, one of them being the industrial gases industry – so I thank you for your part in that success. I would like to encourage further collaboration in the future so that we can create an even more successful and sustainable chemicals industry in the future.”
The day’s first keynote presentation then came courtesy of The Linde Group’s Executive Board Member Tom Blades, discussing the challenges and potential in the Middle East healthcare business and the homecare market in particular.
Blades highlighted the differences between healthcare systems in the West and East, and the ‘alarming issue’ that is the rising cost of healthcare in the region. “The cost of healthcare in the West is climbing quite dramatically, in many countries such as the US, UK and Germany, for example, it is twice that of the rate of GDP. In the Middle East, these costs are growing at four or five times the level of GDP, and that is not sustainable,” he explained.
The discussion evolved to describe the role – and potential future prosperity – of the industry in meeting these critical healthcare challenges. “It’s important for an industrial gas company to have a relationship with the hospital not just in the gases that we provide, but in the services and solutions that we pioneer for the whole hospital environment.”
“The Care Continuum is key – when people leave the hospital, the worst thing that can happen is to be re-admitted. Linde offers intermediate care through its REMEO centres, with 24 centres in eight countries. Telehealth – the provision of various patient-based sensors - is a key enabler to the care continuum. With Telehealth we can ensure that people are getting better and not getting worse. By having people stay at home we also expect that we can reduce admission rates by up to 75% and save significant costs.”
“Yes the economy is challenging, but what we see in this region is a significant upward potential. There are abundant resources, strategic investment in downstream projects, and amenable business practices”
Concluding, he added, “I think that healthcare costs are rising in the West, and they are rising much faster in the Middle East. That translates into big opportunities for the right Care Continuums from the gases industry, and a very rewarding part of the industrial gases business in terms of helping patients.”
The stage was then set for Richard Boocock, President of Middle East, Turkey, India and Egypt at Air Products. A more than 30-year veteran of the industry with Air Products, Boocock spoke passionately about the company, its newly revised goal – to become the safest and most profitable industrial gas company in the world – and its five-point plan to achieve this.
Turning his attention to the Middle East, he affirmed the optimism for the region and its attractiveness amidst an otherwise challenging global environment, commenting, “…we believe the macro trends remain favourable amidst all of the uncertainty we have around.”
“Certainly what we see today is attractive industrial gases growth,” he added. “Yes the economy is challenging, but what we see in this region is a significant upward potential. There are abundant hydrocarbon resources, strategic investment in downstream projects, and amenable laws and business practices.”
“We see significant opportunities for operational excellence and efficiency improvement, continued movement to the sale of gas model, the development of local workforce skills and talent and, of course, Air Products will be playing our part.”
With two high-profile keynote speakers sharing their optimism for the region, the moment arrived for not one but two consultants to give their assessments. Both exuded positivity, firstly for the wider chemicals sector and secondly for the industrial gas climate. Dr. Andrew Spiers, Senior Vice-President at Nexant, explained how change is the only constant in the petrochemical industry and that even in the midst of uncertain times, sources of competitive advantage remain clear and robust in the region’s refining and chemicals sectors.
“…there are still a large volume of gases that are produced and used by the end-users themselves…if these were converted to outsourced supply, the potential would be significant”
“Yes, we’re seeing tough times at the moment with the price of oil being down, but this is cyclical so we will see a period of lower investments and that will bring the supply-demand equation back into balance – and drive future opportunities again.”
Key sources of value differentiation will be feedstock sourcing and integration, he added, while ‘keeping abreast of how technology changes things will be very important’.
Dr. Spiers also briefly touched upon the potential in Iran’s petrochemical industry, before Raquet rounded out the morning’s insights with a view of the $78bn industrial gas market (2014) from gasworld Business Intelligence.
“In the MENA region, including Turkey, Algeria, Egypt, Libya, Mauritania, Morocco and Egypt, the market was valued at around $2.5bn in 2014, dominated by the Middle East (85%),” he said. “But there are still a large volume of gases that are produced and used by the end-users themselves, so if these volumes were converted to outsourced supply, the potential numbers would be significant.”
Focusing on the merchant market in particular, a market of great relevance and indeed interest in the Middle East, Raquet explained that general manufacturing is the biggest end-user for the market, accounting for around 30% of demand. “Interestingly enough, the healthcare market represents just under 10% of the current merchant market,” he added. “But as we have seen from Tom’s (Blades) presentation earlier, healthcare has to be one of the key growth drivers for the merchant market in the years ahead.”
Raquet continued to explain that North Africa accounts for 21% of the MENA merchant market and, further still, that, “political stability would also be a key driver for growth in the MENA region, in countries such as Libya, Iran and Egypt, if it can be achieved.”
Focus on safety
Following a fine dining and networking lunch provided by Global Gas Services, delegates reassembled in the afternoon for Session Two, exploring safety standards in the Middle East courtesy of a collection of presentations from MEGA (Middle East Gases Association).
An important topic for such a rapidly developing gases market, the gravitas of the challenges ahead were emphasised by the profile of the companies represented on the speaking panel: Air Liquide, Buzwair Gases, GPCA, and Gulf Cryo. The question of how MEGA is progressing after five years of establishment was answered by speakers including:
Appropriately for the session, Izzard opened with the encouragement that, “Sometimes it is painful to get the industry in a region all lining up with a common goal – but the benefits are invaluable.”
As delegates left the conference auditorium and turned their attentions to an evening event provided by Silver Sponsor Transafe Logistics (Pre-Dinner Drinks) and Platinum Sponsor Buzwair Gases (Conference Dinner), day one drew to a close.
The conference resumes tomorrow morning, with day two tackling growth drivers for merchant markets and including a comprehensive panel of commercial presentations about the advances in technologies and applications.
Follow the conference
Keep abreast of all the latest news, views and developments at the MENA Industrial Gas Conference 2015 via the gasworld website, updated throughout the day.
A full review of the conference will also be published in the upcoming January edition of gasworld magazine.