CryoGas August 2015 Vol. 53, No. 08 by Gasworld Publishing LLC

The Distributor Issue / US Market Report August 2015 Vol. 53, No. 8

Reporting on the business and technologies driving todayâ&#x20AC;&#x2122;s industrial gas industry

FEATURE ARTICLES Topping the News Distributors in the News

Published twelve times a year by gasworld Publishing LLC

The US Industrial Gas Market Report 2014 Making the Most of Growing Markets By Maura D. Garvey

A Change in Packaging The Move to Microbulk By Agnes H. Baker

Six New Things Happening with Biofuels By Pat Adams

Sorting it Out with Continuous Improvement at Sky Cylinder Testing By Jonda Vance, with Scott Elliot and Erich Pfafflin

State-of-the-Art Equipment and Extra Safety Precautions Help nexAir Keeps Atop Cylinder Filling Trends By Troy Goode

How Supply Chain Operating Networks Facilitate the Buying and Selling of Industrial Gases By Ed Rusch

Four Tips For B2B Social Media Engagement By JJ Koczan

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Reporting on the business and technologies driving today’s industrial, medical, and specialty gases industries. EDITORIAL Agnes H. Baker, Managing Editor abaker@cryogas.com JJ Koczan, News and Features Writer jkoczan@cryogas.com Jon Evans, Design and Production jon.evans@gasworld.com Eduardo Pelitti, Latin American Correspondent eduardo.pelitti@fibertel.com.ar ADVERTISING & MARKETING Tim Rice, Media Sales Manager trice@cryogas.com PUBLISHER John W. E. Raquet, Publisher gasworld Publishing LLC john.raquet@gasworld.com ADVISORS John R. Campbell, President Intelligas Consulting J.R. Campbell & Associates, Inc. jrcampbel2@gmail.com www.intelligasconsulting.com Maura D. Garvey, Director of Market Research Intelligas Consulting J.R. Campbell & Associates, Inc. mdgarvey@verizon.net www.intelligasconsulting.com SUBSCRIPTIONS Print — $150 1-year Online— $150 1-year Print and Online — $240 1-year For more options and for Terms & Conditions, see gasworld.com/subscriptions Change of email address notices should be sent to trice@cryogas.com. Subscribe online at gasworld.com/subscriptions

Avec Sympathie CryoGas International is about to celebrate its 25th anniversary serving as a news and information source for the global industrial gas industry this September. We have covered the good news and the bad, but have never had to report on a direct attack on one of our industry’s facilities. We are saddened by the events in France of June 26 and express our sympathy to those at Air Products who have been deeply affected. Air Products Chairman, President, and Chief Executive Officer Seifi Ghasemi had words of sympathy for the victim of the June 26 attack at its facility in L’Isle-d’Abeau, France. He also expressed appreciation for the assistance and outpouring of support received from around the world, as the company continues to cooperate with the investigation by French and other authorities, ongoing at press time. “I am horrified and saddened by the attack on our facility in France. I believe I speak for all of our Air Products family around the world in expressing our deepest sympathies to the family of the victim of this unspeakable act,” said Ghasemi. “My heart also goes out to the people who work at the site and their families. This incident reinforces that we all need to take safety and security very seriously, every day, and remain vigilant in everything we do. I am very glad to know that all of our employees are safe and accounted for.” John Raquet, publisher of CryoGas International in the US and gasworld in the UK, commented, “Naturally all of us at CryoGas and gasworld wish all the employees and families working for Air Products in France, and particularly those working at the L’Isle-d’Abeau site, our thoughts and hopes that they recover from the shock of this appalling incident.” “As this unfortunate event unfolded, gasworld worked with the general press to educate them regarding industrial gas site terminology, as following the attack there was some sensationalist reporting going on and very misleading statements being made by reporters at the scene and in TV studios.” Here at CryoGas, we sincerely hope this was a one off incident for our industry, but we agree with Seifi Ghasemi that our industry will have to become even more vigilant and security conscious in future. Security has been increased at Air Products’ locations around the world as a precautionary measure. Soon after the attack, French authorities and emergency services arrived on site, contained the situation, and secured the area. All individuals working there were evacuated. Air Products’ crisis and emergency response teams were activated and are working closely with involved authorities. “I would like to express my appreciation for the response of the French and other authorities who reacted so quickly to our need. I would also like to express my deepest gratitude to other companies, customers, elected officials, and many other citizens of the world who have reached out to Air Products with kind words, well wishes, and offers of assistance,” Ghasemi said.

CryoGas International (ISSN-1052-0139) is published monthly by gasworld Publishing LLC., 5 Militia Drive, Lexington, MA 02421, USA; TEL: 781-862-0624; FAX: 781-863-9411; E-mail: cgi@cryogas.com. Periodical postage paid at Boston, MA and additional mailing offices. Postmaster: Please send address changes to: CryoGas International, 5 Militia Drive, Lexington, MA 02421 or trice@cryogas.com. Unauthorized reproduction is illegal. For permission to photocopy articles, contact the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, USA; Tel: 978-750-8400. For reprints, contact publisher directly. ©2015 by gasworld Publishing LLC.

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Topping the News Distributors Topping the News Leaders in Distribution

Modern Distribution Management (MDM) (mdm.com) announced the 2015 MDM Market Leaders — its annual directory of the largest distributors across sectors — and selected its Top 40 Industrial distributors. Congratulations go to Airgas, which was ranked 4th, and Gas and Supply, which ranked 30th on the Top 40 list among all distributors in the directory. MDM also announced it top choices in market leaders among Gases and Welding Equipment Distributors. We congratulate Praxair (#1), Airgas, Gas and Supply, Norco, Inc. and Roberts Oxygen Group for being honored as leaders among other industrial gas distributors. MDM’s goal is to provide an accurate picture of distribution in each sector and produces a comprehensive report in the wholesale distribution industry each year. MDM’s specialized information business provides high-level in-depth resources to executives who are in or serve the wholesale distribution industry.

Introducing Arc3 Gases

Machine & Welding Supply Co. and their sister company, Arcet Equipment Co., are excited to announce that both companies rebranded as “Arc3 Gases” (arc3gases. com) on June 15. They say this is an important and natural step to take together following their merger in the fall of 2013. With their new name, they updated their brand in a manner building upon their legacy brands and reflecting their commitment to their gas and welding customers and their industry partners. Starting in June, all company branding began to be updated — from signs to mailings to uniforms, vehicles, and so on. Machine & Welding and Arcet will continue to transact business with vendor partners and suppliers separately and will legally remain separate companies at this stage. August 2015 – CryoGas International

Airgas Awards Top Regional Branches

Airgas, Inc. (airgas.com) has announced the winners of its 11th annual National Branch of the Year awards, honoring the best of its 900 local branches nationwide, based on customer service, safety, and financial performance in fiscal year 2015. The company named two winners in both the large and small branch categories. In the large branch category, the Mid America Region’s Kingsport, Tennessee, branch and the Midwest Region’s Elk Grove Village, Illinois, branch took top honors. In the small branch category, the Great Lakes Region’s New Philadelphia, Ohio, branch and the South Region’s Fort Lauderdale, Florida, branch received this prestigious recognition by Airgas. “This year’s winners are outstanding examples of empowered local teams focused on expertly serving their customers and backed by Airgas’ unrivaled distribution platform and national footprint,” said Michael L. Molinini, Airgas

Butler Moves Thomas to McKees Rocks

Butler Gas Products Company (butlergas.com) has announced that Mike Thomas has moved to their McKees Rocks, Pennsylvania location to manage technical sales, production, and supplies purchasing. Thomas has spent years in sales and warehouse leadership at Butler’s New Brighton facility. Effective in June, he has moved to the company’s headquarters location just 27 miles south in McKees Rocks. Thomas assured his valued New Brighton customers that he is still just a phone call away. “Centralizing Mike’s talent in McKees Rocks adds 17 years of experience to our customer service team,” said President/CEO Jack Butler. “We wanted to make him more accessible to all our customers, both internal and external.”

President and CEO. “I’m proud to name Kingsport, Elk Grove Village, New Philadelphia, and Fort Lauderdale as this year’s award-winning branches. These branches exemplified Airgas’ commitment to customer service and safety while delivering outstanding financial performance in fiscal 2015.” Each National Branch of the Year winner will soon display National Branch of the Year trophies, constructed from cylinders which have been powder-coated platinum and mounted on a welded aluminum base. Like hockey’s Stanley Cup®, the trophies carry engraved bands with the winners’ names and are passed along each year to the next winners. The winning branches will also fly a “2015 National Branch of the Year” banner, and associates will receive silver Branch of the Year rings to commemorate the honor. The 30 Regional Branch of the Year winners, two in each of Airgas’ 15 regions, will fly similar banners and display a powder-coated gold cylinder trophy.

Horrigan is Weldship’s New Sales Manager

Weldship Corporation (weldship. com) announced the hiring of their new Chemical and Gas Equipment Sales Manager, Sean Horrigan. Horrigan brings over nine years of industry experience with him after being a manager at Distrigas in Everett, Massachusetts. Horrigan’s sales role focuses primarily on the natural gas and specialty chemical end of the industry. General Sales Manager Jim Cielinski notes, “Sean will be a great addition to the Weldship team. His industry knowledge and ability to meet with customer demands will be an excellent addition to our company.” Please send your news to JJ Koczan at jkoczan@cryogas.com

Projects and Applications Praxair Boosts Pipeline Supply in Michigan

Praxair, Inc. (praxair.com) will build a new air separation unit (ASU) supporting its Detroit, Michigan, area pipeline system to meet the growing demand for industrial gases from customers in the region as well

as rare gas customers worldwide. This expansion coincides with renewals of multiple existing pipeline customer agreements. The project will include the installation of stateof-the-art operating equipment and systems. The new 1,650 tons per day plant will begin operations in 2017, supplying exist-

Three Trends Driving Optoelectronics Market Growth Through 2019 Laser transmitters, CMOS image sensors, and high-brightness LEDs will be key to expansion. Over the past 15 years, strong growth in optoelectronics has been fueled by several different product categories at different times, according to the latest bulletin by IC Insights (icinsights.com). Laser transmitters for high-speed optical networks were a major growth driver before the dot-com implosion in 2001. Image sensors and lamp devices (primarily light-emitting diodes — LEDs) became star performers in the last decade, and more recently, laser transmitters have reemerged as a major growth driver in optoelectronics. IC Insights believes these three products will be key contributors to overall growth of the optoelectronics market through 2019. Through 2019, IC Insights sees these three trends driving optoelectronics market growth: High-brightness LEDs (HB-LEDs) have reached the luminous efficacy of fluorescent lights and are in a position to be a major factor in the $100 billion global lighting industry. Since the end of the last decade, strong sales of HB-LEDs have gone into backlighting systems for cellphones, tablets, LCD TVs, and computer displays, but this growth has greatly eased with penetration rates reaching nearly 100 percent in these applications. With production capacity growing, HB-LED suppliers are concentrating on cutting costs and improving the overall quality of light for general illumination products in homes, businesses, buildings, outdoor lighting, and other applications, such as automotive headlamps and digital signs. CMOS image sensors have entered into another wave of strong sales growth as digital imaging moves into new automotive-safety systems, medical equipment, video security and surveillance networks, human-recognition user interfaces, wearable body cameras, and other embedded applications beyond camera phones and stand-alone digital cameras. Fiber-optic laser transmitters will continue to be the fastest growing optoelectronics product category as network operators struggle to keep up with huge increases in internet traffic, video streaming and downloads, cloud-computing services, and the potential for billions of new connections in the “internet of things.” 4

ing pipeline customers with improved efficiency and continued reliability. The plant will also produce liquid oxygen, nitrogen, argon and rare gases for use by hospitals, food processors, and industrial companies, including the automobile industry. “We understand that efficient and reliable supply of industrial gases to our customers’ operations in the area is critical to their success and our expanded capacity will continue to help us meet growing customer needs,” said Joe Abdoo, Central Region Vice President of Praxair’s US industrial gases business. “Our investments in the greater Detroit area are possible, in part, because local and state government officials and DTE Energy understand our business and have helped support Praxair in Michigan.”

Essex Industries Gets Exclusive Deals

Essex Industries (essexindustries.com) of St. Louis, Missouri, signed two exclusive distributor agreements to support international sales efforts for their line of Emergency Breathing Equipment. Safari Aviation, located in the United Arab Emirates, is the exclusive Essex distributor in UAE, Saudi Arabia, Jordan, Lebanon, Oman, Kuwait, Qatar, Bahrain, Egypt, Turkey and Iraq. Avio-Diepen Hong Kong has exclusivity for Essex products in South Korea, India and Japan (All Nippon Airways).

Essex Industries’ Emergency Breathing Equipment.

Founded in 1947, Essex Industries is a leading supplier to the Aerospace and Defense market, providing platform controls, aircraft components, emergency breathing equipment and liquid oxygen systems for life support and ground support systems. August 2015 – CryoGas International

Projects and Applications Air Products Generates Hydrogen for GTP

Air Products (airproducts.com) continues to meet the growing hydrogen demand of Global Tungsten & Powders Corp. (GTP) with the first installation of its new PRISM® PHG830 hydrogen generator. The PHG830 is now onstream at GTP’s manufacturing facility in Towanda, Pennsylvania, where the two companies held a ribbon-cutting ceremony to celebrate the successful completion of the project. The newly expanded range of Air Products’ PRISM technology demonstrates the flexibility of this highly efficient and economical supply option for the on-site generation of hydrogen requirements up to 5,000 nm3/hr. “We value the trust and confidence GTP has placed in us to continue meeting their increasing hydrogen requirements in the most reliable and economical way,” said John Robinson, General Manager, Industrial Gases, North, at Air Products. “The new PRISM PHG830 hydrogen generator combines Air Products’ proprietary reformer technology with our hydrogen pressure swing adsorption capabilities to bring GTP the lowest cost hydrogen available in this production range.” “Air Products has been supplying hydrogen to GTP for more than 30 years, and this is an important material to facilitate our tungsten reduction processes here,” said James Morse, director of Manufacturing Services at GTP. “It is reassuring to work with a gas supplier who understands our business and has the technical innovation and supply flexibility to meet our increasing product demands in the lowest-cost way possible.” Look For: CryoGas International’s November issue, which focuses on industrial gas use in the electronics industry.

