South America Industrial Gases Market Outlook, 2029

The industrial gases market in South America plays a crucial role in supporting various industries across the region. These gases, including oxygen, nitrogen, argon, and others, are essential for a wide range of applications, from metal fabrication and welding in construction to food processing and inert atmospheres in chemical production. The market landscape in South America exhibits both similarities and unique characteristics compared to more established markets in developed regions. One defining feature of the South American industrial gases market is the presence of a well-established domestic production base.

Several major international gas companies, alongside prominent regional players, operate production facilities within the continent. This domestic production capacity offers several advantages. Firstly, it reduces reliance on imports, potentially leading to more stable pricing and shorter delivery times for industrial gas users. Secondly, local production fosters job creation and contributes to the overall economic development of the region. Furthermore, domestic gas producers can be more attuned to the specific needs and regulations of South American industries, allowing them to tailor their product offerings and distribution strategies accordingly.

However, the South American industrial gases market also faces a unique challenge in the form of uneven infrastructure development across the continent. While some countries boast well-developed transportation networks and industrial hubs concentrated around major cities, others struggle with limited infrastructure in remote areas. This unevenness presents logistical challenges for industrial gas companies in ensuring efficient and timely delivery of gases to all parts of the region. Companies need to adopt innovative solutions to address this challenge. This could involve establishing regional distribution centers, exploring alternative transportation methods like cryogenic tankers for remote locations, or partnering with local distributors with established logistical networks within specific countries.

According to the report, the South American Industrial Gases market is anticipated to add to more than USD 2.14 Billion by 2024-29. One of the defining features of the South American landscape is the presence of a significant number of state-owned or partially state-owned industrial gas companies. These companies, often established decades ago, have historically held a dominant position within the market. While some have undergone privatization or adopted more commercial practices in recent years, their presence continues to shape the competitive landscape.

Understanding the operational models and priorities of these state-owned entities is crucial for new entrants or international players seeking to establish a foothold in the South American market. This dominance of state-owned players is often accompanied by a focus on social responsibility and environmental sustainability within the industrial gases industry. Many South American governments prioritize initiatives that promote responsible resource management and minimize the environmental impact of industrial processes. As a result, industrial gas companies are increasingly focusing on developing and offering cleaner production technologies and eco-friendly gas production methods.

This emphasis on sustainability presents both challenges and opportunities for market participants. Companies that can demonstrate a commitment to environmental responsibility and offer solutions that minimize environmental footprint will be well-positioned to gain a competitive edge. For instance, some industrial gas companies in South America are exploring the potential of using renewable energy sources to power their production facilities. This shift towards renewables can help reduce reliance on fossil fuels and minimize greenhouse gas emissions associated with industrial gas production. Additionally, the adoption of closed-loop recycling systems for certain gases can further enhance the sustainability profile of the industry.

By implementing these practices, South American industrial gas companies can cater to the growing demand for environmentally conscious solutions while also aligning themselves with government sustainability initiatives. Furthermore, the rise of digitalization is transforming the South American industrial gases market. Companies are increasingly adopting digital tools for tasks like online gas ordering, real-time inventory management, and remote monitoring of gas delivery systems. These digital solutions can improve operational efficiency, enhance customer service, and optimize logistics within the market. Additionally, the use of data analytics can help companies identify consumption patterns and tailor their product offerings to better meet the specific needs of their customers.

Market Drivers

• Rise of Bioeconomy initiatives across South American countries: The Bioeconomy refers to the utilization of renewable biological resources to produce various products and fuels. This economic model is gaining traction in South America as a sustainable alternative to traditional fossil fuel-based industries. Industrial gases play a crucial role in the Bioeconomy, with applications in biofuel production, such as using hydrogen for processing biomass feedstocks, and in bioplastics manufacturing, where nitrogen is employed to create inert atmospheres during production processes. The growing emphasis on the Bioeconomy in South America creates a significant demand for industrial gases, particularly those catering to sustainable and environmentally friendly production processes.
• Rise of indigenous oil and gas exploration and production activities: Several South American countries, including Brazil, Argentina, and Venezuela, boast significant hydrocarbon reserves. The ongoing exploration and development of these resources necessitate a reliable supply of industrial gases for various applications throughout the oil and gas value chain. Industrial gases like oxygen are used for well stimulation and pipeline construction, while nitrogen plays a crucial role in pressure maintenance and inerting processes during oil and gas production. The anticipated growth in South America's oil and gas sector, fueled by both domestic demand and potential export opportunities, will act as a significant driver for the industrial gases market in the region.

