Medical gases yield healthy results
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With the global medical gases and equipment market estimated to be expanding at a CAGR (compound annual growth rate) of 8% from 2012 to 2018, gas suppliers can enjoy a promising outlook for continued growth.
A recent report published by Transparency Market Research (TMR) suggests that the market’s expected value will rise to $9bn in 2018, an increase of over 40% from $5.3bn in 2011.
The Asian medical gases and equipment market in particular is attracting considerable attention, thanks to its projected growth rate, which is expected to top all other regions. “It is likely to register an exceptional growth at a CAGR of 9.2% from 2012 to 2018,” according to TMR.
“The existence of a bigger population base, higher frequency of pulmonary diseases, and emergency medical conditions in nations such as China and India cater for an opportunity-rich market for medical gases and equipment.”
India ups medical capacity
Users at both ends of the economic scale fuel India’s demand for medical oxygen. According to the World Health Organisation (WHO), almost 90% of deaths caused by chronic obstructive pulmonary disease (COPD) currently occur in low- and middle-income economies such as India.
Factors such as smoking, indoor air pollution (from cooking fires), outdoor air pollution, occupational chemicals exposure and the frequency of childhood lung infections among this population contribute. Meanwhile, India’s government has stepped up its investment in healthcare with a programme to dramatically increase the number of hospital beds available in the country.
Despite this need for additional provision, India also boasts many highly specialised doctors, and treatment costs are relatively low, which serves to position India as a destination for medical tourism (over 350,000 patients travelled to India for treatment in 2012 alone). Hence the boom in consumption: according to a report by market researchers at TechSciResearch, the medical gases market size in India, in volume terms, is forecast to witness a two-fold increase by 2019, with a CAGR of around 15% during 2014-19.
Within India, INOX Air Products Ltd. is set to maintain its leadership position in the medical gases market through 2019. The medical gases market in India is highly dominated by region-specific players, which offer strong competition to multinational companies. Currently, the northern region, followed by the southern region, is the leading demand generator for medical gases, particularly medical oxygen. A large labour base and development of the economy are other contributors to India’s impressive gas use growth.
China promise
China’s massive population and economic growth have served to attract medical gases and equipment producers such as Taiyo Nippon Sanso Shenwei Medical Gas Co. Ltd., to invest and explore the available development opportunities. The company believes that investing in China will help it to mitigate the risks of global recession.
Linde has identified a massive need for oxygen and respiratory therapies in the years to come in China, not least because of issues with pollution in its major cities, and a high proportion of the population smoking tobacco. Linde bought US homecare and respiratory services company Lincare in 2012 and, according to an interview in The Financial Times, Linde CEO Dr. Wolfgang Büchele wants Lincare to enter China – but first the company requires a licence to provide healthcare services in Chinese homes. He revealed that the company is in discussions about this with the Chinese Government.
In Eastern Europe, the Russian economy is also growing, which has attracted foreign investments in the medical gas sector. In 2012, Air Liquide acquired St Petersburg-based Lentechgas, a leader in North West Russia with significant market share in bulk and packaged gases and a strong position in healthcare. Lentechgas had about 200 employees and sales of more than $10m at the time. Russia’s North West region is the second-largest in the country in terms of industrial production, and accounts for around 10% of Russia’s total population; the market for medical gases is both significant and growing.
In addition to a cylinder activity in Saint Petersburg and the acquisition of the local leader, Air Liquide also invested around €40m in a new state-of-the-art air separation unit (ASU) with a production capacity of 200 tonnes per day of liquid oxygen and nitrogen.
Positive US legislation
Looking for a moment at mature economies, the global medical gases and equipment market has other imperatives.
The implementation of the favourable US Food and Drugs Administration (FDA) Safety and Innovation Act (July 2012) is a driver for the global market, according to industry watchers. It gives the FDA authority to collect user fees from the medical industry to allow fund reviews of generic drugs, innovator drugs, biosimilar biologics, and medical devices. Recent fiscal developments, coupled with such government schemes, are boosting the medical and healthcare infrastructure and have resulted in a rise in disposable incomes and consumer awareness.
In Colorado, US, Air Products is celebrating the opening of its new Doe Canyon helium facility – the only plant that can extract helium from a gas stream composed mainly of carbon dioxide. In medical terms, helium is necessary for magnetic resonance imaging (MRI), breathing atmospheres for deep diving, and unique blood gas medical mixtures. With helium generally in short supply, markets will welcome the additional 230 million standard cubic feet (about 6.5 million m3) of helium annually due for production at the plant. Purified helium will be liquefied on-site for delivery to customers.
Well-equipped
According to market research firm Grandview Research, the medical gas equipment market currently has huge potential for further growth. As with the demand for the gases themselves, this is largely due to meeting the needs of an older population, and better treatments for chronic breathing issues.
Globally, the medical gas equipment market is expected to grow at a CAGR of 8.0% over the next six years to reach $5.3bn in 2020.
North America still takes the lion’s share of the worldwide medical gas equipment market, some 40-45%. “Increasing demand for permanent medical services in the coming years is expected to remain the biggest propeller of the North American market,” Grandview’s research states. Europe takes the next slice of the action, it reports, with a share of around 33% of the global total.
In terms of equipment, rising economies are becoming more attractive along similar lines to gases, too. The Asia-Pacific region is a highly capable medical gas equipment market. Rising nations, like China and India, have high CAGR figures and are anticipated to witness imperative market development. But we can expect the US to continue as leader in terms of market share through 2018.
A shift in the use of technologically developed and enhanced products has led to market growth and development, with the exception of some hindrance due to helium shortages. This is a market fragmented in every sense – by geography, products, and applications. With rising health expectations and an ageing demographic, the markets for both gases and equipment to meet medical needs can enjoy the prospect of further expansion in the years ahead.