Please send your news and story ideas to jkoczan@cryogas.com

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Company News Air Liquide Launches New Site

As part of a revamping of its online presence, Air Liquide has launched its new airliquide.com website. The preferred point of entry into the Air Liquide universe on the web, the site functions like a hub where users can find all sorts of useful information rapidly. It uses the new opportunities that digital offers to present in an educational and innovative way the full spectrum of the Group’s activities as well as its innovation and value creation. User centric, simplified and immersive, the site was designed by analyzing the paths of its various audiences in order to serve them more efficiently. Numerous enhancements are proposed in the form of videos and infographics, not to mention testimonials, illustrations, and stories to get to know the Group better. At the heart of the new website, Air Liquide’s innovation approach is highlighted through an entirely new experience that takes users inside specific examples of innovation. The site also innovates in terms of the services for the Group’s shareholders, featuring a space they can customize according to their preferences. The new airliquide.com is connected to social networks and provides an optimal user experience depending on the device being used, whether PC, tablet or smartphone.

Jones Promoted to Cyl-Tec Sales Director

Cyl-Tec, Inc. (cyl-tec.com) recently promoted Erica Jones to Director of Sales. Jones will be tasked with managing overall sales strategies for growth, developing relationships with clients, and overseeing the regional sales managers. Prior to her promotion, Jones spent time as the Regional Sales Manager, East for Cyl-Tec, which provides the industry with a full line of high quality cylinders and related supplies to the packaged gas industry, including high pressure steel, aluminum, acetylene, and cryogenic cylinders.

MATHESON Wildlife Habitat Recognition

The MATHESON (mathesongas.com) New Johnsonville, Tennessee, facility has created an official Certified Wildlife Habitat™ that is recognized by the National Wildlife Federation® (NWF). The Wildlife 6

Habitat program celebrates efforts to create and improve wildlife habitats with sustainable natural food sources, clean water, cover, and places to raise young. The New Johnsonville facility is one of MATHESON’s largest, and is a Center of Excellence for Specialty Gas Manufacturing. The world class facility performs cylinder prep, specialty gas manufacturing, blending, purification, filling, and distribution. High purity mixtures, calibration mixtures, EPA Protocol mixtures, and gases for electronics fabrication are produced at the facility. MATHESON’s Sustainable Environment policies led to participation in the NWF Wildlife Habitat certification program. Nestled in rural Tennessee, the New Johnsonville production facility is part of a large natural ecosystem. In parallel with certification as a Wildlife Habitat, the facility also boasts environmental safeguards and technology for emission control and abatement. As a part of a 2010 facility expansion, the NJV plant rerouted a 2,000 ft. section of Little Dry Creek, a tributary to the Tennessee River. The facility also created

wetland areas for storm water runoff. The work was performed with oversight from the Tennessee Department of Environment and Conservation.

MATHESON Wildlife habitat in New Johnsonville, Tennessee.

A stream restoration contractor designed and oversaw the creation of the rerouted stream, and native trees and vegetation were planted in the riparian area. The area was monitored by a biologist for five years to ensure that the stream was recovering

IN MEMORIAM… Len York, Former President and CFO, Taylor-Wharton Len York, of Long Beach, California, former President of Taylor-Wharton Cryogenics and CFO of Taylor-Wharton International LLC (taylorwharton.com) passed suddenly of a heart attack on May 16. He was 65 years old. Len was Managing Director and Founder of York & Company started 1990 which focused on corporate restructuring, interim management, business process improvement, and strategic planning. In addition to his positions at Taylor-Wharton, Len held senior leadership positions with automotive, Len York, Former President and marine, and steel manufacturing companies inCFO, Taylor-Wharton cluding Cornerstone Propane, Nichols Brothers Boat Builders, and Prometheus Energy. The family has asked that in lieu of flowers, a donation be sent to the Fisher House Foundation of Long Beach, CA (fisherhousesocal.org). The foundation is best known for a network of comfort homes where military and veterans’ families can stay at no cost while a loved one is receiving treatment. Donations can be made online or via check to Fisher House Southern California, Inc. at P.O. Box 110, Long Beach, CA 90801. Please indicate the donation is “in memory of Len York.” August 2015 – CryoGas International

Company News from the relocation. “The natural areas of the New Johnsonville facility are very enjoyable to walk past when outdoors. Since the stream was relocated during the plant expansion, it has been great to see it become an established habitat for native Tennessee species,” said James Murphree, MATHESON’s Director of Environmental Compliance. “Providing a home for wildlife in our communities — whether it’s at home, or in schools, businesses, or parks — is the demonstration of a healthy and active ecosystem. There is no more rewarding way to stay connected to nature right outside your door,” said David Mizejewski, naturalist with the National Wildlife Federation.

Lincoln Launches Welding Magazine

Lincoln Electric (lincolnelectric.com) announces the release of a new quarterly publication, ARC Magazine, to appeal to anyone interested in or connected to welding and metalworking and the lifestyle as-

August 2015 – CryoGas International

IN MEMORIAM… Andrew Ratermann, Former President, Bakers Welding Supply Andrew Longuemare Ratermann passed away peacefully May 25, 2015, at the age of 89. At the age of 16, Andrew began working for the FBI as a desk clerk Andrew until he joined the US Air Force in 1942. He served until 1946 as a flight Ratermann engineer for B-14, B-17, and B-24 bombers during WWII. After his time in the service, Andrew worked for Aerojet Engineering in Azusa, California. He earned his Bachelor’s degree in Mechanical Engineering from the University of California, Berkeley in 1954. After graduating and working for Union Carbide for over a decade, Andrew became the Product Manager of Linde Power Supply Division in Florence, South Carolina. Andrew became President of Linde’s wholly owned distributor, Bakers Welding Supply in Bakersfield and Fresno, California. In 1977, he became the president and owner of Gerin Welding Sales in Santa Clara, California, until his retirement in 1996. During his career in the gas and welding industry, Andrew was revered for his charisma and leadership. A native of El Paso, Texas, Andrew met his beloved wife, Lucille (O’Dea) in Sacramento, California. They married in 1948 and had two sons, Andrew and George. The elder Andrew was beloved by his grandchildren, Andrew, Katie, Mary, William, Marie, and Molly, who knew him best as Grand Poobah. In lieu of flowers, memorials may be made to the American Cancer Society online or sent to 1545 River Park Dr. Ste. 100, Sacramento, California, 95815.

Company News sociated with the trade. According to the company, ARC celebrates the passions of the many people who weld, cut and shape metal every day, with interviews with some of the most recognized names in the field, and feature articles that will inspire them creatively and professionally. For new welders, ARC makes welding more accessible, less intimidating, and provides tips that can help them improve skills faster. For seasoned practitioners, ARC offers advanced techniques to further develop their craft. When asked why Lincoln has invested in this effort, US Marketing Communications Manager Craig Coffey responded, “ARC provides readers a window into the lives and businesses of some of the celebrity welders/fabricators that we’ve built relationships with over the years, as well as highlighting some of the great organizations we support.” Bruce Chantry, Director of Marketing, North America, added, “We’re always seeking to gain a deeper level of brand engagement through knowledge sharing, whether it’s by publishing a maga-

zine like ARC, via our Facebook pages, or through instructional videos like those found on our YouTube channel.” ARC Magazine will be published in printed format and be available primarily through its distribution channel. An enhanced, tablet version featuring video and additional content can also be found in the Lincoln Library App, available through Google Play and Apple’s App Store.

Sherwood’s New Website

Sherwood Valve LLC has announced a newly updated website at sherwoodvalve. com with expanded product information, a user-friendly graphic interface, and resources organized by end markets: Compressed Gas, Specialty Gas, HVACR, Cryogenics, Alternative Fuel, and Life Support Valves. The site also boasts: An improved user-friendly design and navigation; dynamic featured product content to be updated regularly; a news page with categorized and searchable content; and mobile-optimized pages for improved viewing across multiple devices.

Subscribe to CryoGas’ Print and Online Editions and receive the Specialty Gas Report quarterly supplement, all for one low price of $240. Visit gasworld.com/subscriptions

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August 2015 – CryoGas International

Financial News Chart to Acquire Thermax

Chart Industries, Inc. (chartindustries. com) announced it has entered into a definitive agreement to acquire Thermax, Inc. (thermaxinc.com), a vaporizer manufacturer headquartered in Dartmouth, Massachusetts. Terms of the transaction were not disclosed. Thermax has current annual revenue of approximately $25 million, and is a leading provider of cryogenic fluid vaporizers utilized in industrial gas, petrochemical, and liquefied natural gas applications. The product portfolio spans a broad set of ambient and powered vaporizer solutions. “We are pleased to welcome Thermax into the Chart D&S family. The vast majority of cryogenic installations have a gaseous end use requirement. Having a comprehensive vaporizer portfolio complements our storage products and facilitates providing complete system solutions,” commented Tom Carey, President of Chart D&S. He continued, “Thermax’s excellence in cryogenic engineering and customer service is a great cultural fit with Chart’s core values. We are delighted that Bob Bernert, President of Thermax, his management team, and all current employees are expected to remain with the business to ensure continuity.” Bernert added, “Thermax has partnered with Chart for many years. My management team and I view this transaction as an extension of that partnership and a great opportunity to reach new customers and new markets faster than on our own. This acquisition creates growth opportunities for Thermax that are very exciting for all of us.”

Lincoln Expands Welding & Marking Offerings

The Lincoln Electric Company (lincolnelectric.com) has acquired all intellectual property related to laser welding and marking systems produced by Process Equipment Company (PECo) (peco-us.com), located in Tipp City, Ohio.

Going forward, the company’s Wayne Trail subsidiary will assume responsibility August 2015 – CryoGas International

LEADING ECONOMIC INDICATOR HEATS UP The Chemical Activity Barometer (CAB) (americanchemistry.com/Jobs/CAB), a leading economic indicator created by the American Chemistry Council (ACC), increased by 0.7 percent in June, followed by a similar Chemical Activity Barometer VS gain in May, and an upwardly revised 0.5 Industrial Production Index percent gain in April. The pattern represents an acceleration of productivity not % Change Year-over-Year (3MMA) 20 seen since the first quarter of 2011. Data 15 is measured on a three-month moving 10 5 average (3MMA). Accounting for adjust0 ments, the CAB remains up 3.7 percent -5 -10 over this time last year, also an acceler-15 -20 ation of annual growth as compared to -25 the first half of 2015. 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 The Chemical Activity Barometer has Recession Industrial Production four primary components, each consistChemical Activity Barometer ing of a variety of indicators: 1) producSource: American Chemical Council tion; 2) equity prices; 3) product prices; Figure 1 and 4) inventories and other indicators. During June chemical equity process, product prices, and inventory all improved. The Chemical Activity Barometer is derived from a composite index of chemical industry activity, which include industrial and specialty gases. The chemical industry has been found to consistently lead the US economy’s business cycle given its early position in the supply chain, and this barometer can be used to determine turning points and likely trends in the wider economy. Month-to-month movements can be volatile so a threemonth moving average of the barometer is provided. This provides a more consistent and illustrative picture of national economic trends. To better understand shifts in the business cycle it’s important to distinguish between leading, coincident, and lagging indicators of the cycle, which essentially reflect the timing of their movements: • Leading indicators (average weekly hours, new orders, consumer expectations, building permits, stock prices, etc.) are those that consistently turn before the economy does. • Coincident indicators (employment, industrial production, personal income, business sales, etc.) turn in step with the economy and track the progress of the business cycle. • Lagging indicators (inventory-to-sales ratios, change in unit labor costs, C&I loans outstanding, etc.) turn after the economy turns, thus playing a confirming role. The three types of indicators are important in their own right although most attention is played to the role of leading indicators because they tend to shift direction in advance of the business cycle. Why is it critical? The CAB provides earlier forecasting; determines turning points and likely future trends of the wider US economy; identifies shifts in other industries within the US economy; and highlights the industry’s role in driving economic growth.

for servicing and supporting the installed base of PECo laser welding and marking systems. Wayne Trail has also expanded its existing team of laser processing experts by hiring key PECo personnel, which will help provide a seamless transition for existing customers. John A. Campbell, General Manager of Wayne Trail, commented, “Wayne Trail

is fully prepared to meet the needs of the automotive powertrain laser welding and processing industry, both domestically and internationally. We have already been awarded laser welding system contracts from transmission gear manufacturers and are currently developing solutions for other powertrain components, including transfer cases and drive axles.” 9

Energy News Fuel Cells for Rural Education

As leaders in the field of hydrogen technology, Air Products South Africa (airproductsafrica.co.za) is one of the key partners in a pilot project which aims to enhance the quality of learning and teaching in remote, rural schools. The pilot project forms part of the Technology for Rural Education and Development (TECH4RED) project, initiated by the Department of Science and Technology (DST) in 2012, and has resulted in a powerful public-private partnership (PPP) which is using science, technology, and

L –R: Andrew Hinkly, Executive Head Marketing of Anglo American Platinum; Mike Hellyar, Managing Director, Air Products South Africa, and Minister of Science and Technology, Naledi Pandor.

innovation to bring about an effective and efficient rural education environment. Central to the TECH4RED project is the use of hydrogen fuel cell technology to provide backup power for electronic equipment, notably tablets, which have been introduced to schools in the Cofimvaba district of the Eastern Cape for both teachers and learners. Anglo American Platinum sponsored three platinum-based fuel cell systems, including installation and ongoing maintenance and operations. Air Products is supplying the hydrogen fuel requirements, while Clean Energy Investments (a South African company coowned by the DST and Anglo American Platinum) commissioned the fuel cells to bring backup power to the schools. “We are very honored to be a part of this groundbreaking project. It exemplifies our capabilities in hydrogen-based technologies; and points to a more energy-efficient future that is in line with the global drive to reduce carbon emissions,” says Mike Hellyar, Managing Director of Air Products South Africa. “This initiative also speaks to our corporate social investment (CSI) vision which

remains focused on the youth, and finding ways of opening the door to better quality education.” The hydrogen fuel cell pilot project, officially launched on June 12 at Mvuzo Junior Secondary School in Cofimvaba, Eastern Cape, is an important milestone along the road to introducing commercially viable fuel cell technology in South Africa. Globally, Air Products has made vast strides in hydrogen-based technology as an alternative fuel source. In the United States, for example, the company now has multiple hydrogen refueling stations in California. For Air Products, hydrogen technology has increasing relevance in the South African context. “Fuel cells provide a compelling answer to numerous socio-economic challenges we have in this country, particularly when it comes to backup power supply,” says Sizwe Nkonde, General Manager of Packaged Gases at Air Products South Africa. “Hydrogen fuel cells provide a stable power environment which is not at risk of theft and they are also much quieter than generators, making them non-disruptive and conducive to a learning environment.” He notes that hydrogen technology has

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FuelCell Energy, Inc. (fuelcellenergy.com) announces affordable on-site generation of high purity hydrogen for transportation and industrial applications using commercial fuel cell power plants. A megawatt-scale FuelCell Energy hydrogen delivery system can generate more than 1,200 kilograms of hydrogen per day, suitable for larger industrial applications, while also producing two megawatts of ultra-clean electricity. The hydrogen and power is generated in a low carbon manner when operating on natural gas, or is carbon neutral when utilizing renewable biogas as the fuel source. “Our commercial distributed power generation solutions are configurable to provide multiple value streams including high purity hydrogen along with ultra-clean electricity and usable heat,” said Chip Bottone, President and Chief Executive Officer, FuelCell Energy, Inc. “Resiliency of supply is enhanced with our affordable onsite delivery system, delivering power and hydrogen independent of external events that can interrupt the electric grid or surface transportation network.” The company says hydrogen production cost from megawatt-scale fuel cell plants is cost-competitive versus delivered hydrogen for industrial users and compared to the cost of gasoline for transportation uses. Pricing will depend on the location of the installation, value of the electricity produced, and the cost of fuel for the fuel cell power plant.

