Reporting on the business and technologies
driving today's global industrial gas industry

Fred Seimer, a chartered financial analyst with over 25 years in chemical and investment industries, reviews the most recent results for industrial gas and related technology companies for CyroGas International. The views of Mr. Siemer are his own and are independent of CryoGas International.

In May of 2004, we published the article \"Contents Under Pressure - The Compressed Gas Supply Chain,\" which provided an overview of the U.S. compressed gases business and its supply chain. This month\'s article, a follow-up to that feature, examines delivery costs for packaged gases- a big and (in many quarters) a poorly understood part of the cost of operating a compressed gas business.

The managing of operations focuses on managing the processes and proedures used to manufacture and distribute cylinders and related equipment. SOme producers do not call it \"operations management\" but everyone does it in order to make day-to-day delivery of their products and services. To be successful, Operations Management must integrate and take into account a company\'s financial issues, the internal and external factors which influence operational efficiency within the company, and the wider context of business strategy and competitive advantage. It must also prepare for future technology and the demands it will place on your operations.

In the Spring of 2004, CryoGas International introduced its first in a series of reports on energy issues. We began our series by outlining the macro-economic cost factors for energy in the industrial gas business. In our second report, we zeroed in on the factors behind oil price escalations and their effects on the U.S. economic recovery and on our industry. In this, our third report on energy issues, we examine the natural gas market and its impact on the industrial gas business.

There is no question about it: Merger and acquisition transactional activity picked up in 2004. Leaders LLC, which specializes in the discreet purchase and sale of privately owned businesses in the Worldwide Industrial Gas Industry, closed on almost four times as many purchase and sale transactions in 2004 as it did in either 2003 or 2002. Businesses sold in the transactions in which Leaders LLC participated ranged in size from $1 million to $84 million in revenue, and the transaction values ranged from $1 million to $155 million. Total transaction value for Leaders LLC about the purchase and sale of privately owned businesses in 2004 are intended to assist business owners make plans for 2005 and beyond.

Symbiotic aptly describes the Welco Gases-CGI Industries/Praxair Distribution, Inc. (PDI) move in 2000 to ring to in the new millennium with a merger. The merger was the perfect solution empowering the new organization to become both globally and locally oriented at the same time. Clearly, the relationship gives Welco and CGI the extended global capabilities of a major, and Praxair the unique position as the only major gas company with on-the-ground capabilities in the mid-Atlantic market.

On December 1st, 2004, the medical gas industry, represented by the Compressed Gas Association (CGA) and the Gases and Welding Distributor Association (GAWDA), met with David J. Horowitz the Director of the Office of Compliance, at the Food and Drug Administration  (FDA) and members of his staff , to discuss progress on the FDA draft of the formal guidance entitled, Current Good Manufacturing Practice for Medical Gases (cGMP). \"The FDA found that the comments submitted by the CGA and GAWDA to be extremely helpful in moving the Guidance document forward in a positive manner. While we believe the FDA has accepted many of the suggestions by the industry into the working draft of the guidance document, there are still several key issues that remain to be resolved,\" reported Bob Yeoman, Managing Director of B&R Compliance and medical gases consultant to GAWDA.

In 2004, a global economic recovery finally took hold. The recovery was led by strengthening U.S. economy and by growth in asia. Like the global economy. the worldwide industrial gas business also improved in 2004. While the effect of local currencies in 2004 (rising euro, falling dollar) makes calculating exact rates of change on a global basis exceedingly complex, by all measures, our industry had a very good year.

As part of CryoGas International\'s continuing effort to develop new editorial initiatives to probide our readership with the best in-depth and timely reporting of the business news and economic trends affecting our industry, we have expanded the scope of our coverage to include a view from Wall Street. As such, we introduce \"Wall Street Views\" by Fred H. Siemer, a Chartered Financial Analyst, who has over 25 years experience in the Chemical and Investment industries. The views of Mr. Siemer are his own and are independent of CryoGas International.

