The industrial gases sector once again experienced strong growth in 2004 – driven by increased gas volumes from end-user industries, boosted by the strengthening economies and the demand-pull from China. There was also continued acquisition activity which also had a positive impact but also there was significant contribution from the weakening US$ – which boosted sales of gas companies such as Praxair and Air Products during the year.
According to Spiritus, the leading industrial gas consultants, the gases business reached US$ 44.5 billion in 2004, up 12.5% over 2003. (The valuation of the gases business is based on sales of gases and services to the end-user industries such as refining, chemicals, steel and manufacturing).
Spiritus estimates that the underlying growth for the industry was closer to 8.5% – this reflects higher gas volumes in the existing business and a marginal improvement in pricing. We have analysed the top 7 gas companies as a guide to the performance of the industry and the growth drivers are shown in Figure 1.
Figure 1 – Growth Drivers for Top 7 Gas Companies, 2004/2003///
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