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What looks like a golf cart and is capable of pulling 40,000 pounds of cargo, while operating quietly with zero emissions? The world’s first hydrogen fuel cell-powered ground support vehicle is what. A ribbon-cutting ceremony held at Memphis International Airport on April 9 marked the start of a two-year demonstration of the world’s first zero-emissions, hydrogen fuel cell-powered ground support equipment. August 2015 – CryoGas International

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Energy News Over the two years of real-world operation at Federal Express’s airport hub location, the 15-vehicle fleet is expected to save more than 175,000 gallons of diesel fuel and 1,700 metric tons of carbon dioxide. There are more than 60,000 ground support equipment trucks in North America, representing an important market and opportunity to offer further energy and environmental benefits at airports. Latham, New York-based developer Plug Power (plugpower.com) provided the fuel cell systems, which were integrated into the cargo tugs of leading airport utility vehicle developer Charlatte America; hydrogen is supplied by Plug Power’s hydrogen delivery systems. The project is funded through a $2.5 million grant from the Energy Department’s (DOE) Fuel Cell Technologies Office (FCTO), with a matching $2.5 million cost share from private sector partners. Previous hydrogen and fuel cells R&D funded by DOE has resulted in more than 500 patents, 40 commercial technologies on the market, and 65 emerging technologies anticipated to be in the market in three to five years. Other early market applica-

tions enabled by DOE funding — such as fuel cell-based forklifts and backup power — have already resulted in an increase in industry deployment of five to 10 times without DOE funding.

Quantum Gets Linde Business

Quantum Fuel Systems Technologies Worldwide, Inc. (qtww.com) has received multiple orders from Linde North America to develop and manufacture additional retail hydrogen fueling dispensers for California’s hydrogen fueling infrastructure. Delivery date is targeted for 4Q15. “We are excited by California’s commitment to further develop the hydrogen highway, and pleased to be working alongside Linde in furtherance of this effort,” said Brian Olson, President and CEO of Quantum. These hydrogen dispensers will incorporate new enhancements to the software and hardware that will allow the user experience to be increasingly friendly while continuing to enhance accuracy and performance. They will meet the revised SAE specifications and OEM expectations for fast fill performance and accura-

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Fuel Cell Park Proposed

FuelCell Energy, Inc. (fuelcellenergy. com) together with O&G Industries, a leading construction company in the northeast United States, and CT Energy & Technology LLC, the project developers, announced a proposed 63.3 megawatt fuel cell park in Beacon Falls, Connecticut. The project, known as the Beacon Falls Energy Park, will be the world’s largest, if built as designed. The project was recently presented to Beacon Falls officials during a special meeting by O&G Industries and CT Energy & Technology. Under a letter of intent, FuelCell Energy has been identified as the fuel cell supplier, and if the park becomes operational, is expected to be retained to operate and maintain the plants under a long-term service agreement. O&G Industries owns the property. CT Energy & Technology is developing and will own the project. The electric grid interconnection study is in process with ISO New England and site EdwardsGroupis2014_cgi 7/1/14 stages. 4:14 PMNext Page 1 engineering in advanced KAIZEN/Continuous Improvement

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Energy News steps are to finalize the off-taker of the power and prepare contracts. “Returning a former sand mine site to the tax rolls is solid economic policy, and doing so with unobtrusive fuel cells that are clean and quiet and built in Connecticut is very compelling,” said William Corvo, President of CT Energy & Technology, LLC. “We have constructed and are operating plants at hospitals, universities, and a 15 megawatt utility-owned fuel cell park in Bridgeport, Connecticut, generating clean and reliable power,” said Chip Bottone, CEO, FuelCell Energy, Inc. “This project is an effective approach to utilize private capital for improved grid resiliency, contributing materially to achieving the State’s RPS goals, and reducing volatility of electricity prices.” The fuel cell park and substation will only occupy approximately eight of the 23.8 acres of land available. This low land requirement illustrates the advantage of fuel cell parks. By comparison, intermittent solar needs about 10 times as much land for the same number of megawatts but produces power on average over the

August 2015 – CryoGas International

course of the year for only 4.2 hours/day in Connecticut. 63.3 megawatts is adequate to power more than 60,000 Connecticut homes, and the power is delivered around-the-clock no matter the weather or time of day.

CNG for Expo Buses

Luxfer Gas Cylinders (luxfercylinders. com) has provided lightweight compressed natural gas (CNG) systems for seven Iveco Urbanway buses that transported visitors at Expo 2015, a global event that began in Milan on May 1 and will run through October 31. Located just northwest of the center of Milan, the Expo site covers 272 acres. The event is expected to attract about 20 million visitors from around the world. Using environmentally friendly CNG-powered buses is in keeping with the Expo’s ecological theme: “Feeding the Planet, Energy for Life.” Each bus is equipped with four Luxfer carbon composite cylinders containing 1,280 liters of fuel. Ofira Italiana Srl, Luxfer’s alternative fuel product distributor and partner in Italy, collaborated on the project.

According to Le Bureau International des Exposition (BIE), the international organization that regulates such global events, the goals of an Expo are “educating the public, sharing innovation, promoting progress and fostering cooperation.” Expos are held every five years in different cities.

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Research and Development Air Liquide and the 3D-Printed Bridge

Air Liquide is a sponsor of the “MX3D Bridge,” project, a world premiere that was unveiled recently. Imagined by Dutch designers from the Joris Laarman Lab, the goal of this project is to construct a stainless steel bridge in the historic center of Amsterdam using an innovative additive manufacturing process (large scale metal 3D printing by robotic arc welding) that makes it possible to build large scale works in real time, without human intervention. For this project, Air Liquide will lend its expertise for the research and development phase and will provide its premium shielding gases, used in arc welding, from its ARCALTM range for the construction of the bridge, which should be completed by the spring of 2017. This large scale additive manufacturing demo project, being fabricated in a single part and autonomously, prefigures a profound transformation in the manufacture of the industrial objects in the future. Digital technologies occupy a central place in it. By participating in this demonstration, which is being conducted using the open innovation approach, Air Liquide illustrates its ability to explore new territories and enable new technologies to emerge. For More on this topic see the July 2015 issue of CryoGas International, which focused on additive manufacturing.

Liquid Fuels from Recycled CO2

Joule (jouleunlimited.com), the pioneer of liquid fuels from recycled CO2, announced the closing of $40m in private equity and venture debt financing, supporting the company’s growth towards commercialization. The round was led by existing investors brings the company’s total to $200 million raised to date. The proceeds will be applied towards a staged industrialization of its patented, reverse-combustion process, including the near-term expansion of Joule’s production field in Hobbs, New Mexico. This will lead to the longerterm build-out of a 1,000 acre plant to begin in 2017. In an optimal location, a plant of this size has the potential to convert 150,000 tons of waste CO2 into 25 million gallons of ethanol or 15 million gallons of diesel per year — with no reliance on arable land, crops, or fresh water. 14

The phased build-out will demonstrate the scalability of Joule’s modular SolarConverter® system, which enables the direct, continuous production of fuel from CO2 and sunlight. “In the past six months alone, Joule has achieved rapid progress and impressive results that position the company well for industrialization. This progress will be bolstered by the newly committed funds and the continued support from our shareholders and strategic partners, including Audi,” said Serge Tchuruk, President and CEO of Joule.

Using Captured Carbon Dioxide

The Linde Group (linde.com) continues to focus on advanced solutions for the recycling of carbon dioxide (CO2) and has extended its participation in the international research project “Impact of Common Impurities on Carbon Dioxide Capture, Transport, and Storage” until 2017. The aim of this project is to study the physical properties of the impure CO2 mixtures that arise in industrial combustion processes and power generation. The specific processes being examined are carbon capture and usage (CCU), enhanced oil/gas recovery (EOR/EGR), and CO2 liquefaction for subsequent commercialization. “Our objective is to further advance carbon capture methodologies as part of a wider climate protection agenda,” explains Jürgen Nowicki, Spokesman for the Board of Directors of the Linde Engineering Division. “The first phase of the research project delivered very promising results. By taking part in the second phase, we expect to further strengthen our competitive position in the processing of CO2-rich gases — a very important activity for many of our customers.” The project is being led by Professor Bahman Tohidi from the Institute of Petroleum Engineering at Heriot-Watt University in Edinburgh, who has been at the helm since the project’s inception in 2011. Statoil, TOTAL, Chevron, Petronas, the UK’s National Grid, and Portugal’s Galp Energia will be participating in the second phase. Precise measurement of the thermodynamic properties of CO2 and its accompanying components has a direct impact on the profitability of processes using CO2. One of the objectives in this context is to guarantee and improve plant operation,

safety, and efficiency under all operating conditions.

Preserving the Earth’s Atmosphere

Since its creation in 2008, the Air Liquide Foundation (fondationairliquide.com) has been supporting research programs that focus on the Environment and Health/ Breathing, and has been contributing to local development by encouraging micro-initiatives in the regions worldwide where the Group is present. Today, there are 194 projects located in 42 countries, and more than 200 employees involved. Since January 2014, 41 new projects have been approved in 20 countries. Among them, six new scientific research projects that fall within the scope of the Foundation’s efforts in the area of preserving the earth’s atmosphere and improving respiratory functioning. For example, the Foundation has renewed its support for the explorer Ghislain Bardout and his second Under The Pole II Expedition in Greenland with an endowment of EUR 120,000 over two years. The objectives of the expedition are twofold: to measure the amount of carbon dioxide trapped in the ocean depths in order to better assess the impact of this phenomenon on climate change, and to study human physiological response during deep sea dives in very cold water in order to issue safety recommendations to divers. The Foundation has also decided to support a research project conducted at the Robert Debré hospital in Paris by INSERM1 and Paris Descartes University on a rare genetic disease known as Ondine’s syndrome. This syndrome is characterized by a significant decrease in breathing during sleep, which in some cases results in the total cessation of breathing. The goal of the research project is to develop a treatment that improves patients’ quality of life. Within the scope of its contribution to local development, the Foundation has approved 35 micro-initiatives in 20 countries, in areas such as the integration of people with disabilities; the development of micro-entrepreneurship; social and professional rehabilitation; and access to energy, healthcare, education, and training. Via these missions, the Air Liquide Foundation illustrates the Group’s commitment to fully embodying its role of responsible corporation whose action is long term. August 2015 – CryoGas International

News Abroad Praxair Grows in the East

Praxair, Inc. (praxair.com) announced it has signed a long-term supply contract with United Phosphorus Ltd. (UPL) (uplonline. com) in Jhagadia, India, for the supply of gaseous nitrogen to the company’s manufacturing unit in central Gujarat. UPL is one of India’s largest agrochemicals manufacturers and a leading global producer of crop protection products, intermediates, specialty chemicals, and other industrial chemicals. Praxair will build, own and operate a 45-tons-per-day nitrogen plant, which is expected to start up in the second half of 2015, already supplying UPL through a 20 ton per day nitrogen plant installed at the Jhagadia site in 2013. “The small on-site nitrogen plants designed by Praxair offer UPL and our customers operational efficiency and process reliability,” said Anuj Sharma, Managing Director, Praxair India. “This agreement is another example of the benefits offered by our technology and the confidence our customers have in Praxair. We thank UPL for extending its trust in us.” In India, Praxair has also signed a longterm contract with Gerdau for the supply of gaseous oxygen to the company’s blast furnace in Tadipatri, Andhra Pradesh. Gerdau is the largest long steel producer in the Americas and one of the leading suppliers of special long steel in the world. Praxair will build, own and operate an 80 ton per day non-cryogenic vacuum-pressure-swing-adsorption plant, which is expected to start up in 2016. Gerdau’s steel facility has an installed capacity to produce 300,000 tons of special steel per year, primarily for automotive, defense, railways and related industries. Meanwhile, in China, Praxair has signed a long-term contract to provide industrial gases to the China National Offshore Oil Company (CNOOC), a Fortune Global 100 company and one of the largest in China. The project, expected to start up in 2017, will enable the reliable and efficient supply of industrial gases for CNOOC’s refinery and downstream chemical production. Praxair will build, own, and operate two 2,400 tons per day air separation plants in the Huizhou Daya Bay Chemical Industrial Park, located in Huizhou, Guangdong, 16

China. Praxair’s product line plants will provide oxygen and nitrogen to CNOOC to support the company’s refinery expansion from 250,000 to 460,000 barrels of oil per day. Praxair currently serves other customers in the Park including the existing CNOOC refinery and the CNOOC and Shell petrochemical complex. This investment will further position the company to supply new customers in the Park via pipeline. Through its subsidiary Beijing Praxair Inc., Praxair also signed a long-term gas supply contract with Gao Bei Dian Water Recycling Plant of Beijing Drainage Group Co., Ltd. Praxair will build, own, and operate a vacuum pressure swing adsorption unit to supply gaseous oxygen to the plant for its wastewater treatment and recycling processes. Located in downtown Beijing, the Gao Bei Dian recycling plant is the largest in China, with capacity to process one million tons of recycled water per day. The plant treats wastewater from municipal drainage and uses the recycled product as cooling water for local power plants as well as for landscaping needs throughout the city. The plant plays a major role in Beijing Municipality’s Wastewater Treatment and Recycled Water Use Project, helping to mitigate water shortages and supporting the city’s sustainable development efforts.