In our March \'04 issue, we defined the elements of the Merchant Bulk Supply Chain, and noted that we would review important elements of that in later articles. This piece discussed bullk liquid delivery and its costs. With overall costs for producing and delivering gases continuing to increase, distribution continues to be a significant part of the cost structure of the industrial and medical gas supply chains.

Environmental applications represent growing markets for industrial gases. Clean air and clean water discussions are now global in their nature. Industries are increasingly held responsible for both the \"before\" and \"after\" when using natural resources in their manufacturing processes. Recognizing this trend, together with the fact that industrial gases are often an environmentally friendly alternative in both combustion and clean-up operations, CryoGas International is introducing a series of articles that examine growing environmental applications for industrial gases. In this feature, we examine the market for water treatment products.

Increasing demands and decreasing suppies, have begun to move the fishing industry away from the open seas toward more sheltered shores. By turning the catch into the yield, aquaculture is playing an increasingly important role in meeting the world demand for fish as wild fish stocks are depleted. The business of raising fish in controlled environments with applied innovations in science and technology brings the promise of larger, healthier, and more predictable quantities of fish. The same kinds of environmental problems that plague intensive agriculture, however, muddy the waters of the aquaculture business. In this article, CryoGas International examines ways in which industrial gases and related technologies are being used in aqua culture to both grow the business and eliminate many of its potential negative environmental impacts.

Carbon dioxide bubbles through the U.S. economy from a selection of raw feedstocks, in a variety of places to meet the needs of diverse end-users. The mix of the raw feedstock is changing from several years ago with ethanol production and natural wells, becomeing more significant resources. Yet the issues have remained the same: carbon dioxide is one of those strange compounds that is often plentiful in the wrong places and in short supply where it is needed. These unique characteristics make carbon dioxide very different from other industrial gases.

China ASU manufacturers have come a long way since the first plant was built. This article provides a history of the ASU plant industry in China.

The industrial gas industry suffers from a number of peculiarities in terms of its target market and the factors that affect its target market. Given these marketing challenges faced by the industrial gas industry, establishing a brand identity that the average consumer can recognize and relate to is extremely valuable. So, in terms of communicating their message to the masses, are the current brands for industrial gases performing?

This article will provide some background on the complexities and the benefits involved in efficient cylinder management.

A key regional player and highly visible company, the family-owned gas manufacturer/distributor business serves Pennsylvania and parts of West Virginia and Ohio with an array of stores and gas plants. This article is a company profile written by Irma Chazotte.

The compound semiconductor market produces liquid crystal displays (LCDs), light-emitting diodes (LEDs), chip for high speed mobile communication, DVDs, CDs, printers, barcode scanners, instrumentation and more. It is more oriented to the consumer goods market than is the silicon market, and is developing rapidly in Asia with leading producers like Samsung. In this article, we review how the industrial gas industry has been targeting growth in both of these areas.

The concept is well understood: Instead of transporting banks of high-pressure or liquid cylinders to customer sites and exchanging them for empty cylinders (of course, they are never really empty), gas distributors can reduce delivery costs and customers can pay only for what they use, thanks to microbulk distribution. Microbulk provides the efficiency and economics of bulk without the site preparation work and other costs that typically go along with bulk tanks.

 Much of CGI\'s recent editorial focus and market research has centered on the expanding healthcare market for our industry and the two major categories which our industry services - the Institutional Market (hospitals, etc.) and the Homecare Market. A common observation of current levels of healthcare spending and the associated high rates of growth in healthcare costs, is that they are not sustainable. Our industry approaches this market, however, from the perspective of a large and well established service provider whose economics of scale, management, and skills, enable it to provide broader and better services at lower costs and still make a profit. In this article, we examine the different ways industrial gas companies are tapping into this burgeoning market.

