2023 Supplier Forecast

BY STEVE GUGLIELMO

The following are responses from GAWDA suppliers across North America about what they expect to see in 2023. Many experienced a return to normalcy in 2022, though several commonalities emerged including: a skilled labor shortage, supply chain issues, and inflationary pressures. While those problems will remain throughout 2023, the overall consensus among GAWDA suppliers is that this will be a year of growth, although not the robust growth we saw pre-COVID. We thank all of the GAWDA suppliers who participated in this year’s forecast. Be sure to check out the GAWDA Online Buyer’s Guide (buyersguide.gawdamedia. com) to see individual company responses.

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Hector Villarreal, President WELDCOA

Weldcoa President Hector Villarreal anticipates seeing 10% growth or greater in 2023, even in the face of the persistent headwinds of a tight labor market. “The demand exists. Based on the amount of quotes we are generating, demand continues to increase,” he says. “For us, the capabilities exist. Lack of manpower is the issue.” The company is industry-renowned for its constant product development and improvement, something that Villarreal attributes to its client-driven process. “Weldcoa’s R&D is a little different than most companies,” he notes. “Our clients drive our product development process. They contact us with their issues, and they ask us for a solution. As such, we are constantly in a state of new product development.” With that in mind, 2023 projects to be a strong year for both Weldcoa and the industry.

` Frank Salvucci, President ANTHONY WELDED PRODUCTS

“Anthony Welded Products will press further into areas of the cylinder handling/storage space that we have not pursued aggressively in the past,” says President Frank Salvucci. “ We look to grow our cradles, cages and pallets sales to complement our cylinder carts, led by our legacy model, the load-n-roll series.” This will help lead the company to an expected 10-15% growth in 2023. “ These offerings are in response to the growing efficiency trend of distributors using the pallets throughout their fill plant and delivery processes to handle 12-15 cylinders at a time,” Salvucci says. “The cages, especially the ones with the pallet on the bottom, go along with the same palletization infrastructure that we are seeing an upward trend toward. We are actively listening to our customers and meeting their needs even if it is a custom order. We have the engineers and processes to be flexible with our products to meet the needs of distributors and their end user customers. Another initiative for 2023 is to continue the expansion of our Texas plant to increase capacity and efficiency including automation lines for our cradles, cages, and pallets.”

` Tim Fusco, CEO TRACKABOUT, A DATACOR COMPANY

Trackabout, a Datacor Company, will parlay expansion with its existing customers and acquisition of new customers into a projected 17% growth in 2023, according to CEO Tim Fusco. “New business software is a big opportunity for gas distributors,” says Fusco. “This is a key way to get more efficient with all of the assets of the business. It is a key way to learn to do more with less over time.” Fusco says that Trackabout will “Continue to work with Datacor ERP to bring a new option for business software to gas distributors. By bringing together best-of-breed software systems for managing a gas & welding supply business, Datacor is working to raise the bar for software for gas distributors.”

` Bob Ranc, National Sales Manager MK PRODUCTS

Bob Ranc , National Sales Manager for MK Products, projects a 5-6% increase in sales over 2022. “We expect the first half of the year to be good with a slowing as we head into the second half,” Ranc says. MK has plans to introduce new products in 2023, which will contribute to that projected growth and expand MK’s breadth of products. In addition to an increase in sales for MK Products, Ranc projects the industry to see a rise next year as well. “We look forward to working more closely with GAWDA distributors on our products,” he says. Of course, the best laid plans can all go awry depending on the political climate. Ranc concludes, “Can Washington get it together and do the right things?” continued on next page

` Jim Johnston, Executive Vice President

KAPLAN INDUSTRIES, INC.

