Q1 2009 / Change and Challenges – Many a spoken word

Welcome to all our readers to my first editorial for Specialty Gas Report, some of you I have spoken to already and many others I hope to have contact with over the coming year. Firstly, I would like to thank Peter Finlay and Mike Vasilakes for all their efforts over the past years and wish them well in their future endeavors.

However ‘change’ means that from the 1^st of January I have been your new Editor and getting to grips with the needs and the aims for the magazine.

‘Change’ is something that I hope to introduce over the coming year – not too much though, as many of you like the general content of Specialty Gas Report and we have already had a new look but I feel there is more we can offer the reader – both within the United States and also internationally. And the international circulation of SGR has been growing steadily over the past four months and we expect that to continue, full well knowing that the USA is our base focus.

So while I get my feet wet in this first quarterly edition for 2009, I would like to express to you that my phone or computer is always ‘open’ to voice opinions and discuss ideas for articles and features, as well as news.

Change is a word that has been used often over the past 2-3 months! As of 20^th January, we (in the United States) have had a change of President – promising change! Well, a majority voted for Barack Obama and he is our President for at least four years and has a hard job to pull us out of the economic woes of the US. He is also promising change in the way our Government manages the country and also in the way it handles international affairs. So for ‘change’ I read ‘challenge’ as on the home front and internationally, there will be significant challenges ahead for us all.

It is not my intention to dwell on the economic crises but we, as an industry, have to recognize that we have to adapt or change to address the challenges facing us over the next few years. How ironic it seems, that some of the financial results issued by the U.S.-based companies for last year show record performances for the year (aka Praxair). However, all are now issuing warnings of a significant drop in volumes and ultimately sales revenues from mid last quarter and through into 2009, with concerns for the whole of the first half of 2009.

But are we being talked into recession? We have all seen the news and we have heard the comments from so-called experts (that never saw this happening!) and I can’t help feeling that things are not as bad as they appear, but due to the ‘doom and gloom’ fraternity – we are all scared and so people, companies and the banks are afraid to do anything.

I am one for optimism and I want to share this with you as I would like to talk our industry up, not down. Some of the gas experts out there have shown that certainly since 1980 – the overall gases industry has never declined – slowed maybe as a result of the 1981/2, the 1990/1 and the 2001/2 economic corrections – but never declined! Our industry is resilient, maybe not entirely immune to economic recessions, but resilient.

Gases cover a multitude of industries and one great attribute is that those industries, in the main, continue to consume more gases – either by volume or by value. Take the electronic gases sector – this industrial segment is very cyclical we know, but the amount and value of gases consumed continues to increase as technology develops. We hear about fab plants being mothballed at this current time, but plasma TVs, LCDs and solar panels are all in increased demand mode and all need gases. Look how much helium is being transported to South Korea, Taiwan and China for use in the manufacturing of plasma screens.

Hopefully, this will be seen in other industries. I am optimistic that President Obama will invest in the U.S. infrastructure to get public projects off the ground. I was told recently in the presentation the CEO of Lincoln Electric made at the GAWDA gathering in the Bahamas, that something like $3 trillion is needed to ‘fix’ our bridges alone – he was rubbing his hands with glee (well it was September before the skies opened up!) but he saw the potential sales.

And what about our specific interests in specialty gases, medical gases, refrigerants and other more exotic gases? Well, as we heard recently, the hospitals and home care services continue to use gases and homecare services continue to grow in the U.S., even if growth has slowed somewhat. We still need to develop more environmentally-friendly refrigerants and more importantly – use the ones we have recently developed around the world. This will increase demand for the products. 

The environment is still high on the agenda, even if it has been succeeded by financial crises, and governments are still committed to changing environmental legislation – the financial crunch may wither some commitment, but it still remains and provides our industry with a superb opportunity to lead detection, analysis and solutions to some of the causes. HazMat regs are increasing the demand for analytical tools, and they all use gases! Many of those gases are of the highest purity, or require calibration standards as well.

So, I hope you agree, change is afoot, challenges are there to be met and I believe our industry is well placed to meet them but we may have to change or adapt to do so. SGR

Ron Lucas
Ron Lucas has written on gases, equipment and technologies used in the medical, specialty, and industrial gas markets for several industrial trade publications over the last twelve years. Now, serving as editor of Specialty Gas Report magazine, he can be reached at: ron.lucas@specialtygasreport.com