General Manager – Argentina & Brazil,
"We continue to build leading technologies for gasification, carbon capture and hydrogen for mobility to power the broader energy transition."
Can you provide an overview of Air Products’ presence in Latin America and the company’s main activities in the region?
Air Products is present in seven countries in Latin America – Mexico (where we have a joint venture called Cryoinfra), Colombia (operating as Cryogas), Ecuador, Peru, Chile, Argentina and Brazil. In 2014, Air Products bought the majority stake in Chile-based Indura to expand our position in the region. In terms of market share, we are the second largest industrial gas company in South America. We are focused on providing essential industrial gases, gas related equipment and applications expertise to customers in dozens of industries, including refining, chemicals, metals, electronics, manufacturing, healthcare, agriculture, food and beverage. Globally, Air Products is the leading supplier of liquefied natural gas process technology and equipment, and we develop, engineer, build, own and operate some of the world's largest industrial gas projects.
How has the demand for medical gases in Brazil and Argentina been impacted by the pandemic?
During the first wave of the pandemic in June 2020, Brazil saw a 25% increase in demand for medical oxygen, and these levels remained for the rest of the year. During the second wave, from March to July 2021, the demand from hospitals increased by an average of approximately 100% compared to February 2020. There were even some hospitals that experienced an increase of demand between 500% and 1,300%.
Argentina experienced its first heavy wave in September 2020, also experiencing a 25% increase in demand. However, during its second wave, which started in April 2021, demand increased by an average of approximately 170% compared to February 2020. The overall oxygen capacity in Argentina, including industrial and medical oxygen, is approximately 850 tons per day (t/d). The pandemic caused this to increase to 1,300 t/d. The Argentinian government thus issued a temporary regulation to restrict the supply of gases for industrial demand, so medical gas demand could be supplied. This impacted the industrial supply chain, which mainly utilizes oxygen for combustion activities to increase the efficiency of burning.
To what extent has industrial demand for gases picked up in 2021?
To foster faster economic recovery both the Argentinian and Brazilian governments enacted a series of incentives to the housing and construction industries, such as low tax loans. Subsequently, we have seen an increase of over 200% in the demand from this industry year on year. With greater emphasis on sustainability, the building and construction industry is also moving towards more liquid nitrogen being applied to expedite the process of bonding different chemical molecules in concrete. There has also been a demand increase of approximately 70% year on year for fabricated metal products and repairs, and a 45% increase in oxygen demand for water treatment.
Which of the industries Air Products supplies to do you see as having high potential in the coming years?
We expect to see a 4% annual growth in the construction industry in the coming years, mainly driven by low interest rates. We also expect to see recovery in the food and beverage industry as mobility restrictions are eased and people are allowed to socialize. I believe that the entire health segment will continue to go from strength to strength, as populations will insist that their governments improve medical facilities and infrastructure. I also expect that the oil and gas extraction market will see significant growth in the coming years in both Brazil and Argentina, especially with regard to CO2 capture and sequestration.
Renewable energy is another key growth area. For example, Brazil has great potential for green hydrogen generation, a market which is receiving a lot of attention. Brazil already has a very large base of renewables, with approximately 64% of the country’s green energy coming from hydroelectric power plants. The ethanol industry and the pulp industry are also working on projects that use biomass to generate power.
How does the company’s approach to innovation help customers reduce their environmental impact?
The company’s focus is to conserve resources and reduce environmental footprints through cost-effective improvements. We have implemented a “Third by ‘30” goal to reduce our carbon emissions by one-third by 2030 from a 2015 baseline, and this initiative has already avoided 1.3 million metric tons of CO2. We continue to build leading technologies for gasification, carbon capture and hydrogen for mobility to power the broader energy transition.