Kaplan Industries, Inc. anticipates a 5% growth in 2023, according to Executive Vice President Jim Johnston . “We anticipate business to be up over 2022 levels for the gas and welding industry,” Johnston says. “From industry forecasts, feedback from our customer base, and continued strong back log, we remain positive that 2023 will show growth.” He continues, “For our distributors, we see reduced lead times in 2023 and some stabilization of costs improving opportunities for them to capture new business in 2023. With that being said, the political and financial climate in the U.S. is fragile, a possible recession could take the wind out of all our sails.” This year, Kaplan Industries will continue to improve areas that haven’t been cost-effective including by implementing automated linear production to increase throughput and reduce in-house lead time. The company will continue to expand its fast-growing Hydrocarbon business for the cannabis industry, with increased bulk storage capacity and improved filling times. And one of its most important initiatives will be to continue to cultivate a positive work environment to maintain an efficient workforce during a time when maintaining employees has been a challenge for all businesses.

` Anna Clark, Sales Director ANOVA

“Anova remote monitoring solutions are increasing in demand from GAWDA distributors,” says Sales Director Anna Clark. “Distributors are realizing the increased profits and business efficiencies Anova remote monitoring creates for optimal scheduling, meaningful data analytics, and insightful reporting.” The company expects to see sales increase in 2023. “Data has immense value,” Clark says. “Distributors are already realizing the significance in digitizing assets for optimal business performance and increased profits. Remote asset management in the industrial world will increase in the coming years as distributors realize more and more gains from remote tank telemetry. Technology is leading the way for better business. Data has value and Anova provides the tools required to use that data to increase profits, boost customer satisfaction and reduce carbon emissions ” She concludes, “Our remote tank telemetry software and best-in-class customer service provides seamless asset management for the client and end-consumer. Our goal is to make sure customers gain as much value possible out of their existing data to increase profits, enable easier business operations and ensure happier end-consumers.”

` Michael Veite, President VEITE CRYOGENIC EQUIPMENT AND SERVICE

Continued fallout from COVID leads Veite Cryogenic Equipment and Service President Michael Veite to project a level year, both for VCE and the industry. “It’s so hard to predict,” Veite says. “Everybody is still dealing with the fallout. The inability to get product on-time and prices skyrocketing has made it hard to project where the economy is going.” Still, Veite sees opportunities on the horizon. “As distributors continue to open satellite stores and fill plants, we see lots of opportunities there. That’s our A game and we are well-positioned to work with our customers on these new plants.”

` Frank Heenan, Group Vice President Distribution and LBM EPICOR

“In 2023, we anticipate seeing double-digit growth for Epicor’s Distribution group – which will be a combination of new business, but also activity within the existing customer base,” says Frank Heenan, Group Vice President, Distribution and LBM, Epicor. “This will be impacted by a number of drivers. If the economy slows, distribution companies typically use the time to look at internal processes and seek improvements in efficiency. With current staff shortages, they’ll also look for opportunities to simplify and automate processes. We’re seeing more and more distributors moving to the cloud in an effort to reduce the IT burden and sure up security concerns they may have with their technology footprint or environment. These trends bode well for Epicor, as our ERP solutions are proven to help distributors increase efficiency, productivity, and revenue. Moving forward, we expect a few factors to play a role in the economic forecast for distributors in 2023: fluctuating fuel prices from the ongoing events in Ukraine, continuing challenges within the post-covid supply chain, and the evolving political landscape in the U.S. as an election year approaches. We encourage distributors to be introspective this year. Define areas for improvement. Look at your supply chain and operations – identify where you can be more efficient, automate, reduce error, and increase security. Use this year to uncover and implement internal opportunities to enhance your bottom line.”

` John Kaylor, President ABICOR BINZEL USA

New product launches and market share gains in 2023 will lead to an increase in sales above 5% for Abicor Binzel USA, according to President John Kaylor, even in an expected level year for the gases and welding industry. Kaylor predicts that while price pressures have lessened from the 2021-22 period, they will continue to be an issue this year and that GAWDA distributors should be aware of and prepare for them. He notes that Abicor Binzel will be making “large investments in U.S. production expansion to minimize global supply challenges.”

` Rafael Arvelo, General Manager EQUIGAS, INC.

