The industrial gases business in the CEE region has grown at between 7-10 percent per year and is forecasted to grow at a similar rate over the next five years. The total industrial gases business in Eastern Europe was valued at approximately €1.85bn (including Russia and CIS) in 2005. Central and South Eastern European (CSEE) countries are driving the current growth in particular, along with a manufacturing migration from Western Europe to the lower cost base of the region.
Bulgaria and Romania comprise the second part of the EU’s fifth enlargement and joined the EU on January 1st, 2007. The next five or so years could be a unique window in Eastern European growth, before countries that have become European Member States join the Euro, which could lead to rising costs.
German based Linde Gas and the Messer Group are the biggest regional players, and really expanded their presence following the fall of the Berlin Wall. Linde’s acquisition of AGA, seven years ago, added to its presence in this region, and it now holds more than 35 per cent of the market and is the market leader in almost every country where it operates. Italian company SIAD, plays alongside Linde and Messer. Due to the significant investment and growth in the CEE region, a smaller player like SIAD has a wealth of new opportunities to capitalize on as well as retaining existing customers who have instigated a move eastwards from Western Europe over the last two to three years. $quot;Some of our Italian customers did not close their Italian facilities but rather enlarged or built new plants in (CEE) countries,$quot; according to the company’s managing director, Bernardo Sestini.
SIAD Group is an independently owned gas company, which was formed in 1927 and has headquarters in Bergamo, Italy. Over the past 17 years the company has expanded into Central Europe, including Austria, Czech Republic, Slovakia, Hungary, Croatia, Romania and Bulgaria. In addition the country operates in Slovenia, Croatia, Serbia and Bosnia through its joint venture with Istrabenz Plini.
Fastest growth
According to Sestini, Romania and Bulgaria are seeing the greatest growth amongst countries where SIAD operates: $quot;In Romania, this year we have a big contract with a steel mill, which gave us the possibility to install a big air separation unit,$quot; he says. As well as supplying the steel mill the new 300tpd plant, which is due on stream in September, will also supply liquid gases. Sestini predicts SIAD will become one of the biggest producers of bulk gases in Romania, where it also has 11 gas filling stations. Romanian gas revenues were worth around $110 million in 2005, while smaller Bulgaria, reaped $36 million in that period. Total revenues in both countries grew by over 30 percent year on year at the time.
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