Market Challenges

• Fragmented nature of the market: The region is characterized by the presence of a large number of small and medium-sized industrial gas companies, alongside a few established multinational players. This fragmentation can hinder economies of scale and limit investments in advanced production technologies. Collaboration between industry players, potential mergers and acquisitions, and a focus on regional integration can help overcome this fragmentation and enhance the overall competitiveness of the South American industrial gases market.
• Uneven infrastructure development: While some countries boast well-developed transportation networks and logistical infrastructure, others struggle with limited connectivity and geographical remoteness. This uneven infrastructure can pose difficulties in efficiently distributing industrial gases to all parts of the region, particularly in remote locations. Investing in infrastructure development, exploring alternative transportation methods like cryogenic tankers, and establishing regional distribution hubs are crucial for ensuring efficient and reliable gas delivery across South America.

Based on the report, the Industrial Gases market is segmented into Oxygen, Nitrogen, Hydrogen, Carbon Dioxide and Acetylene.

Oxygen and nitrogen represent the two most prominent segments within the South American industrial gases market. Oxygen is essential in various industrial processes, including steel production, metal fabrication, and welding. The ongoing growth of these sectors in countries like Brazil and Argentina fuels the demand for oxygen. Nitrogen plays a crucial role in inerting environments to prevent oxidation and ensure product quality. Its applications span food and beverage processing, pharmaceuticals manufacturing, and electronics production. The burgeoning food processing industry and growing emphasis on packaged goods in South America contribute to the rising demand for nitrogen.

Hydrogen finds application in various industrial processes, including oil refining, ammonia production, and hydrogenation in the food industry. While the overall demand for hydrogen in South America is currently lower compared to oxygen and nitrogen, the potential for growth exists. The increasing focus on clean energy sources like hydrogen fuel cells and the potential for hydrogen production from renewable resources in South America present future opportunities for this segment. Carbon Dioxide (CO2) has diverse applications in the South American industrial market. It is used in the food and beverage industry for carbonation of soft drinks and in brewing processes.

The rising demand for processed and packaged food items in the region translates to an increased need for CO2. Additionally, CO2 finds application in welding processes, particularly for laser cutting, and in the production of dry ice for various industrial applications. Acetylene, a traditional fuel gas used for welding and cutting applications, is experiencing a gradual decline in its market share within South America. This is due to the growing adoption of safer and more efficient alternatives like oxygen-fuel cutting and MIG welding processes. However, a niche market for acetylene persists in certain sectors like metalworking and repair applications.

Other industrial gases encompass a diverse range of products, including ammonia, methane, butane, and propane. Ammonia plays a vital role in the fertilizer industry, crucial for agricultural production in South America. Methane finds application as a fuel gas in some industrial processes and as a feedstock for the production of other chemicals. Butane and propane are primarily used as liquefied petroleum gas (LPG) for industrial heating applications, particularly in off-grid locations or as a backup fuel source.

According to the report, the Industrial Gases market is segmented into Manufacturing Industry, Chemical Industry, Metal & Mining Industry, Energy & Power Industry, Food & Beverage Industry and Healthcare Industry.

The Metal & Mining Industry stands out as the leading consumer of industrial gases in South America. This dominance is fueled by the region's abundant mineral resources, with countries like Brazil, Chile, and Peru boasting significant reserves of iron ore, copper, and precious metals. Industrial gases like oxygen, nitrogen, and argon play a critical role in various stages of metal processing, including metal extraction, smelting, welding, and refining. The ongoing expansion of the mining sector in South America, coupled with government initiatives promoting domestic mining and processing capabilities, is expected to further drive demand for industrial gases used in these processes.

