GCC industrial gases market to rise 7.3% till 2022
Upcoming mega events in the GCC, including Dubai Expo 2020 and FIFA World Cup 2022 in Qatar, will continue to drive construction activity, fuelling demand for industrial gases
The GCC industrial gases market is forecast to increase at 7.3% compounded annual growth rate (CAGR) during the forecast period 2016-2022, and reach $1,270.1 million in revenues, Persistence Market Research said in its Long-term Outlook report, as published by Saudi Gazette newspaper.
Consumption of industrial gases in the GCC will reach 3.75 million tonnes in 2016, witnessing an increase of 5.4% over 2015. Chemicals and petrochemicals will continue to be the largest application segment for industrial gases in terms of volume in 2016, accounting for 815.6 kilo tonnes (KT) in 2016, up from 772.2 KT in 2015.
Upcoming mega events in the GCC, including Dubai Expo 2020 and FIFA World Cup 2022 in Qatar, will continue to drive construction activity, fuelling demand for industrial gases. Demand is expected to pick up in non-oil sectors, as prevailing subdued oil prices continue to drive focus on reducing dependency on oil exports.
Saudi Arabia will continue to be the largest consumer of industrial gases in 2016, accounting for a revenue share of 46.8% in 2016. Saudi Arabia is the leading economy in the region and country’s strong chemicals & petrochemicals sector will continue to ramp up demand for industrial gases in 2016 as well.
Region-wise, the report states that the UAE will be the second largest GCC industrial gases market, representing market revenues worth $190.6 million – an increase of 6.8% in 2016 over 2015.
Among all the types of gas, oxygen will continue to account for leading market revenue share in 2016, owing to high consumption in chemicals, petrochemicals, refining, metals and fabrication industry.
Demand for argon gas will witness highest growth rate in 2016, owing to its increasing utilization in metallurgy, welding and metal fabrication applications.
While refining application segment will lead overall GCC industrial gas revenues in 2016, metals and metallurgy segment will increase at highest growth rate in 2016. Increasing infrastructural development activities are expected to be the major driver for consumption growth of industrial gases in metals & metallurgy application.
Leading players such as Gulf Cryo, The Linde Group, Air Liquide etc. are focussing on reducing operational and distribution costs to consolidate their position in the market.
Merger and acquisitions and joint ventures remain a key strategy in the GCC industrial gases market; for example, over the last couple of years, companies such as the Linde group, Air Liquide, Praxair Inc. and Air Products & Chemicals Inc. have significantly increased their footprint in the GCC industrial gases market by entering into JVs with regional market players.