Messer Produces Noble Gases in China

Messer (messergroup.com) has been producing the noble gases krypton and xenon at a new production facility in the central Chinese city of Panzhihua, Sichuan province, since May. In 2012, Messer commissioned its first noble gas unit in China — in Xiangtan, Hunan province, in the south of the country. With an additional annual production capacity of 5,000 cubic meters of krypton and 450 cubic meters of xenon with a purity of 99.999 percent, Messer is the largest producer of high purity krypton and xenon in China now. “It was important to us to produce our own krypton and xenon. Thanks to our state-ofthe-art facilities in Xiangtan and Panzhihua, we can now guarantee our local and international customers a reliable and top-quality supply,” emphasizes Werner Hickel, Managing Director of Messer in China.

Krypton and xenon are two of the rarest elements found on the earth. They comprise only about 1.2 ppm of the atmosphere, so extracting them is like selecting a group of 100 people out of the total population of Germany (82 million). Krypton and xenon are among the most valuable products in the portfolio of the industrial gases producer and are used in the manufacture of light bulbs and gas lasers, amongst other applications. Krypton is also used as an insulating gas filling for double-glazed windows.

Photo courtesy Messer Group. For More on this topic see CryoGas’ December 2015 issue on Rare Gases and their related markets.

Messer CO2 Reuse Project

Messer (messergroup.com), the bio-refinery Alco Bio Fuel (ABF), and the Belgian gas company IJsfabriek Strombeek are joining forces to reduce CO2 emissions in Belgium. Together they are investing EUR 15 million in a new carbon dioxide recovery unit at Alco Bio Fuel in the Port of Ghent. This new unit will be operational in about a year and will recover and process no less than 100,000 tons of green CO2 each year. The CO2 being recovered is released when ABF processes biomass into bioethanol. This biomass is organic material that produces electricity and biofuel. After treatment in the new unit, the CO2 can be re-used in the food and drink industry, in water purification, for refrigerated transports, or as a chemical source. August 2015 – CryoGas International

News Abroad Messer has also bought its 2,000th cryogenic storage tank for liquid gases from its partner Chart Ferox, a tank manufacturer in Decin, Czech Republic. The two companies have been cooperating since 2006, during which time they have jointly developed a European tank standard. “Standardization was a quantum leap for us at the time,” says Christoph Launer, responsible for Logistics, Gas Procurement and Filling at Messer. “This allows us to implement customer projects quickly in all European countries.” The prominent white tanks, measuring up to 14 meters in height are mostly installed on the sites of Messer’s industrial customers where they can be filled by its gas tankers. The tanks are used as product storage tanks for liquid oxygen, nitrogen, argon, or carbon dioxide. As a rule, they remain the property of Messer.

to support this milestone project,” said Kyo-Yung Kim, President of Air Products Korea. “Our investment in production capacity will further strengthen our industrial gas supply position to serve the expanding northern region. It is also testimony to Air Products’ commitment and ability to support the growth plans of our customers through safety, reliable supply, efficiency, and excellent service.”

Air Products Supplying Bulk Gases in South Korea

Air Products has been awarded a major contract to supply industrial bulk gases and bulk specialty gas supply systems for a new semiconductor fab in Pyeongtaek, Gyeonggi Province, South Korea. The company will build multiple ultra high purity nitrogen plants, hydrogen generators, and a liquefier to support the facility. “We are much honored to be selected August 2015 – CryoGas International

Please send your news and story ideas to jkoczan@cryogas.com

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POWER-UP Update

AFC Energy plc (afcenergy.com), the industrial fuel cell power company, reported progress on the delivery of its first 240kW KORE system at Air Products’ Stade facility in Germany. The project, known as POWER-UP, remains on track. The KORE HAZOP review has been successfully completed and the initial HAZOP review of KORE buildings, utilities and facilities, and follow up actions is underway. KORE construction is ongoing with completion expected in time for July 2015. Adam Bond, AFC’s CEO, said, “We continue to make great progress towards the successful deployment of AFC’s first KORE system in Germany in the second half of this year. The challenging target set in fast tracking the deployment timetable by 18 months, and having the KORE delivered and operational by July 2015, has to date proven deliverable.”

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New to Market CO2 Snow for Meat Packing

The DRI PACK® automated box chilling system from Linde LLC (lindeus.com) uses the power of carbon dioxide (CO2) snow to improve safety and efficiency in chilling meat and fish. Designed and built to USDA requirements, the DRI PACK chilling system is ideal for meat packing plants as well as poultry and seafood operations, and is intended for use with new or existing packaging operations. The automated chilling system quickly fills boxes (up to about 24” wide) with CO2 snow as Linde DRI PACK they travel along a conveyor. Benefits include: Automated system reduces labor costs; more accurate and consistent use of CO2; gentle distribution of CO2 snow in open boxes or totes; adaptability to most conveyor lines. “With fish and seafood products retailing for $10 to $20 a pound or more, preserving the product’s high-quality appearance, taste, and texture becomes extremely important,” comments Ed Cordiano, Linde program manager, prepared foods and seafood. With the DRI PACK system, extremely cold CO2 snow quickly chills the food product, locking in moisture and preserving freshness and quality. A controlled flow of CO2 snow is directed into containers or boxes at temperatures of negative 109.3o F (minus 78.5o C). Once in the container, the CO2 snow does not melt; rather, through the process of sublimation, the CO2 provides the refrigeration to chill food — so there is never any liquid. The automated box chilling system offers safety advantages over chilling with water ice or dry ice pellets. Handling bagged ice or constantly shoveling water ice or CO2 pellets can lead to motion injuries. In addition, using CO2 pellets in totes or other open containers in packing plants poses a hazard since CO2 is an odorless asphyxiant. The DRI PACK system eliminates the storage and physical handling of 18

ice, and the equipment includes a shroud around the chute to vent waste gases to the outside. FOR MORE on this topic read: “The New England Food Show and Seafood Expo North America,” CryoGas International, May 2015, page 40.

Having a Blast

Vi k i n g B l a s t & Wa s h S y s t e m s ( v i k i n g c o r p o r a t i o n . c o m ) highlights its GC 111 welding gas cylinder blast system. The GC 111 is the bestselling cylinder stripping system and will be your most produc- Viking Blast GC 111 tive worker in the shop, cleaning approximately 15 gas cylinders per hour or 120 per eight-hour shift. Standard features include: Cylinder capacity of up to 20” in diameter by 72” in length; pneumatic blast cabinet door; cylinder loader table and ejection system; two high efficiency blast wheels lined with manganese, chrome alloy steel wear plates; parallel rollers turn cylinder to ensure even and 360-degree blasting; heavy duty construction with reinforced, plate, and structural steel; safety interlock to prevent opening of blast cabinet door during operation, ensuring operator safety; blast cycle timer with automatic repeat for efficient operation; analog ammeter for each blast wheel for visual monitoring of system performance.

Upgraded Dry Ice Reformer

The new ASCO Carbon Dioxide Ltd. (ascoco2.com) Dry Ice Reformer A700R scores with a production increase of up to 20 percent compared to ASCO A700R its A600R forerunner. This is enabled by a risen production capacity from 200–700 kg/ hour, depending on the block size. Further advantages can be found in a lower average power consumption of approx. 3 kW and in a boosted block density at a step-less adjustable block and slice size of 16–60 mm and a

weight of 650–2,430 g. An integrated production control system allows the user to define and monitor the amount of blocks or weight to be produced accurately. A modern operator panel is the result of an improved design and therefore a much higher usability. The reformer is started over the touchscreen panel, with all functions controlled by an inbuilt PLC. To ensure a continuous, reliable operation, many functions like oil level, cycle time, operation hours, due date of service, motor overload, amount of produced dry ice blocks since last start, and hydraulic pressure are monitored and displayed on the updated color touchscreen.

Industrial Terminal for Automation

METTLER TOLEDO (mt.com) offers a new industrial terminal, the IND570. Its versatility in form and function make the IND570 a standard solution for weighing in any environment. Consistency across processes supports better quality and gains in production efficiency, leading to lower costs and increased profits. If automation is the goal, the IND570 offers a high potential for cost-savings when functioning as a standalone process controller. The terminal’s digital I/O options and the easily programmable software applications take control of your process to produce accurate, repeatable METTLER IND570 results. The new terminal maximizes process efficiency with advanced features, including: selectable interfaces and programs that allow users to customize features to match application requirements — adding costs only when needed; real-time communications via serial, ethernet and PLC interfaces can be tailored to a customer’s specific needs; and performance monitoring and proactive alerting help to avoid expensive down time and keep the weighing system running at maximum potential.

Torque-Limiting Valve Protector

The new TorkDrive valve protector from Smith Flow Control (smithflowcontrol. com) is custom engineered to suit a host valve. Mounted to the valve input August 2015 – CryoGas International

New to Market handwheel or directly to the input shaft, the device uses a series of clutch plates with calibrated compression springs SFC Valve to limit the amount of torque an operator can apply to a valve. During valve operation, if the predetermined maximum torque limit is reached, the TorkDrive will slip, protecting the valve from damage. Both low and high torque range configurations are available for applications requiring between 80–280Nm, or 250– 420Nm. Each unit is factory set before installation and includes a calibrated setting scale within the device, which allows users to adjust torque requirements for their specific application.

Efficient Tanker Control Unit

The new integrated Electronic Pump Metering System (EPMS) on the upgraded Dataplus II M353 Series cabinet from Emco Wheaton (emcowheaton.com) consolidates

multiple pieces of equipment traditionally mounted around a road tanker into a single lightweight cabinet allowing for more efficient installation and operator use. The compact design means less time walking around the truck completing tasks since all buttons are now positioned within the new cabinet. This minimizes the opportunity for trip accidents. EMCO Tanker The EPMS has Control Unit also been designed to help improve the aesthetics of the trucks due to the reduced amount of equipment on display as well as the sleek curved design of the cabinet door. Likewise, the modular stainless steel construction can be configured for a range of different compartments allowing for future upgrades. A self-latching mechanism means that operators do not need to carry a key for the cabinet.

Extreme Temperature Tube Fitting

The Tube Fittings Division (TFD) of Parker Hannifin Corporation (parker.com/tfd) recently introduced Seal-Lok™ Xtreme. This O-ring face seal tube fitting is equipped with a metal sealing ring that makes it ideal for applications where typical elastomeric sealing is not a possibility due to extreme temperature. Seal-Lok Xtreme is a new addition to the Parker line of Seal-Lok tube fittings. It has been extensively tested for thermal cycle and shock, and has performed well with helium mass spectrometer and gas pressure leak testing, achieving tube and hose connections at working Parker Hannifin pressures of up to 5,850 Tube Fitting psi with temperatures as low as -328°F (-200°C) and as high as 1,200°F (650°C). Applications benefiting from Seal-Lok Xtreme’s rugged design include: Combustion turbines; LNG storage and fueling systems; cryogenic equipment; high-temperature engine compartments; instrument panels; chemical process equipment.

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August 2015 – CryoGas International

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US Industrial Gas Market Report 2014

US Industrial Gas Market Report 2014 Making the Most of Growing Markets By Maura D. Garvey

The US Economy

As we hit the half way point in 2015, we find the US economy moving ahead, but doing so at a slower pace than last year. US Real gross domestic product (GDP) rose 2.4 percent in 2014, compared with an increase of 2.2 percent in 2013 and 2.3 percent in 2012, according to the Bureau of Economic Analysis (BEA) (bea.gov). Intelligas Consulting (intelligas.com) forecasts GDP growth for the year to be on par with the past three years, slow but steady growth. Real GDP decreased at an annual rate of 0.2 percent in the first quarter of 2015, according to the “third” estimate released by the BEA, a big improvement over the 2.1 percent decline in the first quarter of 2014. In the fourth quarter of 2014, real GDP increased 2.2 percent. The third GDP estimate is based on more complete source data than were available for the “second” estimate 20

US Real GDP Percent Change by Quarter (1Q’07–1Q’15)

6.0 4.0 Percent Change

The recovery of the industrial gas business from 2012 through 2014 was strong, about six percent per year, driven by price and volume. The bright spots in the economy during this period included the manufacturing sector, a significant driver for the industrial gas industry. In this report we look at how industrial gas players and independent gas distributors performed in 2014, with a focus on industry trends. Energy, manufacturing, chemicals, petrochemicals, and food and beverage are driving volume and the push toward providing increasingly sophisticated gases and applications both within and outside the scope of the traditional industrial gas business. The US is producing shale oil and gas on a large scale using fracturing with energized fluids, which is driving demand for carbon dioxide and nitrogen. The automotive industry is driving steel production, running at over 98 million tons per year in 2014, and is a big user of ASU oxygen. Also, biotech is a fast growing segment for specialty gases.