Following closely behind is the Manufacturing Industry, encompassing a diverse range of sub-sectors within South America. The increasing focus on industrial diversification and import substitution policies in several countries necessitates a robust manufacturing base. Industrial gases like oxygen, acetylene, and inert gases like argon and helium find application in various manufacturing processes like welding, cutting, heat treatment, and inerting atmospheres for sensitive electronics production. The growth of the automotive, construction, and shipbuilding sectors in South America is a significant factor influencing the demand for industrial gases within the manufacturing industry segment.

The Energy & Power Industry represents another important segment within the South American industrial gases market. The growing demand for energy across the region translates to a need for industrial gases used in various power generation processes. Nitrogen is used for purging and inerting equipment in power plants, while oxygen enrichment can be employed to improve combustion efficiency in coal-fired power stations. Furthermore, the rise of renewable energy sources like solar and wind power in South America creates a demand for specialized industrial gases used in panel cleaning and equipment maintenance within these renewable energy facilities.

Other notable segments include the Chemical Industry, which utilizes industrial gases like oxygen, nitrogen, and hydrogen in various chemical reactions and production processes. The Food & Beverage Industry also relies on industrial gases like carbon dioxide for carbonation of beverages and nitrogen for modified atmosphere packaging to extend product shelf life. Finally, the Healthcare Industry utilizes medical-grade gases like oxygen for respiratory therapy and anesthesia, as well as specialty gases for medical imaging and sterilization processes.

Based on the report, the major countries covered include Brazil, Argentina, Colombia, and the rest of South America.

Brazil stands out as the undisputed leader within the South American industrial gases market, driven by a confluence of factors that create a strong demand environment. One of the most significant drivers is the presence of a well-established and diversified industrial base in Brazil. The country boasts major sectors like manufacturing, construction, oil & gas, and food processing, all of which rely heavily on industrial gases for various applications. For instance, the Brazilian automotive industry, a significant contributor to the manufacturing sector, utilizes industrial gases like oxygen for welding and cutting processes, as well as inert gases like argon and nitrogen for creating protective atmospheres during heat treatments.

Similarly, the construction sector utilizes oxygen for steel fabrication and nitrogen for inerting pipelines, while the oil & gas industry requires gases like helium for exploration activities and nitrogen for well completion and maintenance. This diverse range of industries creates a robust and multifaceted demand for various industrial gases within the Brazilian market. Beyond established industries, Brazil also presents exciting growth prospects in emerging sectors. The increasing focus on renewable energy sources like wind and solar power translates to a demand for industrial gases like argon and helium used in welding and inert atmospheres during the manufacturing of solar panels and wind turbine components.

Furthermore, the growing prominence of the food processing industry in Brazil necessitates a steady supply of food-grade gases like nitrogen for modified atmosphere packaging and carbon dioxide for carbonation of beverages. This sectoral diversification, coupled with ongoing industrial development, positions Brazil as a market with a high and ever-evolving demand for industrial gases. Another factor contributing to Brazil's leadership is the well-developed infrastructure within the industrial gases market. The country boasts a network of established industrial gas producers with significant production capacities. Major international players alongside domestic companies compete in the Brazilian market, ensuring a reliable supply of various industrial gases. Additionally, a well-established network of distributors ensures efficient delivery of gases to various industrial consumers across the country.

Years considered in this report:

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in the report:

• Industrial Gases market outlook with its value and forecast, along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Type:

• Oxygen
• Nitrogen
• Hydrogen
• Carbon Dioxide
• Acetylene
• Other Types (Ammonia, Methane, Butane, And Propane)

By End user Industry:

• Manufacturing Industry
• Chemical Industry
• Metal & Mining Industry
• Energy & Power Industry
• Food & Beverage Industry
• Healthcare Industry
• Others

By Mode of Distribution:

• On-Site pipe line
• By Bulk
• By Cylinder

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. After this, the research team made primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once the research team attained the primary data, they verified the details obtained from secondary sources.

Intended Audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Industrial Gases industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.