Three years ago, right in the midst of the Post-9/11 economic downturn when most companies were watching every penny and waiting for the skies to clear, Tech Air began construction on a new state-of-the-art 26,000 sq. ft. automated, palletized cylinder fill plant in Naugatuck, CT to service key accounts in the metropolitan New York - Connecticut marketplace. The company lives up to its Tech Air name by investing heavily in technology with such offerings as microbulk, cryostorage systems, gas manifolds and piping, bulk system installations, and 100 percent bar-coded cylinder tracking, to better serve the bio-tech and high-tech markets of the region. This article is a company profile on the 1935 established company.

The use of carbon dioxide for enhancing oil production from mature oil reservoirs is the newest of the recovery techniques in commercial use today. Some early laboratory work and small scale field tests demonstrated the potential of the method in the late 1950\'s and into the 1960\'s but a large scale demonstration did not occur until 1972 with the advent of two carbon dioxide floods in West texas, with SACROC and Crossjet projects. In this article Melzer discusses the history and growth, physics and principals of use, distribution of projects, economics, maturity, and growth potential of using carbon dioxide in enhanced oil recovery.

This article is a recap of the industry\'s first Health Care Installation (HCI) training seminar presented by GAWDA and B&R Compliance Associates and sponsored by ACME Cryogenics. The seminare focused on the requirements for installing, comissioning, validating, and maintaining medical gas supply systems at healthcare facilities.

This year marks the 125th Anniversary of the founding of the Gesellschaft für Linde\'s Eismaschinen on June 21st, AG celebrated this historic event, in a ceremony in Munich attended by VIPs, politicians, scientists, employees, and German Chancellor Gerhard Schröder. this article is a short history of the Company.

With the current high oil prices, political uncertainty, war and terrorist activities - the Middle East is certainly in the headlines. In the midst of all this turmoil, however, there are interesting developments in the industrial gas business within the region. Whether these gas business opportunities develop at the cessation of the headline activities noted above. In the Middle East, the industrial gas business differs from the gas business in virtually every other region of the world in that it is largely controlled by private or state run enterprises, and not large multi-national gas companies. We estimate that the size of the Middle East market in 2003 is about $600 million, with major industrial gas companies accounting for only nine percent of this total.

Topping the list of energy news in June was the record setting $42 price per barrel of crude. OPEC oil ministers also agreed to raise output quotas, terrorists took aim at one of the world\'s principal oil producers, Saudi Arabia, and the average price of gasoline in the U.S. went over $2.00 a gallon. In April 2004, CryoGas International introduced its first in a series of reports on Energy Issues. Our first report covered the macro cost factors of oil and how they impact the industrial gas industry. In this second report on petroleum energy issues we will zero in on the factors behind iol price escalations and their effect on the U.S. recovery and on the industrial gas industry.

New Identity Emphasizes Commitment to Gas Industry\'s Expanding Application and Service Demands. Harsco Gas & Fluid Control (GFC), the venerable equipment supplier to the industrial gas industry with two and a half centuries of experience and the internationally recognized brand names of Taylor-Wharton, Sherwood, Structural Composites Industries (SCI), and American Welding and Tank (AWT), has reinvented itself with the launch of a new name and mission - Harsco GasServ. This article covers the company\'s three-fold strategy, market segments, alternative fuels technology, life support systems, and new products.

In this report, CGI provides an update on the current helium market worldwide and in the U.S. Today, the demand for helium is mixed, with slower growth in MRI markets and continued stagnation in fiver optics, but faster demand growtih in the rebounding welding applications area, and in electronics. On the supply side, the new crude helium enrichment unit has come on-line at the Cliffside Gas Field in the U.S. and the Bureau of Land Managment (BLM), the U.S. government agency charged with managing the Federal Helium Program, began its Open Market Sale of helium from the U.S. Federal Helium Reserve with its first crude helium auction in March of 2003.

In February of 2003, Cryogas International bagan its series of in-depth articles on industrial gas markets in five U.S. regions. These regions are the same as those defined by the Gases and Welding Distributors Association (GAWDA) and somewhat different than those defined by the U.S. Census Bureau (BuCen). With this issue, we conclude our regional report series with a recap of those five markets and a look at how the regions are doing today.

