The European Industrial Gas Market: East vs West John Raquet & James Barr.

The European Industrial Gas Market: East vs West John Raquet & James Barr

The European Industrial Gas Market: East vs West

John Raquet & James Barr

World Market Overview

• Industry reached c. €58Bn (US$77Bn) in 2014 • excl. equipment sales, wholesales and non-gas business

• Estimated to have grown by 2% in 2014• Mainly volume growth and pricing

• gasworld 5-year forecast lowered to 5-6% CAGR next few years (2020)• Maturity or lower project activity?

• Industrial gases EBIT is at a high• currently running at c 17% EBIT margin for Tier 1

• Tier 1 Companies: • Air Products, Airgas, Praxair, Linde, Air Liquide and TNSC

• Tier 2 Companies: • Messer, SOL, SIAD, CryoInfra, AirWater, Iwatani, Yingde, Westfalen

The East and West:



• Romania• Bulgaria• Hungary• Poland• Czech Republic• Slovakia• Latvia• Lithuania• Estonia• Belarus • Ukraine• Moldova • Russia (European)• Croatia• Macedonia• Bosnia• Slovenia

• Albania• Montenegro• Armenia• Georgia• Azerbaijan

• UK• Ireland• France• Benelux• Germany• Spain• Portugal• Switzerland• Austria• Iceland• Finland• Sweden• Denmark• Norway• Italy• Greece

Europe 2014



€17.1Bn

Western Europe

85%

Eastern Europe

15%

The East: Total Installed Capacity



GOX GAN Argon Carbon Dioxide Hydrogen0

20000

40000

60000

80000

100000

120000

140000

160000

180000

0

1000000

2000000

3000000

4000000

5000000

6000000

TPD Nm³/h

TPD

Nm

³/h



The East:

ASU Locations

Onsite/Merchant

Captive

Structure of Supply: Eastern Europe



23%

29%

44%

4%

OSP

Bulk

Packaged

Other

Structure of Supply - by Company: Eastern Europe



Messer 13%

Linde31%

Air Products9%

SIAD2%

Air Liquide 11%

SOL4%

Others 30%

€2.5Bn

The East: Aged Capacity



25+ Years 15-25 Years Up To 15 Years0

20

40

60

80

100

120

140

160

180N

o.

of

pla

nts

The West: Installed Capacity



GOX GAN Argon Carbon Dioxide Hydrogen0

20000

40000

60000

80000

100000

120000

140000

160000

180000

0

1000000

2000000

3000000

4000000

5000000

6000000

TPD

Nm

³ /h



The West:

ASU locations

Onsite/Merchant

Captive

Structure of Supply: Western Europe

26%

29%

41%

4%

OSP

Bulk

Packaged

Other



Commercial Gas Value: Western Europe



Praxair6%

Messer 2%

Linde27%

Air Products15%

SIAD1%

Air Liquide 40%

SOL2%

Others 6%

€14.6Bn

The West: Aged Capacity



25+ Years 15-25 Years Up To 15 Years0

50

100

150

200

250

No.

of

pla

nts



Romania8%

Hungary10%

Czech Republic15%

Slovakia4%

Poland 18%

Belarus1%

Ukraine3%

Baltics3%

Balkans10%

Russia27% Lithuania

23%

Estonia35%

Latvia42%

Baltic Region €0.1Bn Albania 5% Montenegro

1%

Bosnia 8%

Slovenia 1%

Croatia25%

Macedonia 12%

Bulgaria20%

Serbia28%

Balkan Region €0.4Bn

Market Value: Eastern Europe €2.5Bn

Market Value: Western Europe €14.6Bn



Finland22%

Iceland2%

Norway22%

Denmark16%

Sweden38%

Scandinavia €1.3Bn

UK11%

France16%

Benelux13%

Germany22%

Spain8%

Italy 14%

Scandinavia8%

Others8% Ireland

12%

Austria29%

Portugal23%

Switzerland31%

Greece 6%Others $1.6Bn

End User Market Forecast



2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20200

2000

4000

6000

8000

10000

12000

14000

16000

18000

Western Europe

OthersGlassHealthcarePulp & PaperElectronicsFoodGen ManufacturingMetallurgyRefining & EnergyChemicals

Year

Euro

Mill

ions

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20200

500

1000

1500

2000

2500

3000

3500

4000

Eastern Europe

OthersGlassHealthcarePulp & PaperElectronicsFoodGen ManufacturingMetallurgyRefining & EnergyChemicals

Year

Euro

Mill

ions

Growth drivers and potential challenges• Drivers for growth:

• East: Economic growth + continued roll-out of gas applications• Captive-to-onsite conversion (mainly in the East)• West: Mature market requires continued application innovation

• Environmental applications • Energy

• M&A Activity (Homecare + technologies)

• Potential challenges • Macro economic situation • Political stability (East)• Environmental legislation• Power and energy costs• Driving the “added value” proposition



Safety

• Safety remains at the core of our industry and is EIGA’s mission and

work.

• Industry engagement

• Focus areas

• Current initiatives

•New initiatives

• LegislationSource: EIGA



Conclusion

• West: growth forecast range from 1.7% to 3.4% p.a. to 2020- Maturity could result in IPI growth trend but not expected.

• East: growth forecast range from 4.3 to 5.6% p.a. to 2020 - Growth suppressed to Russia and Ukrainian economic/political issues.

• Power and energy pass-through has inflated growth in the past decade.• Our industry should be leading the environmental drive.• Captive conversion to onsite upside potential in Russia & The Ukraine • M&A activity will continue but at small/medium end of the business. • Operational efficiency savings continue – from where? • Safety remains core to the DNA of our industry



• Industrial Gas Market Reports

• Business Intelligence Online

• Business Intelligence Financial

• Capacity Databases

Business Intelligence Services



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The European Industrial Gas Market: East vs West John Raquet & James Barr.

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