For some, the oh-so-mature status of the European industrial gases market can lend itself to giving into the allure, the overtures even of the younger and more attractive growth markets around the world.
One could be forgiven for indulging in such a viewpoint, given the shadow into which it has been cast by the emergence of other, rampant industrial gas hotspots.
Just in my own time studying the industry for gasworld alone, there has been a shift in the global industrial gas order. A decade ago, Europe remained close on the shoulder of North America in the global pecking order, buoyed by a robust Western Europe market still in its prime.
In fact, the Western Europe gases business – according to gasworld Business Intelligence estimates – was worth around $22.9bn in 2011/12, an impressive figure coming off the back of a global recession (2008/9) too. Combined with Eastern Europe, industrial gas revenues of $25bn ran the North American market (including Mexico and Canada) close in terms of overall stature, when currency effects are taken into account.
Europe remains one of the biggest, most mature and significant industrial gas markets, but there’s no hiding the fact that it has been usurped in attractiveness over the last decade by growth regions like the Asia-Pacific and Middle East, both of which have been actively realising some of their vast potential.
Indeed, Europe has been unseated by the strong ascension of the Asia-Pacific region in particular in recent years; now the second-largest of the global industrial gas markets behind North America. Home to the flourishing China gases business, itself the second-largest individual market after the US and still fast-growing, the Asia-Pacific has more than its fair share of international admirers and ever-increasing headlines to match.
In 2019, gasworld estimated the Asia-Pacific market to be worth around $26.5bn, versus a European industrial gases industry valued at around $20.4bn. China alone accounts for around $11.4bn of APAC’s market.
For some, the market’s make-up as a largely Tier One-dominated region of few major players has perhaps also dampened its appeal. Compared to the often fragmented and diverse markets of many of the emerging economies, it’s easy to perceive Europe as a somewhat closed book for industrial gases.
We have to acknowledge this is a region that has been considered very mature and therefore lacking in high-growth opportunities for many years. We might describe the assessment in the region as subdued over the last decade. Europe cut its teeth and carved its niches many years ago now.
But this is a time of new niches, of new chapters being written as you read this. There are new pockets of application growth, exciting new funding and opportunities in energy and decarbonisation, and the playing field has also been shaken up by the well-documented M&A activity of recent years. The march of digital technologies and Industry 4.0 is also changing the face of the market, business models and operations.
Additive manufacturing? Europe continues to be a breeding ground for this hot topic in manufacturing. Hydrogen economy? Europe is widely recognised as leading the charge on this imperative topic, and with significant swathes of EU funding to back up the cause. Digitisation? Some of the most state-of-the-art case studies in automated filling plants are to be found in Europe, while the implementation of Industry 4.0 technologies is brisk across the supply chain in the region.
Even when it comes to global helium markets, Eastern Europe is set to be at the heart of a significant share of production in the years ahead thanks to Gazprom’s long-awaited Amur Project in Siberia.
It all adds up to a mega opportunity to make this a more progressive period for the European industrial gases business, and that’s what’s so exciting.
It’s a potentially dynamic new era for the industry in the region, with so many market drivers reshaping and reinvigorating the market. That’s not just my belief, it’s the view of many key stakeholders and industrial gas veterans in Europe. Look at the enthusiasm of Nippon Gases Europe for example; President Eduardo Gil Elejoste has repeatedly been effusive in his outlook for the Europe market in various interviews I’ve had the pleasure of having with him.
No less than enthusiastic was Sandeep Gadkary, Director of the Compressors Division at SIAD, in another recent interview for gasworld.
Gadkary has been in the role for almost two years, the last 12 months of which has been a time of considerable change in itself, due to the Covid-19 pandemic. Part of his excitement for the role derives from the regional and application expansion opportunities that SIAD has on the horizon, including the decarbonisation opportunities in SIAD’s native Europe.
These are just two examples, amidst countless others.
And look at the market moves of so many companies up and down the supply chain, all expanding their footprints across the continent and evolving their operations to capture the growth opportunities in decarbonisation alone.
As we look to gradually unlock from the worst effects of a global pandemic that has fundamentally changed how we think and do business, the European gases business is itself redefined and re-emerging. The pages of that once closed book (if it ever was) are open and actively being written before our eyes.
The international borders are slowly opening again, travel restrictions gradually easing and yet for many, perhaps the opportunities are closer to home than we might think. What better time to re-appraise the European industrial gases business today, where it’s heading, and better understand the promise ahead?
Europe Industrial Gas Summit (virtual)
Learn more about the changing face of the European industrial gases business, and the range of opportunities ahead, at gasworld’s upcoming Europe Industrial Gases Summit 2021 (virtual).
To be held on 27th April, the event will include topics from Brexit to digitisation, hydrogen to biogas and much more besides.
It also includes an opening keynote from Eduard Gil Elejoste, President of Nippon Gases Europe, and a closing keynote from Phil Kornbluth, President of Kornbluth Helium Consulting.
For more information and how to attend, visit www.gasworldconferences.com