During the yesteryears, the end-user application industries of industrial gases have expanded as well as evolved tremendously. Application of such gases are no longer limited to the parent chemicals and petrochemicals sector, but with refinement in its peculiarities over a period of time, industrial gases have found novel application verticals including electronics, food, and beverage(including packaging and storage) and transportation as well. Leveraging the wave of rapid industrialization, particularly in the developing economies of APAC, southeast Asia industrial gases market is poised for exponential growth. Immaculately organized retail sector in countries such as India, China, Thailand, and Singapore has augmented the uptake of packaged food and beverages. Moreover, the trend of e-commerce has also uplifted demand of the same.
As a consequence, the employment of liquid nitrogen and liquid carbon dioxide is intensely increasing in South East Asia. A combination of these gases assists in rapidly freezing food items such as meat, vegetables, fruits, and dairy products. Similarly, as hydrogen is essential in the process to hydrogenate unstable, unsaturated hydrocarbons and fatty acids in animal and vegetable oils, the agriculture-affluent economy of India, China, and, Thailand, and Myanmar, catering to its trade of food products is adding further impetus to the hydrogen industrial gas market demand. Another pivotal trend positively influencing the South East Asia industrial gases market growth is the increasing adoption of compressed natural gas and liquefied petroleum gas (CNG&LPG) vehicles in China, India, and Thailand. As these South East Asian economies are developing towards the application of alternative fuel in vehicles, the rapidly evolving transportation sector stands out as a lucrative end-user vertical for industrial gases. The dominance of APAC in global steel production is unchallenged.
Moreover, with Thailand, China, and India leading the array of countries involved in the trade of steel, demand for industrial gases employed in the production of steel and metal processing are witnessing proliferation. For instance, oxygen is an integral constituent in the process of steel manufacturing as it enhances combustion air and escalate combustion temperatures in blast furnaces and open-hearth furnaces and also oxidizes unwanted impurities in the steel. Apart from oxygen, acetylene is also employed for cutting and welding mild steel. Hence, various end-user industries in South East Asian economies such as India, China, and Thailand are flourishing due to industrialization and bourgeoning population creating demand for increased industrial productivity, eventually adding impetus to the industrial gases market. The southeast Asia industrial gases market size was evaluated to be $2.86 billion in 2018. Also, with trends such as packaged food and beverages and CNG&LPG vehicles, opportunities in the market are progressing at a CAGR of 5.26% during the forecast period of 2019-2025.
An analysis of developments in the principal industries adjacent to Thailand industrial gases market:
After an acute analysis of the demand for industrial gases by various South East Asian economies that includes Indonesia, Malaysia, Thailand, Singapore and parts of India and China, Thailand is evaluated to be having the majority of shares in 2018. Thailand, with its flourishing automotive, steel and electronics industry, had a share of 26.11% in the South East Asia industrial gases market size. According to the International Trade Administration, Thailand is the 7th largest steel importer with import volume in 2018 recorded to be 7.5 million metric tons. Robust development of Thailand in the spectrum of steel can be well indicated by the fact that steel import in this country has escalated by 184% since 2009. Also, more than 60 countries and territories are its import sources. Adjacent to the steel sector, Thailand’s automotive sector is also witnessing exuberant growth as it hosts a major auto assembling industry in Southeast Asia. With the presence of Toyota Motor Corporation, Honda Motor Company, Ltd. and Mercedes Benz, cars and cars parts are among the prime export commodity of Thailand. As indicated by the latest statistics by OICA, some of the South East Asia economies such as Thailand, Indonesia, and Malaysia grew by 9.0%, 10.3 %, and 12.2% respectively in its automotive sector output. As steel and automotive, both the sectors are avid employers of industrial gases for numerous applications such as oxidizing, automotive coatings, tire cutting, and metal laser welding, sustainable growth of Thailand in these sectors is the prime factor creating humongous demand for industrial gases. Apart from industrial applications, increasing consumption of gas by the Thailand transportation sector is adding further impetus to the South East Asia market demand. The number of vehicles running on natural gas (NGVs) in Thailand is estimated to be 474,486 as of 2019, and the country is among the top 10 economies with the highest gas consumption for transport. Apart from Thailand, other countries from South East Asia in the list include China and India with NGV fleet stated to be 6,080,000 and 3,090,139.
Rapidly growing electronics and semiconductors manufacturing industry in APAC creating lucrative opportunities in South East Asia industrial gases market:
According to the Semiconductor Industry Association, global semiconductor sales increased by 13.7% in 2018, with a value estimated to be $468.8 billion. An unprecedented shipment of 1 trillion units was recorded in the same year. Annual sales witnessed an increment among several regions globally, but China led by 20.5% with APAC increasing by 6.1%. As numerous countries from Southeast Asia are globally leading the trade of semiconductor devices and integrated circuits catering to the trend of digitalization and autonomy, demand for industrial gases by electronics and semiconductor manufacturing industry is increasing in this region. Some of the gases in pure form as well as mixed, employed for a specific application in electronics and semiconductor fabrication includes argon, carbon dioxide, chlorine, ethane, helium, and hydrogen.
Similarly, mass production of integrated circuits requires several gases for an array of operations in manufacturing, which includes silicon growth, etching, doping, system puring, and sputtering. According to the Observatory of Economic Complexity (2017), Malaysia is the 4th leading exporter of semiconductor devices globally with an export value of $7.55 billion. The list is dominated by China, Japan, and ‘other’ Asia securing the top 3 positions with an export value of $28.5 billion, $8.38 billion and $7.74 billion respectively. Similarly, the top exporters of integrated circuits (IC) globally are ‘other’ Asia, Singapore, South Korea, China, and Malaysia with the exported value recorded to be $170 billion, $ 115 billion, $104 billion, $80.1 billion and $55.7 billion respectively.
Southeast Asia Industrial Gases Market Companies:
Some of the companies operating in the market are Linde plc, BASF SE, Air Liquide S.A., The Messer Group GmbH, Taiyo Nippon Sanso Corporation, SAJI, Thai-Japan Gas Co., Ltd., Amata Industrial Gas Co., Ltd., Samator Group, Iwatani Corporation.
As food and beverage are the fastest growing (7.45% CAGR up to 2025) end-user industry in South East Asia industrial gases market, key players are strategically investing into mergers and acquisition to strengthen their output of nitrogen gas. Nitrogen is used to preserve the freshness of packaged foods, and its also prevents oxidation of food, and thus delay rancidity and other forms of oxidative damage. In 2018, Amata Corporation Plc announced a joint venture with Bangkok Industrial Gas Co for nitrogen gas business. The joint venture is estimated to produce 50,000 tonnes of nitrogen annually.
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