EQUIGAS, Inc. expects to see robust growth of more than 15% in 2023, says General Manager Rafael Arvelo. “Even though we are technically in a recession, we still have a solid economy, unemployment is still below 4% and reshoring projects will not slow down,” Arvelo says. “Production needs to move back to the U.S. ASAP. In 2022 alone, reshoring added 350,000 employees to U.S. soil.” This will be an exciting year for EQUIGAS, as the company looks to move into a larger building in North Carolina and open new locations in the U.S. Arvelo also notes that EQUIGAS will be launching two new brands that will benefit mostly independents. He concludes, “I understand that the forecast for 2023 and 2024 may not be pretty. However, I deeply believe that our industry will still have some growth. Trust your instincts, be ready, and don’t believe everything you hear in the news.”

` Paul Kinsella, President EXOCOR FILLER METALS

Exocor Filler Metals President Paul Kinsella expects to see growth for the company in 2023, even as he anticipates the overall industry to see a dip. “After much better than market growth in 2022, we feel that our pace will moderate this year and finish higher by 7-9%,” he says. “Recessionary pressures will offset some of our market share increases.” Exocor expanded its U.S. headquarters and warehouse in January and continues to actively expand its geographical reach to a greater share of the U.S. market, complementing its sales presence throughout Canada. Kinsella adds, “We continue to add new products and the re-introduction of our welder friendly Non-Copper Coated 70S6 wire, with much less in the line of fumes and spatter, is the future for a healthier and cleaner manufacturing environment.” He concludes, “Supply issues will still be front and center in 2023 and driven by the same global turbulence that could be causing headwinds on business growth. Dramatically increased energy prices, brought about by both natural causes and manmade decisions, negatively impacting all aspects of supply and pricing and disruptions in production in various geographies that are critical for production of some commodities is not just possible, but a given.”

` David Ellis, Vice President, Sales & Business Development, Compressed Gas Division CAVAGNA NORTH AMERICA

Cavagna North America expects a slowdown in the second half of 2023, according to Vice President, Sales & Business Development, Compressed Gas Division, David Ellis. That dip can be attributed to the overall inflationary environment, as well as the global increase in energy prices. Says Ellis, “All growth for 2023 is planned by introducing new products. Cavagna has launched a complete range of compressed gas regulators for the cutting and welding space. Additionally, we have introduced a smart meter for the propane market that will allow gas suppliers to manage customers and gas storage with IOT. As the medical market continues to move to smart technology, our digital Valve and Integrated Regulator for oxygen offers real time information to the medical professional.” Ellis also offers sage advice for

GAWDA Distributors. “Protecting supply chain continuity is a lesson we all learned. Form alliances with suppliers so that your company is assured of uninterrupted supply of critically important raw materials,” he says. He concludes by saying, “Energy will continue to challenge everyone. Transportation costs due to the high cost of diesel continue to affect prices across all businesses. Any protracted strike in the rail industry would have a demonstrable effect on the entire economy.”

` Kurt Tarkany, National Sales Manager SUPERFLASH COMPRESSED GAS EQUIPMENT

“Our business has been getting stronger each year as our partnerships with new and existing customers continue to grow,” says SuperFlash Compressed Gas Equipment National Sales Manager Kurt Tarkany. “ We believe that the hangover effects from COVID will be further in the rearview mirror making the outlook incredibly positive for 2023.” Those factors will contribute to an expected 15% increase in sales for SuperFlash this year. “GAWDA distributors have worked hard to navigate through the difficult landscape of the past couple of years, and we have seen how so many of them are coming out on the other side stronger than ever before,” Tarkany notes. It is an exciting time for SuperFlash as the company has “added a line of mobile gas analyzers for Modified Atmospheric Packaging. Combined with our line of gas mixers, these products are ideal for the food packaging customers that use distributors’ gases for food packaging manufacturing. We also are breaking ground on a new location in the Phoenix area that will increase our footprint out west to go along with our locations in Florida and Ohio.”