2.0 -0.0 $16.288 Trillion

-2.0 -4.0 -6.0 -8.0

-10.0 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV

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2010

Figure 1

issued last month. In the second estimate, the decrease in real GDP was 0.7 percent. With the third estimate for the first quarter, exports decreased less than previously estimated and personal consumption expenditures (PCE) and imports increased more. The decrease in real GDP in the first quarter of 2015 primarily reflected negative contributions from exports, nonresidential fixed investment, and state and local government spending that were partly offset by positive contributions from PCE, private inventory investment, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased. PCE represents a large portion of GDP. Unlike Industrial Production where losses or gains can have immediate impact on the industrial gas business, the effects of changes in PCE take longer to filter down to gas markets.

Industrial Gas Market Segments

In calendar year 2014, industrial gas revenues in the US increased annually by more than six percent over 2012, making the last

2011

2012

2013

2014

2015

Source: US Bureau of Econmic Analysis

several years very respectable. While first quarter 2015 reports indicate growth, there appears to be slowing in most segments of the US economy. The manufacturing sector had been a bright spot for the US economy in 2014, growing at over four percent, but signs of stress came late in 2014. The Institute for Supply Management’s (ISM) manufacturing gauge fell to 51.5 in March and April of 2015 from a high of 58.1 in August 2014. Readings below the 50 mark point to contraction while those above indicate expansion. The gauge experienced a slight uptick to 52.8 in May according to ISM. All manufacturing industries driving industrial gases are experiencing growth with the exception of computer and electronic products. While US GDP is a good indicator of overall economic strength, about twothirds of its value is derived from consumer spending that is not directly related to the business of the industrial, medical, and specialty gas industry. Since over 70 percent of our industry’s business is derived from manufacturing, we look at the FederAugust 2015 – CryoGas International

US Industrial Gas Market Report 2014

US Market Segments Driving US Industrial Gas Business 2010-2014

Market Segments

Market Size $US, billion 2014

Percent Share of US Gas Business

Segment Growth, % ‘10 to ‘11

‘11 to ‘12

‘12 to ‘13

‘13 to ‘14

Agriculture

135

0.5%

-4.5%

-3.4%

12.0%

-7.2%

Mining/Oil & Gas Extraction

357

2.0%

6.4%

10.1%

4.1%

7.2%

Construction

578

5.0%

-0.5

4.1%

1.9%

-0.7%

2.5%

3.2%

3.4%

-1.5

5.8%

Manufacturing Nonmetallic Mineral Products Primary Metals

7.0%

4.4%

23.7%

14.5%

4.7%

Fabricated Metals

145

9.5%

6.3%

2.7%

-1.1%

4.2%

Machinery

150

12.0%

13.1%

0.5%

-3.3%

7.1%

Computer & Elect Components

286

10.0%

3.5%

2.7%

0.5%

4.5%

Electrical Equipment

3.0%

-3.9%

-2.4

1.2%

3.4%

Motor Vehicles

162

2.5%

27.8%

8.8%

8.0%

8.1%

Aerospace/Transportation Equipment

121

1.0%

1.9%

-0.9%

2.7%

4.2%

0.5%

-3.9%

-1.1%

3.2%

4.6%

224

6.0%

-3.4%

-3.1%

0.7%

1.8%

Miscellaneous Food & Tobacco Products Paper

1.5%

-4.9%

-1.6%

-4.6%

-2.5%

303

12.5%

-5.8%

-4.0%

-0.6%

2.1%

Petroleum Products

4.0%

-14.2%

-0.4%

7.0%

2.3%

Rubber and Plastics

1.0%

-1.4%

4.7%

0.6%

7.0%

1,839

73.0%

1.0%

0.8%

1.3%

4.0%

447

4.0%

3.6%

0.2%

0.7%

1.4%

Chemical

Subtotal Transportation Government

1,897

4.5%

0.4%

0.5%

-0.6%

-0.3%

Services, Health

1,149

11.0%

1.7%

2.4%

2.7%

TOTAL

6,400

100%

0.8%

1.2%

1.4%

1.8%

Note: Green text indicates markets which contribute greater than a six percent share to the revenues of the US industrial gas business. Figure 2

al Reserve Board’s (FRB) (federalreserve. gov) Industrial Production (IP) index, which measures the real output of manufacturing (75 percent of the total), mining, and gas and utilities, for trends. As shown in Figure 2, Industrial Production made large improvements in all of the significant markets for industrial gases (see green text) in 2014. The biggest jumps in IP growth were seen in fabricated metals, machinery, computers and electronic components, and chemicals. Overall IP growth was just 1.8 percent for 2014. The good news for the industrial gas industry August 2015 – CryoGas International

Source: BEA, US Federal Reserve G.17 Industrial Reports, and Intelligas Consulting

was that manufacturing growth was 4.0 percent, an improvement over 2013 manufacturing growth of 1.3 percent. Figure 3 illustrates the manufacturing economy’s return to pre-recession levels in 2014. The first quarter of 2015 indicates there has been a big slowdown in manufacturing IP growth from 2014 of 4.0 percent to about 1.7 percent, driven by significant declines in primary metals, fabrication, machinery, and computer and electronic products. Chemical IP was the only important industrial gas sector that has actually increased going into the first

quarter of 2015. Manufacturing IP is a critical indicator for our business as gas sales to manufacturing represent over 70 percent of the industrial gas business. Figure 4 shows the annualized percent change in US steel production in 2014 and the first quarter of 2015 by quarter from 2007. Since the Q4’09, raw steel production (which measures volume) steadily, but not consistently, has been increasing. However, raw steel production has yet to near pre-recession levels. Activity in steel markets is always a precursor to what is happening in other markets, and the Q1’15 21

US Industrial Gas Market Report 2014

US Manufacturing IP — Seasonally Adjusted (1997 — 1Q’15) YTD Avg 103.22

104 100.00

101.60

Index (2007=100)

100

97.86

96.97

94.41 92

89.81

88 85.97

86.29

95.07 91.08

90.58 88.05 86.74

87.90 82.43

81.80

95.43

76.68

1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

Figure 3

Source: BEA and US Federal Reserve G.17 Industrial Reports

drop in steel production reflects the suffering in the parts of the US economy that use steel, such as fabrication, machinery, and construction.

The 2014 Industrial Gas Market

The US industrial gas (IG) business has a unique multi-tiered supply channel made up of producers, distributors, and customers/markets. Gas producers are large, publicly held companies with national market penetration. They supply gases directly to both distributors and to customers in all markets, via three modes: on-site and pipeline (OSP); bulk and microbulk; and packaged. Independent US distributors

buy gas from producers and deal mostly in high pressure and liquid cylinder gases, micro/small bulk, and increasingly, in regular bulk modes. Distributors serve regional markets and also carry hardgoods which can be a significant component of their business. There are six major gas producers in the US — Air Products, Air Liquide, Linde, Praxair, MATHESON, and Airgas — and roughly 850 independent distributors/producers. Independents continue to make acquisitions, creating super-regionals that can compete with the major players. Several of the major gas producers, namely Praxair’s PDI division and Airgas, have

consistently grown their distributor type business through acquisitions of the independent cadre of distributors/producers. Most producers report on a fiscal year basis ending December 31. The exceptions and fiscal year closings are: Air Products (9/30), Airgas (3/31), and MATHESON (3/31). Estimates for these producers have been converted to calendar year to put all on an equal basis for comparison. Our estimate for the total value of the US industrial gas business in calendar year 2014, $20.7 billion, represents sales of gases to end-users, but excludes sales by gas producers to gas distributors to avoid double counting. The 2014 business grew by more than six percent per year from 2012. The industrial gas revenues for the US independent distributor business in 2014 and small independent producers (such as Norco) are estimated at $3.2 billion (industrial, medical, cryogenic, and specialty gases). Praxair, Airgas, and MATHESON participate in this business and their sales are included in their total gas business revenues. Player share of the 2014 US Industrial Gas Business is shown in Figure 5. Praxair – Praxair has the largest share of the US gases business with 20 percent, or $4.3 billion. Worldwide revenues for the year were $12.3 billion, the highest in the company’s history. Sales growth was three percent for the full year. Praxair reports revenues by five segments: North America, Europe, South America, Asia, and Surface Technologies. Praxair achieved

Raw Steel Annualized Production % Change by Quarter (1Q’ 07 — 1Q’15)

Index (06Q1 = 100)

120 100 80 60 40 20

07Q1 07Q3 08Q1 08Q3 09Q1 09Q3 10Q1 10Q3 11Q1 11Q3 12Q1 12Q3 13Q1 13Q3 14Q1 14Q3 15Q1 Figure 4

Source: American Iron & Steel Institute (AISI)

August 2015 – CryoGas International

US Industrial Gas Market Report 2014

US Industrial Gas Business Player Share — 2014

TNSC/MTG 4%

Ind Distr 15%

Air Liquide 14% Linde 15%

Praxair 20%

Air Products 17% Airgas 15%

US Industrial Gas Revenues = $20.7 Billion Figure 5

Source: Company financial reports and Intelligas Consulting

strong sales growth in every geographic region from new business and new plant start-ups. In North America, 2014 year sales reached $6,436 million. Sales grew in all major end markets, led by energy, manufacturing, and food and beverage. The Overall sales in North America grew four percent for the full year. Operating profit grew three percent for the full year. Organic sales growth was driven by increased volumes, including volume growth from new plant start-ups, and higher prices, and acquisitions. Volume growth came from higher onsite volumes from new project start-ups, including hydrogen supply to refinery customers in the US, and higher merchant and packaged gas volumes. Sales growth was strongest in the energy, manufacturing, and food and beverage end-use markets. The strong sales growth to the energy market was primarily due to hydrogen project start-ups. The company invested $206 million in acquisitions, primarily NuCO2 and several packaged gas distributors in the US which contributed to one percent growth. Higher cost pass-through, primarily higher natural gas prices passed through to hydrogen customers, increased sales by one percent. Packaged gases sales were higher in 2014 compared to 2013 primarily due to growth in the US business. However, packaged gases are a lower a percentage August 2015 – CryoGas International

of total sales due to the strong growth in on-site sales. North American sales for 2014 as a percentage of distribution mode were reported to be 30 percent on-site, 36 percent merchant (bulk), 32 percent packaged, and two percent other. Chairman, President, and CEO Steve Angel, says, “Looking forward to 2015, we expect modest global growth. More than half of our sales are generated in North America and with our industry-leading presence we will continue to take advantage of the underlying economic strengths of the region. While we continue to see slowing macro-economic trends in the rest of the world, our diverse end-markets and strong local teams will continue to drive resilient operating results and increasing cash flow. We are committed to high quality growth and expect continued strong cash flow generation to fund new projects.” Air Products – For calendar year 2014 Air Products has the second largest share of the US gases business, 17 percent, or $3.7 billion. Global sales of $10,455 million were up three percent due to higher volumes and prices across all segments. Operating income of $1,716 million increased 8.6 percent. The overall growth was driven by Merchant (bulk) gases and the Electronics and Performance Materials segments. Tonnage Gases results decreased as Air

Products exited their polyurethane intermediates business and experienced higher maintenance costs and customer outages. In September 2014, Seifi Ghasemi, Chairman, President, and CEO, announced that on October 1, 2014, Air Products would begin operating under a new structure and reporting results under seven segments: four industrial gases segments — Americas, EMEA (Europe, Middle East, and Africa), Asia, and Global; and Materials Technologies; Energy-from-Waste; and, Corporate and other. The three regional industrial gases segments (Americas, EMEA, and Asia) include the production of air gases (primarily oxygen, nitrogen, and argon), hydrogen/ HYCO (including hydrogen, carbon monoxide, syngas, and steam), and regional merchant gases business (including liquid/ bulk, packaged gases, and related equipment). The Industrial Gas Global segment includes atmospheric sale of equipment businesses (ASUs, non-cryogenic generators, and global resources associated with the industrial gas business). The Material Technologies segment includes the Electronics Materials and Performance Materials businesses, but excludes the previous Electronics tonnage gases business which in now part of the three regional industrial gases segments. A description of the business restructuring and business segment information can be found at airproducts. com. During Q4’14 when Air Products reported earnings based on their new structure, the company noted that industrial gas sales in the Americas increased six percent versus the prior year’s quarter, primarily based on higher North American volumes and stronger pricing. Air Liquide – Air Liquide holds a 14 percent share of the US gases business, or $2.9 billion. Air Liquide’s worldwide corporate business was $20.4 billion in 2014. The strong dollar is helping US-based sales. The Americas overall reported robust growth of 7.9 percent. In North America, the manufacturing sector remained strong with oxygen and hydrogen volumes on the rise. In the US, the number of major contracts with industrial customers continued to grow, especially in the petrochemicals sector along the Gulf Coast. Industrial Merchant gas sales were strong. This seg23

US Industrial Gas Market Report 2014

ment is responsible for providing bulk gases and related services to US customers in the automotive, chemical, food, pharmaceutical, and metals industries. Growth in Electronics was strong in the US, at almost 30 percent, and was driven by the acquisition of Voltaix in 2013. The Electronics business in the US serves the semiconductor industry by providing ultra-pure gases, liquids, and advanced molecules used in the fabrication of silicon chips. Linde – Linde has a 15 percent share of the US gas business, $3.1 billion. Worldwide group sales were $22.7 billion of which the Gases Division contributed $18.6 billion in 2014. Economic growth in North America was stable, but higher natural gas prices had an adverse impact on margin. The main areas of solid growth in North America during the year were the Cylinder gas (packaged) and Liquefied gases product areas. Over the whole year, above average growth was achieved in the Healthcare business, the operations of Linde’s subsidiary, Lincare. The fastest rate of growth was experienced in the on-site business where revenue rose more than four percent. In the Liquefied gases product area, revenue increased 3.5 percent. Cylinder gases growth was flat. The Healthcare business increased 3.6 percent and would have been significantly higher if revenues were not adversely affected by supply contracts being put out to tender under price reductions from government tenders in the first half of the year. During 2014 Linde brought on ASU operations in Ohio and Texas to meet growing demand for industrial gases in these regions. In addition, Linde is expanding its on-site business with refineries and concluded a new supply contract in 2014 with Lima Refining, Ohio. Linde will build a third hydrogen plant at this location and modernize existing facilities. Linde is also on track to develop the supply of gases at the major petrochemical site in La Porte, TX. Petrochemicals has developed into a promising market, especially against the level of exploitation of shale gas reserves in the US. Linde also opened a production plant for specialty gases in Indiana to complement an existing plant for industrial and medical gases to serve end-use customers in the food, pharmaceutical, and biotech24

nology industries, as well as laboratories and universities. During the third quarter, Linde completed the expansion of its production capacity at its electronic gases site in Oregon to address the growing demand for high-purity nitrogen from customers in the semiconductor industry. Airgas – Airgas has a 15 percent share of the US gas business, $3.3 billion. Corporate revenues were $5.3 billion, which includes a large hardgoods business — a growth of four percent from the prior calendar year. As the largest distributor in the US, they distribute industrial, medical, and specialty gases, and welding, safety, and related products. Airgas reported US gas sales increased 3.3 percent from the prior year.