A recent report published by Transparency Market Research (TMR) suggests that the market’s expected value will rise to $9bn in 2018, an increase of over 40% from $5.3bn in 2011.
The Asian medical gases and equipment market in particular is attracting considerable attention, thanks to its projected growth rate, which is expected to top all other regions. “It is likely to register an exceptional growth at a CAGR of 9.2% from 2012 to 2018,” according to TMR.
“The existence of a bigger population base, higher frequency of pulmonary diseases, and emergency medical conditions in nations such as China and India cater for an opportunity-rich market for medical gases and equipment.”
India ups medical capacity
Users at both ends of the economic scale fuel India’s demand for medical oxygen. According to the World Health Organisation (WHO), almost 90% of deaths caused by chronic obstructive pulmonary disease (COPD) currently occur in low- and middle-income economies such as India.
Factors such as smoking, indoor air pollution (from cooking fires), outdoor air pollution, occupational chemicals exposure and the frequency of childhood lung infections among this population contribute. Meanwhile, India’s government has stepped up its investment in healthcare with a programme to dramatically increase the number of hospital beds available in the country.
Despite this need for additional provision, India also boasts many highly specialised doctors, and treatment costs are relatively low, which serves to position India as a destination for medical tourism (over 350,000 patients travelled to India for treatment in 2012 alone). Hence the boom in consumption: according to a report by market researchers at TechSciResearch, the medical gases market size in India, in volume terms, is forecast to witness a two-fold increase by 2019, with a CAGR of around 15% during 2014-19.
Within India, INOX Air Products Ltd. is set to maintain its leadership position in the medical gases market through 2019. The medical gases market in India is highly dominated by region-specific players, which offer strong competition to multinational companies. Currently, the northern region, followed by the southern region, is the leading demand generator for medical gases, particularly medical oxygen. A large labour base and development of the economy are other contributors to India’s impressive gas use growth.
China promise
China’s massive population and economic growth have served to attract medical gases and equipment producers such as Taiyo Nippon Sanso Shenwei Medical Gas Co. Ltd., to invest and explore the available development opportunities. The company believes that investing in China will help it to mitigate the risks of global recession.
Linde has identified a massive need for oxygen and respiratory therapies in the years to come in China, not least because of issues with pollution in its major cities, and a high proportion of the population smoking tobacco. Linde bought US homecare and respiratory services company Lincare in 2012 and, according to an interview in The Financial Times, Linde CEO Dr. Wolfgang Büchele wants Lincare to enter China – but first the company requires a licence to provide healthcare services in Chinese homes. He revealed that the company is in discussions about this with the Chinese Government.
In Eastern Europe, the Russian economy is also growing, which has attracted foreign investments in the medical gas sector. In 2012, Air Liquide acquired St Petersburg-based Lentechgas, a leader in North West Russia with significant market share in bulk and packaged gases and a strong position in healthcare. Lentechgas had about 200 employees and sales of more than $10m at the time. Russia’s North West region is the second-largest in the country in terms of industrial production, and accounts for around 10% of Russia’s total population; the market for medical gases is both significant and growing.
In addition to a cylinder activity in Saint Petersburg and the acquisition of the local leader, Air Liquide also invested around €40m in a new state-of-the-art air separation unit (ASU) with a production capacity of 200 tonnes per day of liquid oxygen and nitrogen.
Positive US legislation
Looking for a moment at mature economies, the global medical gases and equipment market has other imperatives.
The implementation of the favourable US Food and Drugs Administration (FDA) Safety and Innovation Act (July 2012) is a driver for the global market, according to industry watchers. It gives the FDA authority to collect user fees from the medical industry to allow fund reviews of generic drugs, innovator drugs, biosimilar biologics, and medical devices. Recent fiscal developments, coupled with such government schemes, are boosting the medical and healthcare infrastructure and have resulted in a rise in disposable incomes and consumer awareness.
In Colorado, US, Air Products is celebrating the opening of its new Doe Canyon helium facility – the only plant that can extract helium from a gas stream composed mainly of carbon dioxide. In medical terms, helium is necessary for magnetic resonance imaging (MRI), breathing atmospheres for deep diving, and unique blood gas medical mixtures. With helium generally in short supply, markets will welcome the additional 230 million standard cubic feet (about 6.5 million m3) of helium annually due for production at the plant. Purified helium will be liquefied on-site for delivery to customers.
Well-equipped
According to market research firm Grandview Research, the medical gas equipment market currently has huge potential for further growth. As with the demand for the gases themselves, this is largely due to meeting the needs of an older population, and better treatments for chronic breathing issues.
Globally, the medical gas equipment market is expected to grow at a CAGR of 8.0% over the next six years to reach $5.3bn in 2020.
North America still takes the lion’s share of the worldwide medical gas equipment market, some 40-45%. “Increasing demand for permanent medical services in the coming years is expected to remain the biggest propeller of the North American market,” Grandview’s research states. Europe takes the next slice of the action, it reports, with a share of around 33% of the global total.
In terms of equipment, rising economies are becoming more attractive along similar lines to gases, too. The Asia-Pacific region is a highly capable medical gas equipment market. Rising nations, like China and India, have high CAGR figures and are anticipated to witness imperative market development. But we can expect the US to continue as leader in terms of market share through 2018.
A shift in the use of technologically developed and enhanced products has led to market growth and development, with the exception of some hindrance due to helium shortages. This is a market fragmented in every sense – by geography, products, and applications. With rising health expectations and an ageing demographic, the markets for both gases and equipment to meet medical needs can enjoy the prospect of further expansion in the years ahead.