Much has transpired since we last reported on the involvement of the Food and Drug Administration (FDA) in the medical gases industry. In January of this year, Duane S. Sylvia, Senior Compliance Officer for the FDA\'s Center for Drug Evaluation and Research, commented on the need for the industry to view itself as provider of prescription drugs, not medical gases. Sylvia estimated that once the draft guidance had finished in the internal review process that it would be published in the Federal Register in the first part of 2004. However it is now expected to be published in the second half of 2004 to the first quarter of 2005.

In addition to the key issues of the guidance document and another emerging regulatory proposal from FDA, there has been recent involvement of the United States Pharmacopoeia, the quasi-government body that establishes the standards for the manufacture of a drug. All of these developments point to a continued evolution of medical gas requirements and regulations for the foreseeable future.

May has been a month to witness a significant change in the European gases industry - in terms of increase in size and a partial change in supply structure. On May 1st, 10 new countries were added to the European Union - making a total of 25 EU member States. Together (with the addition of three EFTA countries Norway, Switzerland, and Iceland), the industrial gases business grew by an additional $880 million on a 2003 market basis - making the total market for the expanded region $12.8 billion. This article reviews the different regions of Europe and their contributions to the industry.

Last month, a new Crude Helium Enrichment Unit was dedicated at the Cliffside Gas Field near Amarillo, Texas. Through the collaboration of the BLM and the CRLP, the enrichment unit was designed and constructed to process an inlet helium-bearing gas stream of up to 40 mmscfd containing two to 25 percent helium.

With this article, we introduce \"medical specialty gases\" as a new and distinct subset of our definition for specialty gases. In past articles we have broken out the very broad specialty gas market into two large categories: core specialty gases and electronic specialty gases. Medical specialty gases have always been a part of CGI\'s analyses of the core specialty gas market.

In the complex world of the industrial gas industry, gases are categorized and discussed in many ways. In this article, we explore the supply chain, history, faclilities & major players, cylinders, trucking, docking, administrative functions, and future of the packaged and compressed gas industry.

The primary instrument found in the laboratory is the gas chromatograph. Regardless of the analysis being done or the type of detector being used, the common thread is that the chromatograph requires a continuous supply of high purity gas. Autoswitch systems manifold two or more gas cylinders together to provide a primary and reserve supply of gas. This article describes the use and advantages of this system.

In the last several years, the Department of Transportation and businesses have recognized technological growth in the way of Nondestructive Testing (NDT). Nondestructive testing is a material science that encompasses nearly 30 different methods. Ultrasonic is one of the most recognized NDT methods and has found a role in industrial and medical high pressure cylinder requalification that, for nearly a century, had been dominated by hydrotesting. Since ultrasound technology is relatively new, the emphasis of this article is somewhat informative and educational.

This article will discuss safety improvements in trailer design, equipment improvements with the shear-off valve as well as other important trends such as the increased use of ISO containers and tube trailers for specialty gases as well as provide some background on the four key players in the tube trailer industry: FIBA Technologies, Specialty Trailer Leasing, Weldship Industries, and Western Sales & Testing of Amarillo.

In 2003 CryoGas International began its Regional Gas Market Report series with \"Introduction to the U.S. Regional Reports\" (February 2003). In this, our sixth report, we examine the Southwest Region, which encompasses the seven states of Kansas, Missouri, Arkansas, Oklahoma, New Mexico, Texas, and Louisiana.

This article is a company profile of the South West Region Distributor, Etox, Inc.

This article discusses the macroeconomic cost factors for energy in the industrial gas business and examines U.S. petroleum markets. It is the first of our energy series with Natural gas, electrical power, and other articles on our industry\'s energy related costs, market developments, and opportunities to follow.

This is the fifth in a series of reports on the U.S. regions that CryoGas International  introduced in 2003 as part of its expanded editorial coverage of gas markets. In this issue, we lok at the Southeast Region of the U.S.