Industrial gas and related equipment markets are benefiting from petrochemical/chemical activity in the US. Airgas noted in their Fiscal 2015 full year results (April 2014–March 2015) that industrial gas sales increased three percent over the prior year with acquisitions contributing two percent to sales growth for the year. During the first three months of calendar 2015, Airgas stated that they experienced greater than expected declines in Energy & Chemicals and Manufacturing customer segments reflecting the impact of the rapid decline in oil prices and the impact of the strong dollar on manufacturers that export. Airgas Executive Chairman Peter McCausland noted in their earnings guidance that, “Like many others, we had expected the US industrial economy to be much stronger by now. We are seeing an economy that is clearly weaker than it was in the December quarter, and the level of uncertainty in the marketplace makes it difficult for us to predict our near-term sales outlook — the overall sluggishness in the industrial economy tempers our near-term optimism.” MATHESON – The US affiliate of Taiyo Nippon Sanso (TNS) Corporation, and now controlled by Mitsubishi Chemical, have a four percent share of the US industrial gas business, $0.9 billion. Dur-

ing 2014, North American industrial gas demand was strong due to the economic recovery. The Industrial Gases business segment includes the manufacture and marketing of gases and related equipment. The Electronics segment includes electronic materials gases and pure gases (nitrogen, argon, and specialty gases) as well as electronics related equipment and semiconductor manufacturing equipment. The equipment revenues have been excluded from the gas revenue estimate. In February 2014 TNSC acquired Continental Carbonic Products, Inc. of the US, a manufacturer of carbon dioxide and the number two supplier of dry ice in the North American Market. Also in 2014, MATHESON completed its seventeenth North American ASU in Mesa, Arizona.

The Outlook

The industrial gas industry, like all others, will be operating within a sluggish US economy, which means industry profitability will continue to be dependent on business efficiency at all levels of operation and on tapping into opportunities in growing markets. Industrial gas and related equipment markets are benefiting from petrochemical/chemical activity in the US and we expect this to remain an important growth driver in 2015. Other strategic sectors for our industry — fabrication, specialty gases, beverage and food markets, and electronics applications — have stronger growth profiles than the mainstay manufacturing sectors going into 2015. Intelligas Consulting expects growth in the US Gas Industrial Gas Market to continue at a slightly lower pace in 2015, all depending on how economic growth in the key industrial gas sectors develops during the second half of the year. The producer forecasts for Industrial Gas revenue growth were tempered but determined. Watch for our reporting on the outlook for industrial gas markets throughout the year. Maura D. Garvey is Director of Market Research at Intelligas, a J.R. Campbell & Associates, Inc. company, (intelligasconsulting.com), a consultancy specializing in strategic analysis and forecasting in the industrial gas industry. She can be reached at mdgarvey@verizon.net. August 2015 – CryoGas International

A Change in Packaging

A Change in Packaging The Move to Microbulk By Agnes H. Baker While packaged gases have a small share of the overall gas market by volume, they have a relatively large share of the market by value, representing 35 percent of the total. For the independent gas distributor group in the US, packaged gases, which include high-pressure and liquid cylinders, represented 90 percent of total revenues, including rentals, in 2014. This supply mode is the heart and soul of the distributor business. Packaged gases, which include oxygen, nitrogen, argon, helium, acetylene and other cutting gases, medical and medical mixtures, core/specialty, and electronic specialty gases, are sold in to a wide range of markets and tend to be high value products. They are delivered in high-pressure cylinders, in single volumes, or in banks or bundles, and in larger liquid cylinders (160 – 300 liters). Improved technology, automation, and the ongoing trend of buy-outs and mergers, has led to a dramatic rise in automated and sophisticated cylinder filling and distribution practices, which has been good for the packaged gases business. We have witnessed a steady increase in the volume of cylinders processed in fill plants around the country. Centralized fill plants with computerized, palletized fill systems are now the hallmark of the packaged gas business.

Trends in Cylinder Design

Innovative and improved cylinder design has also helped the packaged gas business remain vibrant. We asked Rob DuPuis, Vice President, Sales and Marketing at Luxfer Gas Cylinders to comment on cylinder trends. He responded: “The packaged gas market in North America is highly diversified, but in looking back over the past five years, we at Luxfer see two fairly clear trends related to high-pressure cylinder development that we believe will continue for the foreseeable future. The first is an increasing demand for longer-term gas stability in aluminum specialty gas cylinders that contain certified high-purity gases and more complex and sophisticated gas 26

US Value 2009 = $18.5 Billion

Packaged

38%

OSP

27%

Bulk

35%

Figure 1

blends, including research-grade and laboratory gases. This trend is especially true in four markets: electronics manufacturing, including semiconductor manufacturing; specialized medical applications, including biotechnology and biopharmacology; chemical processing; and environmental monitoring, including containment of calibration gases. Luxfer recently introduced a line of aluminum specialty gas cylinders featuring a proprietary SGS™ (Superior Gas Stability) internal surface for these demanding applications. “The second trend is a growing demand for ultra-lightweight composite cylinders, especially those wrapped with ultra-highstrength, aerospace-grade carbon composite fiber. These cylinders offer higher-pressure, higher-volume gas containment at greatly reduced weight. We like to classify applications for these cylinders in two categories. The first is smaller, portable cylinders that can be carried by a person. This category includes aluminum-lined, carbon fiber-wrapped breathing air cylinders used by firefighters and other first responders, as well as cylinders containing medical gases, including oxygen and more specialized gas blends. Small to medium-sized composite cylinders are also used in various aerospace applications, including inflating escape slides on aircraft. The second classification is large cylinders used to contain alternative fuels (AF), including compressed natural gas (CNG) and hydrogen. These large cylinders are used

US Value 2014 = $20.7 Billion

OSP

Packaged

28%

35% Bulk

37%

Source: CryoGas International and Intelligas

both for vehicular applications and for gas storage and transportation. Luxfer offers these carbon composite cylinders with aluminum liners (Type 3 cylinders) and larger-diameter polymer liners (Type 4 cylinders). Using these lighter-weight cylinders can significantly reduce transportation costs via fuel savings and reduced wear and tear on transportation vehicles. Large composite cylinders inside ISO containers are increasingly used to store and transport a variety of bulk gases.”

Markets Driving Packaged Gases

Energy, fabrication, manufacturing, construction, and food and beverage were all noted by major gas producers as growth markets for cylinder gases in 2014. Last spring, two major suppliers of packaged gases, Praxair and MATHESON, opened facilities in North Dakota. MATHESON completed the construction of a new large capacity air separation unit in Dickinson to meet the growing demand for merchant liquid nitrogen and oxygen in the Bakken shale oil formation region. Praxair started-up of a new packaged gas fill plant in Bismarck, significantly increasing its cylinder gases capacity in that same region. For independent distributors, the same markets have been growth drivers. In the beverage market, Brianna Applegate of General Air Service and Supply, a Colorado-based distributor, says the microbrewery business in their region is booming. “We have seen small five barrel brewAugust 2015 – CryoGas International

A Change in Packaging

eries that use a few 50 pound CO2 cylinders grow into 750 pound CO2 cylinder accounts.” On the East Coast, Michael D’Auria of American Gas Products concurs. New England microbreweries have been very good for business. D’Auria says, however, that one of the big successes in his beverage CO2 business is the Chart microbulk system that his company offers.

Moving to Microbulk

This change from cylinder gas supply to microbulk supply moves revenues from the packaged gases category into the bulk mode category. As can be seen in Figure 1, the share of total market value for packaged gases has declined slightly between 2009 and 2014. Much of this can be attributed to applications being supplied more efficiently and cost effectively with microbulk, which is part of the growing bulk category in Figure 1. The rise in the supply of liquid gases, as opposed to gaseous, has influenced this trend. Liquid supply is a more efficient way to deliver the product and as long as there isSGD large enoughValve usageAd by2012:Layout the customer,1it Whisper becomes even more efficient to deliver the

product in microbulk. Writing for CryoGas, Chart Industries, a leading provider of liquid cylinders and microbulk tanks, explained how in a world where business professionals need ways to retain the business they currently enjoy while finding creSee Related Articles: “Increasing CO2 Opportunities in the Growing Microbrewery Industry,” by Brianna Applegate, CryoGas International, May 2015, page 30. “Diversify Your Customer Portfolio with Medical MicroBulk,” by Chart Industries, CryoGas International, December 2011, page 34. “State-of-the-Art Equipment and Extra Safety Precautions Help nexAir Keep Atop Cylinder Filling Trends,” by Troy Goode, CryoGas International, August 2015, page 34. “Microbulk and Small Bulk Making Big Strides: Modern Delivery Method Fills Distribution Gap, Lowers Costs,” by Bob Linton, CryoGas International, 10/7/13 2:09 PM Page 1 May 2015, page 24.

Whisper Valve Takes the

ative ways to profitably grow, microbulk systems are a ready solution. Microbulk enables industrial gas distributors to provide improved service to existing clients and to enter fast-growing markets.” Troy Goode of nexAir, a large regional distributor with headquarters in Tennessee, explains how this trend is playing out in their area: “While traditional cylinder delivery remains a large portion of our business, we’ve seen a lot of customers buying into microbulk and even bulk gas systems for lower costs, an uninterrupted supply of product, and on-site customer inventory management via telemetry.” For distributors who depend on packaged gas business, the move to microbulk supply will continue to be an important consideration in business planning. CryoGas International sees microbulk remaining a strong trend going forward and one that is good for both the distributor business and its customers. Agnes H. Baker is Managing Editor of CryoGas International. She can be reached at abaker@cryogas.com

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October Basic Industries and Natural Gas Argon Market Report & LNG Report Editorial due August 14

Contact Tim Rice at trice@cryogas.com to learn how advertising with us gets you noticed Send stories, news, and product releases to our editor Aggie Baker at abaker@cryogas.com

November Electronic Manufacturing in the US Helium Market Report Editorial due September 11 December The Lighting Market and Insulated Glass Market Rare Gases Market Report Editorial due October 16

Six New Things Happening with Biofuels

Six New Things Happening with Biofuels By Pat Adams

Over the past few years, scientists across the country have been revolutionizing the future of fuel. Biofuels researchers from the Department Energy’s National Laboratories and its partners have achieved some significant milestones, and there’s a lot more in the works. Check out what’s new:

a method that could make it easier and cheaper to produce jet fuel from biomass. To read more, see “Leaving on a Biofueled Jet Plane,” newscenter.lbl.gov.

3. There’s an Algae Surfboard

1. They’re Getting a Lot Cheaper

Energy Department Photo.

Photo courtesy of the California Center for Algae Biotechnology.

Photo courtesy of Berkeley National Laboratory.

Rapid advancements in biofuels science have reduced the cost per gallon from $400,000 to $6. Soon that number will be even lower, making it competitive with today’s fossil fuels. That’s a key step toward replacing gasoline, diesel, and jet fuel in our cars, trucks, and planes.

2. The Hardest Part is Getting Easier

Producing affordable and reliable jet fuel poses the most significant challenges for biofuels researchers, but scientists at the Energy Biosciences Institute, in partnership with Berkeley Lab, have discovered 28

The Energy Department’s Bioenergy Technology Office recently released an interactive quiz with some surprising facts about biofuels. For instance, do you know how many billions of gallons of biofuels we already consume? Try the quiz and see how well you know your stuff. Visit energy.gov.

You may soon be able to ride your very own algae surfboard. While fuels for transportation are the primary targets of biofuels research, many products today —like plastics and paints — are also made from petroleum, which can be replaced with new forms of biofuel. To watch the video “World’s First Algae Surfboard Makes Waves in San Diego,” visit energy.gov.

6. Or You Can Come See For Yourself

4. Robots are Going to Improve the Plants Used to Make Fuel

On Monday, June 22, the Bioenergy Office hosted Sustainable Transportation Day at Energy Headquarters in Washington, D.C. Attendees could see the latest in biofuels, check out the most fuel-efficient cargo truck in the world, or try a simulator showing how cellulosic ethanol can improve sportscar performance.

Photo by Hermann Falkner.

Photo via Creative Commons.

5. You Can Test Your Knowledge Online...

A brand new ARPE-E project will use robots to study the characteristics and DNA of sorghum, a plant with a high sugar content ideal for producing biofuel. The information will be gathered in a database that scientists developing biofuels can use to help maximize new strains of the plant. To learn more visit energy.gov.

Photo courtesy of Freightliner.

Scientists agree: to avert the worst effects of climate change, we need to change our fuels. These are just some of the ways the Department of Energy and its National Labs are involved in efforts to replace petroleum-based fuels with those derived from biomass. For the future of our transportation and our planet, this work couldn’t be more critical. Pat Adams is a Digital Content Specialist, Office of Public Affairs, US Department of Energy. August 2015 – CryoGas International

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Sorting it Out with Continuous Improvement – Sky Cylinder Testing

Sorting it Out with Continuous Improvement Sky Cylinder Testing By Jonda Vance, with Scott Elliott & Erich Pfafflin In February 2012, Sky Cylinder Testing (skycylinder.com) in Evansville, Indiana began its Continuous Improvement journey. Established in 1999 to serve the retest and refurbishment needs of the compressed gas industry, one of the initial opportunities for improvement was to address an issue that had been plaguing Sky for some time: how to effectively and efficiently process incoming cylinders for retest and refurbishment, and do it faster without sacrificing safety or quality of service to customers. The growth in business was more than the process could handle, and it was quickly recognized that a major change was needed. But what? With the help of The Edwards Group International, LLC (edwardsgrp.com), Sky Cylinder’s management and staff, working together, found the right solutions with Continuous Improvement. This article examines that process.