` Jeff Holyoak, VP Sales & Strategic Development TOMCO SYSTEMS

“CO2 shortage aversion for the year will constrain recovery and efficient use of CO2 for the year, thus big capture and reuse projects may be another year out,” says Jeff Holyoak, VP Sales & Strategic Development, TOMCO Systems. “With CO2 in solid supply I think we'll see some of the market rebound, specifically in dry ice. But large capital projects and potential for cutback in other industries will depress bulk storage demand.” Overall, Holyoak expects a 10% growth for TOMCO Systems and a level year for the industry. “Cannabis and grow houses will continue to grow,” he notes. “Increased usage and application of CO2 will improve opportunities. CO2 shortages won't be as bad as 2022, but when they hit in Q3 there will be a quick reminder of how impactful they are.” He concludes, “We will continue to expand our CO2 capture and recovery business to ensure increased supply of CO2, greater green initiatives, and enable customers to take advantage of 45Q. Additionally we'll see some new innovations in dry ice production as that market continues to expand.”

` Matt Boettner, President and CEO ALL SAFE GLOBAL

Matt Boettner, President and CEO of All Safe Global, expects to see a sales increase of more than 7% in 2023. That growth will be driven in large part by continued spending in industrial infrastructure and growth in welding applications. He expects the industry overall to see growth as well, but notes that it will be “at slower growth rates than 2022.” This year, All Safe Global plans to invest in additional space for its cylinder requalification centers to expand capacity in the Midwest, Southwest, and to establish a presence in the eastern U.S. He concludes by saying, “Overall slowing of consumer spending in the second half of 2023 may lead to less consumer driven gas consumption such as Beverage CO2.”

` Lexi McDermott, Welding Sales Specialist

DYNABRADE, INC.

2023 projects to be a strong year for Dynabrade, Inc. according to Welding Sales Specialist Lexi McDermott. “Dynabrade anticipates close to 20% growth in the welding channel, and an average growth of 10-15% across all other industries we sell into,” she says. As others have noted, supply chain continues to be a challenge. “We have continued to see a growth in our incoming orders over 2022. We are assembling and shipping products as soon as the parts arrive but are at the mercy of the supply chain to be able to support the increased demand,” McDermott says. “We have taken steps to diminish the delay by acquiring our largest parts supplier and increasing the number of parts manufactured there. We have goals to acquire other companies to further our market growth.” Dynabrade is constantly working on and releasing new tools and tool configurations to improve its product offerings. McDermott says that 2023 will be no different, as Dynabrade will have numerous new products ready to launch this year.

` Tom Kairys, VP of Sales and Marketing CP INDUSTRIES

“I expect sales to be up due to independent distributors looking at ways to be self-sufficient in storing and transporting helium and hydrogen,” says CP Industries VP of Sales and Marketing Tom Kairys. That will help contribute to a projected 15-20% growth for CP Industries in 2023. Other factors contributing to that growth will be the continued emergence of alternative fuels for vehicles and the infrastructure that will be needed to achieve carbon neutral goals. “We are looking at some new developments and possible upgrades to our facility,” Kairys says of the company’s plans for 2023. He concludes, “The biggest opportunity that I see for the independents would be that the majors are focusing on the larger bulk accounts and neglecting the small to medium sized customers that are using bulk gases or could be prospects to use bulk gases with the right kind of mode change. Disruptors would include continued consolidation and acquisition of distributors and the emergence of new players in gas manufacturing.”

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Tony Robbins, National Account Manager THUNDERBIRD CYLINDERS

Post-COVID, medical cylinder demand has decreased, leading Thunderbird Cylinders to project a decrease in sales in 2023. Says National Account Manager Tony Robbins, “Most companies have warehouses that are full of cylinders. These inventories will need to be reduced before you see orders begin to pick back up to pre-COVID levels.” This is an industry-wide issue, leading Robbins to project a down-year industry wide. Thunderbird continues to eye growth opportunities, either in “new customer/ product development or through acquisitions,” says Robbins.