• Not having all the customer information/ requirements at time of load arrival • Not enough room in the yard area to move and sort cylinders safely and efficiently • Starting the process before cylinders had been “received” • Rushing to get the job done • Lack of personnel trained in how to identify, sort and write up instructions for testers and refurbishment staff • Changing priorities • Challenge in communicating changes to orders and special instructions

Background

The Challenges and the Solutions

The process of receiving cylinders for testing and refurbishment is a tedious and painstaking activity. While Sky Cylinder has always taken meticulous care to prevent mistakes and mitigate risks, they knew they could do more to improve the flow through the entire process. The team (officially named the Cylinder Prep & Distribution Team, or CPD) wanted to find ways to meet customer requirements and improve turn times so they could increase the value being offered to customers without harm and with less cost. Initially, Sky employees performed their duties in a somewhat haphazard manner, prepping what they could, when they could, under less than desirable conditions. Some of the problems they faced were: • Exposure to outdoors, working in inclement weather • Weather related cylinder issues such as frozen caps and wet cylinders 30

The main objective was improving cylinder sorting by size and gas type. Several approaches were tested including dedicating a section of the yard to this activity, changing the flow of incoming and outgoing cylinder loads, and changing how loads were marked for identification. One of the primary challenges was the limited yard space of the facility and not having dedicated resources for this process. The first task was finding a centralized location that could serve both buildings and accommodate the flow of cylinder traffic without causing more congestion and more handling of cylinders. With the advent of Continuous Improvement, it was decided that establishing a designated area to prepare each individual load of incoming cylinders was needed. Sky acquired land adjacent to their facility and built a covered sorting and preparation station, where an entire truckload of cylinders could be staged at one time. The Receiving process was developed around this concept and got Sky Cylinder one step closer to their goal of improving efficiency and reducing errors. Once the Receiving department checks in a load of cylinders, a customer identification sheet is sent to CPD along with a copy of the

Sky acquired land adjacent to their facility and built a covered sorting and preparation station.

manifest, identifying any known discrepancies specific to that load. Upon receiving this paperwork, CPD begins the sorting process. The CPD staff has been trained to recognize the special characteristics of each customer, and to ensure that information is clearly articulated to all of Sky’s employees. “As the ‘front-line’ of Sky Cylinder, it is incumbent upon the members of CPD to identify — as they sort by size and gas type — any information either written on a cylinder or implied by its condition, and to then make that information perfectly clear to those further down the line (testers/refurbishers/painters),” states Erich Pfafflin, CPD Supervisor.

It was decided that establishing a designated area to prepare each individual load of incoming cylinders was needed. Once a load is sorted and prepared for distribution, CPD moves the cylinders to the various department staging areas: Hydrotest, Ultrasonic Test, Refurbishment, Propane/Acetylene, Neck Ring Installment, and Blast & Paint. Each department has a designated staging area, identified by painted borders and marked cones. August 2015 – CryoGas International

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Sorting it Out with Continuous Improvement – Sky Cylinder Testing

At Sky Cylinder, each department has a designated staging area.

CPD also developed a system of marking individual and groups of cylinders that have special instructions, consisting of numbered labels and information packets that correspond to lists of cylinders by serial number. This system is used with customers preferring to have each pallet of cylinders returned to them exactly as they were loaded for shipment to Sky. These loads are referred to as “skid-specific.” The team uses pink clown collars and plastic travelers to communicate these special instructions more efficiently.

cylinder. This prevents them from having to repeatedly change the settings on equipment and prevents stopping the testing process to fill the test jackets with water. Taking what they learned from skid specific loads, Sky has gone on to develop a numbering system and uses specially-made stickers placed on each cylinder during the sort process to identify which skid cylinders go to. These stickers are easily visible and don’t wear off in the weather or during the testing process. Sky now uses them to label Blast & Paints and customer-owned cylinders. Though a system was established for communicating the cylinder order requirements, there was still confusion on the priority of the orders to be processed. From time to time the work schedule may need to be adjusted due to changing customer requirements. To help identify these changes, CPD added a dry-erase board at the entrance to the testing building, which is updated daily, that shows what is prepped and the order in which it is to be brought into the building for test. If there is a change to the schedule, anyone bringing cylinders into the building knows what comes next in the production cycle.

Applying PDSA to the Process

In the two years since the team was established and CPD was created, Sky Cylinder has seen double digit growth in the volume of cylinders processed, while only needing minimal additional testing capacity. According to Sky Cylinder’s President, Scott Elliott, “The creation of the Cylinder Prep and Distribution area has been a big ‘win’ for Sky Cylinder. Through effective sorting and better internal communication, CPD has set the stage for Sky Cylinder to achieve double digit growth each of the past two years in the number of cylinders tested.” (see figure 1) “We are thrilled with the results we have Sky Cylinders handling team uses pink clown seen from the implementation of the Cylcollars and plastic travelers to communicate inder Prep area. Even more, we are excited special instructions more efficiently. to see the PDSA cycle [Plan, Do, Study, Aside from instructions particular to Act – the cycle of Continuous Improveeach customer, the CPD sorts each load to ment] at work as this team has continued facilitate a “natural progression” through to look for ways to improve over the past the testing process. Each load is organized two years. Through better organization, from the smallest to the tallest cylinder, en- the use of visual aids, and increased comabling the devalver and consequently, the munication this team has been instrumentester, to begin each load with the smallest tal in our increased volume/efficiency and cylinder and progress in size to the largest decreased reworks.” 32

Average Monthy Testing Volume

Rewo

rks

2012

2013

Figure 1

2014

Source: Sky Cylinder

Looking Ahead

Sky Cylinder has continued to improve the process. Today, there is an expanded and dedicated yard area and shelter for the CPD business unit, which allows them to prepare and move cylinders through the entire value stream faster than ever before. Dedicated team members are assigned and fully trained in sorting, preparing, and identifying each customer’s requirements. There are less errors and waiting, less handling, and customer requirements can be met in a timelier and safer manner.

There are less errors and waiting, less handling, and customer requirements can be met in a timelier and safer manner. Like any process, there is always room for improvement. Sky Cylinder’s team is just getting started. Using the PDSA cycle of Continuous Improvement, they continue to find innovative ways to boost their productivity, eliminate even more errors, and increase the value they offer to their customers. Scott Elliot is President of Sky Cylinder Testing, skycylinder.com. Erich Pfafflin is Sky Cylinder’s CPD Supervisor. Jonda Vance is President of the Edwards Group International, LLC (EGI) and can be reached at jvance@edwardsgrp.com. August 2015 – CryoGas International

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State-of-the-Art Equipment and Extra Safety Precautions

State-of-the-Art Equipment and Extra Safety Precautions Help nexAir Keep Atop Cylinder Filling Trends By Troy Goode While traditional cylinder delivery remains a large portion of our business, we’ve seen a lot of customers buying into microbulk and even bulk gas systems for lower costs, an uninterrupted supply of product and on-site customer inventory management via telemetry. We’ve also realized the extraordinary benefits of utilizing bulk gas systems for filling cylinder gases for delivery, and recently installed a Chart Siphon 100™ Bulk Storage Tank at our cylinder filling plant in Memphis. This is just one of the ways we’ve expanded our capabilities to ensure ease of use for our customers while also staying atop the industry’s most recent trends.

Newest Argon Bulk Tank Saves Time and Money

At nexAir, we are constantly looking for new methods, equipment, or technologies to improve our efficiency, decrease costs and increase product utilization. Qualitative measurement of product losses is essential for reducing gas costs, and we’ve been able to save costs by keeping good production records and effectively controlling our inventory. nexAir invested in the Siphon 100 tank mainly to decrease product losses and save on maintenance costs. Used primarily for filling high-pressure cylinders, liquid cylinders, and transports, the Siphon 100 tank is unique in that it allows us to utilize close to 100 percent of the tank’s contents. By integrating two technologies — a thermal-siphoning system within the tank itself and Chart’s multi-layer Composite Super Insulation™ — we can effectively reduce heat from the inside and outside of the tank. The thermal-siphoning technology repurposes the heat from pumping and keeps the pressure in the vessel low (between 75 and 100 pounds per square inch gauge). The super insulation is roughly 30-70 percent more effective in reducing the heat transfer from 34

nexAir invested in the Siphon 100 tank mainly to decrease product losses and save on maintenance costs.

the outside atmosphere. Reduced heat from within and outside the tank improves our liquid quality and results in increased high-pressure pumping capacity, faster pump cool down, and better gas utilization. We now only see two to five percent product losses per month as opposed to the 10-13 percent we were seeing before — resulting in roughly $4,000 in savings per month. The Siphon 100 tank also has a complete

vacuum-jacketed piping system from tanker delivery to pump, and pump cavitation is reduced by using a vacuum-insulated pod that provides colder liquid to the pump. Extended tank legs add head pressure to the pump without increasing liquid inventory, which also results in improved pump performance. The tank’s lower pressure liquid also increases the life of high-wear parts. Increased pump life results in savings in maintenance time August 2015 – CryoGas International

State-of-the-Art Equipment and Extra Safety Precautions

The Siphon 100 tank also has a complete vacuum-jacketed piping system. Photo courtesy of Chart Industries.

and cost and spare parts, both of which are very valuable to us as we consistently try to ensure that our customers receive orders on time.

Acetylene Plant Improvements for Safety

Also, in response to the Compressed Gas

Association and the National Fire Protection Association requirement that all mobile acetylene trailers (MATs) be under a sprinkler system, nexAir recently completed a project to enhance its acetylene trailer storage and safety at our Memphis plant. We installed concrete fire walls between the acetylene trailers, a rear concrete fire wall, new overhead piping from the trailers to the acetylene cylinder charging plant, and a new water sprinkler system. These upgrades will help ensure our mobile acetylene trailers and the associated storage areas are up to code and also serve as extra safety precautions for the entire plant. At nexAir, we’re constantly trying to provide our customers with the best products for their needs, all while maintaining safety at our facilities. The Siphon tank not only offers industry-leading bulk gas delivery, but is also a more efficient method of delivering Argon. Exercising caution at our acetylene plant is just one of the ways we’ve improved our processes to offer the highest level of safety for our employees and customers.

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nexAir recently completed a project to enhance its acetylene trailer storage and safety at its Memphis plant. Troy Goode is a plant engineer at the nexAir cylinder filling plant in Memphis, Tennessee. To learn more about nexAir’s plant operations, please visit www.nexair. com or email Troy at troy.goode@nexair.com.

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August 2015 – CryoGas International

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How Supply Chain Operating Networks Facilitate the Buying and Selling of Industrial Gases

How Supply Chain Operating Networks Facilitate the Buying and Selling of Industrial Gases By Ed Rusch The Industrial Gas industry has seen tremendous growth over the past century fueled by the development of industry in emerging countries. Many of the companies in the industry like Linde, Praxair, and Air Products have grown through acquisitions and mergers to develop global presences with worldwide operations. Often these businesses continue to have each division act autonomously because the industrial gas business is dependent on local conditions. Many, however, want to stay decentralized yet add additional resources and capabilities to help these local operations become agile, flexible organizations. According to a recent article in Selling Power magazine (sellingpower.com/ content/article/?a=4981/we-want-to-thebiggest-small-company-around), Airgas is just such a global company. Airgas sur-

veyed a representative sampling of its customer base on its various practices in order fulfillment, production, customer service, and distribution to find out what customers want from their industrial gas provider. Per the article, Airgas found out three things from their customers, “They want to be billed properly, they want to be serviced on time, and they want us to ship complete orders.” From a holistic viewpoint, this is something that all buyers want from their suppliers — they want to order their products and have them ship on time for the right price to the right location. Ideally, buyers want their suppliers to provide them with superior service much more than they want low prices. Communication is important, too. Business-to-business (B2B) networks, also called supply chain operating net-

works (SCONs) can help businesses meet these goals, while facilitating the ability to conduct business with each other. For example, should businesses need to exchange key business documents, such as purchase orders, advanced shipping notices, invoices, and more, electronically, they can utilize these robust B2B platforms to conduct business.

How Supply Chain Operating Networks Work

Any transaction between two businesses is considered B2B, whether the businesses are partners, suppliers, or buyers. Anything from orders and invoices to raw material purchases to delivery documents can be sent electronically via a B2B or supply chain operating system platform. Processing costs are reduced, real-time visibility

A Supply Chain Operating Network

Applications SmartLink Apps

Analytics

SmartLink Analytics

Integration

QuickLink Network 2.0

3rd Party

Your Enterprise

Figure 1 36

Source: Elemica August 2015 – CryoGas International

How Supply Chain Operating Networks Facilitate the Buying and Selling of Industrial Gases

achieved, and errors are eliminated via electronic transactions. Today’s SCON platforms are a quantum leap over manual processes, saving critical time and improving productivity by focusing on partner-centric processes, transactions, and communications. A SCON platform has three distinct layers. A Network Layer houses a canonical data layer that enables trading partners to engage in the business network using many data and integration formats and translate them to others. Newer solutions enable multiple formats and protocols. An Application Layer enables trading partners to engage in multi-tier, multiple-party processes. And a Community Layer, which lets companies see community analytics and benchmarking, along with social and relationship capabilities. SCONs automatically manage all connections to trading partners, eliminating the need for each connection to be managed individually. Seamless connections can be via EDI, XML, and other protocols. The platform automates end-to-end business processes that include buying, selling, shipping, and paying for products using documents, transactions, email, and fax. It provides the base where processes are automated and visibility into data and transactions is shared across all parties connected. Within a trading network, partners must be able to connect quickly and easily with standard communication formats. Cloudbased technologies can offer security, scalability, configurability, and reliability — key components of a network designed to accurately exchange critical business information among all partners regardless of technological capability. Every industry has its own standard for connectivity. Allowing partners to connect to the supply chain network via a variety of methods — whether EDI or web browser or other format — means any company can connect at any time, with little to no changes required. The complex orchestration needed for connectivity includes exchanging connectivity and transformation information, identifying security considerations, establishing standards, and developing data transformation routines and special processing rules. With a supply chain network there is an increase of collaborative opportunities August 2015 – CryoGas International

Supply chain operating networks grow in value as more trading partners are connected and able to conduct business with each other. as the number of network participants increases. Businesses can change how they currently source goods and from whom. In this time of driver shortage, hours of service regulations, and capacity shortages, shippers are finding it hard to make deliveries. With a supply chain operating network, shippers can forecast with their carriers that are connected to the network, who will then translate this into a volume by lane schedule in order to get capacity for shipping their products. The value of a network increases as more companies with shipping needs and an increased number of trucking operators carrying cargo join the network. Supply chain operating networks grow in value as more trading partners are connected and able to conduct business with each other. These businesses can leverage their collective activities to achieve better business insight while realizing significant

costs savings. To quickly add trading partners, an easy methodology for connecting to the network is needed. A “come as you are” approach is the key to unlocking the benefits of these networks; this means that businesses don’t have to change the way they do business to utilize the network. This allows for more and more participants to connect — enabling business transformations and automating processes for a critical mass of trading partners that leads to game-changing advantages.

Benefits of Supply Chain Operating Networks

Supply chain operating networks automate business processes such as order entry, procure-to-pay, and transportation management, providing benefits such as lowered transportation spend by 30 percent and improved communication and collaboration with that trading partner. Lower cost to process orders is another distinct benefit. According to “Spend Matters,” companies can reduce the cost of purchase order requisition, submittal, and approval by up to 75 percent with procurement automation. Invoice processing costs can also be reduced by up to 90 percent. The cost to exchange business documents electronically is much cheaper than doing 37

How Supply Chain Operating Networks Facilitate the Buying and Selling of Industrial Gases

• Reduce inventory related costs by 30+ percent

partners easily. For example, if you need a new supplier, you can search the network by equipment, geography, etc. or question participants on the network for suggestions.

• Reduce operational expenses by 30+ percent

Ensure Success

Typical SCON Results and Benefits • Increase on-shelf availability and sell-through to +99.5 percent

• Reduce transportation costs by 30+ percent • Increase operations margins by 30+ percent • Reduce IT investments and expenses by 60+ percent • Improved customer service levels • Fast processing and elimination of human error • Reduced administration costs by eliminating non-automated processes • Transparent end-to-end business processes, also beyond corporate boundaries • Improved management, change handling and order turnaround times • Effective real-time information exchange with any division and trading partner • Fast adoption by onboarding all relevant trading partners within a few weeks

it manually. The larger the business, the more transactions occur, creating even higher savings. SCONs lead to reduced postage costs. The cost of stamps continues to increase each year. Paper invoices and other documents require postage, which can be eliminated by automating the exchange of documents over a supply chain operating network. If your business sends 500 invoices per month, the annual postage savings equates to $3,000, based on first class postage rates. For 5,000 invoices, your business will save $30,000.

Another benefit is the elimination of paper costs. Automating manual processes via a supply chain operating network reduces the use of paper, along with other supplies, such as ink; lowers maintenance costs on printers; and saves on trees. US paper consumption has tripled in the last 38

decade to 700 billion sheets a year (Source: Xerox Research). Imagine the number of trees that will be saved by lowering use of paper as one tree makes 16.67 reams of copy paper or 8,333.3 sheets.

Companies can reduce the cost of purchase order requisition, submittal, and approval by up to 75 percent with procurement automation. SCONs lower inventory levels. When performing procurement operations on a supply chain operating network, sourcing is more efficient and shortens cycle times that lower inventory levels. IT costs are also lowered. Cloud computing technology, which a supply chain operating network is built upon, requires less use of IT resources and management. With the cloud, the expense associated with procuring equipment and performing upgrades is shouldered by the provider, rather than by individual companies using the service. Lastly, SCONs enable easier partner discovery. Like the social networks of Facebook and LinkedIn, with a supply chain operating network you can discover new

Here are some useful tips that will help ensure your supply chain operating network implementation is a success. Going from manual to automated processes can be challenging for stakeholders, so make sure everyone is on board with the project and understands the advantages of the implementation for the business, such as improved productivity and lower costs. Make sure the integration with your ERP system goes smoothly. Utilize robust and tested tools that your supply chain operating system network provider provides. These should allow integration using a variety of protocols, from EDI to XML to FTP and more. Choose a “come as you are” approach to the network so that the implementation doesn’t require you to change the way you do business. If you want to use EDI, then make sure you can continue to do so. Ensure your supply chain operating network has a rapid onboarding program in place, which automates many of the mundane tasks, making it much quicker and easier to add participants to the network.

Win-Win

A supply chain operating network is a winwin for buyers and sellers of industrial gases. Over the next few years as more and more millennials enter the workforce who are used to working with collaborative, social networks like Facebook, the adoption of these B2B networks will only continue to grow. This will be a huge transformation in how business is conducted. That ability to interact, initiate transactions and search, including via mobile, will be second nature to the new workforce, and companies will need to adapt. Why not get on board now and improve your customer service, streamline operations, collaborate better with trading partners, and add to the bottom line? Ed Rusch is Vice President of Corporate Marketing for Elemica, elemica.com. He can be reached at ed.rusch@elemica.com. August 2015 – CryoGas International

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Four Tips for B2B Social Media Engagement

Four Tips for B2B Social Media Engagement By JJ Koczan It’s a tricky world in both actual and virtual reality. Not only do businesses have to attract customers and sell them a product, but “online” they need to do it on a personal level while at the same time protecting a brand, taking care not to offend or put anyone off, and promoting themselves without being overly promotional or a nuisance. Viral videos are great, photos of cats are great, but what on earth could they possibly have to do with industrial or specialty gases? There are distinct advantages and disadvantages to selling B2B, as you likely already know if you’re reading this. To some extent, you and your customers are on the same side — both working to reach a wider public. Whether you’re producing or distributing gas or welding equipment, manufacturing hardgoods, or blasting cylinders with CO2, you can be relatively sure that even if they need to be informed about your product or service, your customers will have a certain level of understanding of the industry in which you both operate. This is not a piece about numbers. That might be frustrating if you’re looking for hard figures, but let’s face it: You can have all the analytics in the world from all the tech specialists on your staff, and it’s not going to mean anything if you’re not going about engaging with your customers the right way over the longer term. Below are a few concepts to keep in mind when strategizing social media — whether that’s YouTube, Twitter, Facebook, Instagram, whatever — to speak B2B.

1. Recognize Your Public

If you know to whom you’re speaking, it’s that much easier to interact. Tone and meaning can be very ambiguous in any online communication — something you already know if you have ever had an email or a text message read with the wrong inflection, someone takes a joke seriously, etc. — so clarity of language and reasoning is a factor no matter what. That’s one up side of Twitter; with just 140 characters at 40

your disposal, there’s less room to get lost. Still, even with that, a marketing professional knows how pivotal getting the right message out can be. Facebook is flooded with nonsense and clickbait — fluff from websites used for nothing more than distracting readers into upping page views and thus advertising revenue — so if you come to it with the approach of a specific target audience, you are that much better off in the long run, and the metrics, when they come, will back that up. This leads me to the next point…

2. Realize the Advantage You Have

It’s well worth remembering that, since you’re selling B2B, you’re already ahead of the game in identifying that target market. You know your customers if you’re in sales, and if you’re in marketing, you know who the sales team is trying to reach. The mystery is, to an extent, gone. This is a huge plus over those companies trying desperately to cloy at a piece of the general

To some extent, you and your customers are on the same side — both working to reach a wider public. public. Particularly in IG where the names are familiar, having a niche takes the guesswork out of the process and means there is automatically a level of interest in who you are and what you do. If you don’t already consider yourself lucky for that, you should. That is not at all to say it’s always going to be easy — it isn’t, and we’ll get to that below — but the gases industry on social media is a narrowed marketplace, and that is immediately crucial in making the target easier to hit. All you have to do now is hit it.

3. Be Useful

Well, of course, right? It’s something that shouldn’t need to be said, but absolutely does. You can flood Facebook with all August 2015 – CryoGas International

Four Tips for B2B Social Media Engagement

the baby animal videos you want, but it’s not going to sell your products, and after a while, you run the risk of annoying your audience to the degree where, when you actually have something to tell them, you’ve already long since been ignored. Be useful. If you have news to share, share it. If not, don’t. Noble Gas Solutions (facebook.com/NobleGasSolutions) walk this line particularly well. Maybe you want to Instagram a photo of an employee on their birthday, or take a gorgeous picture of the sun setting behind a brand new ASU tower. Fair enough. But keep it related to your business, and at very least ask yourself the question, “Is there a point to posting this?” You’d be amazed how many people obviously don’t. As a word to the wise, YouTube is a gargantuan asset and very much underused in sales. A couple years ago, Massachusetts’ FIBA Technologies, Inc. (fibatech.com) explored giving virtual samples through the site, and as sales supplements, the result let a customer see the product in action with more direct access than a product description could hope to give. You don’t have to make professional-grade commer-

cials every day, but the ability to visually and aurally explain what your product is and why your buyer needs it in high definition, speaking right to them, is an asset to be exploited. Shoot a 45-second product profile on an iPhone and see if I’m wrong.

4. Be Patient

“Social media” — a vast, nebulous expanse, and a moving target if ever there was one with the shift toward mobile systems — is not a thing to be won in a day. We do not live in a world where one picks up a phone, cold-calls somebody and there is an instant relationship developed. It has always taken real time to build your brand and your reputation, and while the online world appears to move instantly or at least faster than anything before it, that’s still true. Have patience. Metrics will tell you a lot about who is

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clicking what and when, but whether you are in marketing, sales, or working in a supervisory capacity, you need to be able to step back from “10 post clicks” to focus on the larger vision of how you are portraying your brand and serving your customers. Ultimately, they are the ones who will decide how successful your efforts are. If you expect results within a week, a month, or a year, you’re going to be disappointed. This is another branch of your business altogether, not a temporary trend to jump on, and it’s going to take time to stake a claim within it.

One Last Thought

If you’re in the process of putting together an approach or plan for social media, don’t forget that everyone likes the handy organization of a numbered list. By way of proof, you just read one.

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August 2015 – CryoGas International

Calendar 2015 August 3–7, 2015 Cryogenic Engineering Safety Course Colorado School of Mines cryocourses.com August 5–6, 2015 GAWDA Chicago Regional Meeting Lake Geneva, Wisconsin gawda.org August 10–11, 2015 GAWDA Regional Meeting N. Stonington, Connecticut gawda.org August 11–12, 2015 AWS High-Temperature Metals Conference Chicago, Illinois aws.org/conferences August 16–22, 2015 24th IIR International Congress of Refrigeration Yokohama, Japan icr2015.org

September 9–10, 2015 GAWDA Gettysburg Regional Meeting Gettysburg, Pennsylvania gawda.org September 13–16, 2015 AIWD Annual Convention New Orleans, Louisiana aiwdconvention.com September 13–18, 2015 17th International Conference on RF Superconductivity British Columbia, Canada srf2015.triumf.ca/ September 15–17, 2015 WESTEC 2015 Los Angeles, California westeconline.com September 22–24, 2015 AWS 18th Annual Aluminum Conference San Diego, California aws.org/conferences

October 11–14, 2015 GAWDA Annual Meeting Scottsdale, Arizona gawda.org

October 27–30, 2015 Gastech 2015 Singapore gastechsi.com

October 20–21, 2015 CGA Safety & Reliability of Industrial Gases, Equipment and Facilities Seminar Tampa, Florida cganet.com

November 9–12, 2015 FABTECH 2015 Chicago, Illinois fabtechexpo.com

October 20–21, 2015 Gulf Coast Conference Houston, Texas gulfcoastconference.org

November 15–19, 2015 Fuel Cell Seminar & Energy Exposition Los Angeles, California fuelcellseminar.com

October 26–27, 2015 Trade & Trends Food Show Secaucus, New Jersey ttfoodshow.com

November 16–18, 2015 Eastern Analytical Symposium Somerset, New Jersey eas.org

October 26–29, 2015 HHP Summit 2015 Dallas, Texas hhpsummit.com

December 7–9, 2015 gasworld Middle East and North African Conference Dubai gasworld.com

October 27–29, 2015 SOUTH-TEC 2015 Charlotte, North Carolina southteconline.com

August 2015 – CryoGas International

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Inside Back Cover

Computers Unlimited www.timssoftware.com/cloud

CryoGas International www.cryogas.com

27,41

Cyl-Tec, Inc. www.cyl-tec.com

Edwards Group International www.edwardsgrp.com

Gas Equipment www.gasequipment.com

Generant www.generant.com

The Business Value of Business Intelligence and CryoGas International Did you know that CryoGas International is the only North American business journal that offers annual reports on the industrial gas market, including special in-depth analysis of helium, atmospheric gases, carbon dioxide, hydrogen, LNG, and the rare gases market? CryoGas reports are written by industry insiders — industrial gas experts, not outside general consultancies — and are based on 25 years of industry research and data analysis. Now available online with a subscription to CryoGas International, our reports are critical to your business intelligence gathering. Bring your Business Intelligence unit into the 21st century with our new online capabilities that allow you to search our archives for past and present gas market trends and analysis.

GOW-MAC www.gowmac.com

Hoffer www.hofferflow.com

IG China www.igchina-expo.com

INOXCVA www.inoxcva.com

Miller-Stephenson Chemical Co., Inc. www.miller-stephenson.com

McDantim www.mcdantim.com

Orange Research www.orangeresearch.com

Saf-T-Cart www.saftcart.com

SGS (SGD) www.sgd.com

Sherwood www.sherwoodvalve.com

Tech Air www.techairfirststep.com

TOMCO2 www.tomcosystems.com

TrackAbout www.stopprofitleakage.com Veite www.veitecryogenic.com Walter H. Jelly Ltd. www.walterjelly.com Weldcoa www.weldcoa.com

To learn more, visit www. gasworld.com/magazines/ cryogas/ or call us at 781-862-0624

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10 Inside Front Cover 19 Back Cover

Western International www.westernintl.com

Worthington www.worthingtoncylinders.com

August 2015 – CryoGas International

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