` Chris Finn, Director of Sales FINNCO VAPORIZERS

A long backlog combined with strong sales projections lead FINNCO Vaporizers Director of Sales Chris Finn to project an up-year in 2023. The company will debut a new location for manufacturing this year, which will also help contribute to a strong year. Finn notes that in addition to a growth year for FINNCO, “all indications are that sales will be up” for the gases and welding industry in 2023.

` Matt Cable, President BUG-O SYSTEMS

Though inflation, interest rates, and labor shortages will continue to be an issue in 2023 and beyond, BUG-O Systems still anticipates a growth of 5% in 2023. President Matt Cable notes that these challenges “will drive more manufacturers and fabricators to look for new methods to mechanize and automate their welding processes.” Even with those headwinds, Cable still sees an overall year of growth for the gases and welding industry.

` Jack Walters, III, President AMERICAN TORCH TIP

American Torch Tip President Jack Walters III projects an increase in sales in 2023. He notes that there is still a manufacturing backlog, which will help contribute to that growth. However, he cautions that, “We still believe there are ongoing supply chain issues in the market. Also, all of the CAPEX purchases are still behind in delivery.” However, he notes that, “ATTC offers advantages if you are trying to keep old equipment running or want to improve efficiencies in new builds of equipment.” Walters lists the three biggest opportunities that he feels GAWDA distributors should be aware of in 2023 as: automation and accessories, how to improve supply chain, and offering customers way to improve costs and efficiencies. He concludes, “Product development is an ongoing push for ATTC to grow our business. International competition is important for all U.S.-based manufacturers. Coming up with ways to decrease costs all while improving efficiencies is critical to win these competitions. One of ATTC's main objectives is to help solve these challenges.”

` Mike Arcieri, Vice President of Sales WELDSHIP CORPORATION

Weldship Corporation anticipates a 10% growth in 2023, according to Vice President of Sales Mike Arcieri. “ We expect sales to be up this year as we continue to see the demand for gases worldwide stay high. We anticipate the high demand and have positioned ourselves to meet customer needs,” he says. As others have noted, supply chain issues will continue to impact the market in 2023. “As we continue to move away from the impact of COVID-19, we remain in a period of uncertainties for global shipping delays. We look at the trends within the industry and make decisions which we believe foresee the future needs of customers by preparing orders in advance, rather than reacting to inquiries as they come in. As companies are adapting to supply chain delays around the globe, we advise customers to focus on their equipment needs in the future and place orders well in advance of the date they will be needed on site. By planning ahead, we are given the adequate time to find and offer fleet tube trailers or build newly manufactured trailers.” He concludes, “We are always looking to expand our business through new product lines or growth in location. As we continue to manufacture the highest demanded equipment in tube trailers, ASME ground storage, and ISO containers, we stay current on the industry advancements and will continue to expand our product line with new ideas and designs. We are prepared for another strong year in 2023. We have done our best to adapt to the growing challenges that have emerged from the backlash of COVID-19 and feel that we have positioned ourselves to meet the demand of high-pressure gas storage.”

` Michael R. Hopsicker, CEO RAY MURRAY, INC.

Ray Murray, Inc. will see a projected growth of 3-5% in 2023 based on the impact of its new products and entering a new market segment. CEO Michael R. Hopsicker and Compressed Gas Equipment Product Manager Mark Jenny expect to see the overall gases and welding industry be level for the year. “Some experts are predicting copper to be up 40% next year and as much as 100% in the next two years,” Hopsicker and Jenny say. Ray Murray plans to add new products in a couple of its market segments, as well as target new market segments this year. And while the company expects a strong year in 2023, it cautions that “the political push toward decarbonization could have a big impact on the industry over time. Clean energy sources like renewable propane and renewable natural gas are being unfairly banned in several states. This needs to change. We all want a cleaner planet but banning all fossil fuels is not the answer.”