An insight into the global market for gas analysis

Paul Boughton

With a background in chemistry and 17 years working with ICI in sales, marketing and business management, Dr Linda Bell has been Managing Director of Servomex Group Limited, a Spectris company, since 2001. Here she outlines the technical, economic and regulatory challenges facing the global gas analysis industry.

Our operations are divided up into three regions: Europe, Africa and the Middle East (EAME); the Americas; and Asia-Pacific. Turnover in these three is approximately 45 per cent, 35 per cent and 20 per cent, respectively. But even within each of these regions, there can be huge variations in the markets, typically due to legislative requirements relating to health and safety and environmental protection, plus local demand often varies in response to economic conditions.

Market requirements therefore vary considerably from one geographic region to the next, and it is a constant challenge to keep pace. On the up side, however, while the market in Western Europe is now mature and growing relatively slowly, as a global company, we are in a strong position to take advantage of the markets that are expanding more quickly – such as South America, Eastern Europe (Poland, Czech Republic and Russia, for instance), China, India and Japan - which had been flat, but is now starting to improve again.

As the EU undergoes enlargement, there is a great deal of work being done to bring compliance within the new member states up to the same standard as in the existing member states. Furthermore, Eastern European plants, generally speaking, do not operate as efficiently as their counterparts in the West, so plant operators are having to play ‘catch-up’ in order to remain competitive in an open market. Similarly, as the Russian market opens up, we are seeing operators striving to improve their performance.

Loan units on trial

With new customers and new applications where we believe our instruments could make a big impact, we will loan gas analysers so that plant operators can establish for themselves the benefits that can be achieved.

For example, a number of trials have been running in the power generation industry recently, many of which have taken the form of head-to-head comparisons with competitive systems. As a result, plant operators have proved to themselves – and the market – that our instruments are consistently more reliable and deliver a better performance.

In power stations, incinerators and similar applications, gas analysers are used in a dual role: partly to comply with continuous emission monitoring (CEM) requirements and partly to optimise the operating parameters.

Because of the efficiency gains that can be achieved, it is not unusual to see payback periods of a matter of months. So having had a trial unit on loan, the operators are coming back and placing orders for multiple units, as they are usually required for several locations throughout a plant. From the plant operator's perspective, the best possible investment is one where the up-front cost can be recouped in the same accounting period – which is exactly what they are achieving with these gas analysers.

Rapid payback is attractive where it can be achieved but, elsewhere, total cost of ownership is often a more pressing issue.

Customers who are major multinational companies certainly understand the true value of reliable instruments that can operate for relatively long periods without significant downtime. We have customers that have been with us for 30 or 40 years and have gained enough experience of our products to be more than aware of the long-term benefits.

Others are prepared to invest a little more in equipment that they are confident will not let them down; after all, if a less reliable instrument is installed in a process plant and its failure leads to an accident, the costs to the plant operator can be orders of magnitude greater than the purchase price of the instrument.

There is also another group of customers that tend to look at the total cost of ownership more than the initial purchase: those with centralised instrumentation specialists. These generally take a more global view (literally and metaphorically) than site specific instrumentation engineers who are more focused on keeping a plant operating on a day-to-day basis.

Looking to the future

Into the future, the main drivers continue to be safety, quality and efficiency. Inevitably customers are demanding improved performance, which is why there are analysers available today that are capable of measuring in the parts per billion (ppb) range.

Nonetheless, you are normally concerned with particularly toxic or dangerous gases to be interested in ppb levels, and generally the instruments capable of working at these levels today are laboratory units to which a sample must be taken, with the associated risk of contamination and concern for safety. This means that currently they cannot easily be used for online measurements as part of a real-time feedback loop for process optimisation.

In contrast, our customers frequently use their analysers to control critical processes and so improved performance in their eyes is improved reliability, ease of use or communications to facilitate integration with the rest of their plant. To this end we have already launched some exciting new products in 2005 and there are more in the pipeline for launch in 2006.

Although the company started out specialising in oxygen measurement using paramagnetic technology, which tends to be used to control inerting or oxidation processes, the range of additional technologies now available - such as zirconia, photometric and thick film – means that a wide range of gases can be measured in a phenomenally wide range of applications. Nonetheless, the company will remain a specialist, rather than a generalist supplier of gas analysis equipment.

The next exciting development will be with lasers. These can be used to look for specific infrared absorption lines, so they are particularly useful for gases such as hydrogen fluoride and hydrogen chloride that are difficult to detect with other technologies. But you have to bear in mind that lasers currently can only be used for monitoring, not accurate analysis. In other words, they can tell you if a specific gas is present and give an approximate level, but at ppm levels they cannot accurately tell you how much of it is there.

Gas analysis is a very exciting market to be in at the moment. As well as new technologies, there are huge opportunities available in an incredibly wide range of industry sectors. Indeed, one of the biggest challenges that we face as a company is where to focus our efforts. We will continue to serve our existing customers so that we can bring them value and benefits by leveraging our existing skills, but, at the same time, we employ rigorous processes to identify the future opportunities with the greatest potential.

Trade barriers

Other challenges facing the gas analysis industry are the same as elsewhere. For example, the WEEE Directive (Waste Electrical and Electronic Equipment, 2002/96/EC) recently came into force, and the RoHS Directive (Restriction of the use of certain Hazardous Substances, 2002/95/EC) will be implemented next year. As a company, we are fully prepared for these.

While some commentators have complained bitterly about the costs of compliance with such regulations, there is another side to this coin. Officially these directives are intended to protect the environment, but there is no denying that they also act as a barrier to entry from competitors elsewhere in the world. For instance, the Chinese market is growing rapidly and there are already Chinese manufacturers of gas analysers (though these are largely reliant on technology licensed from Western companies – something that Servomex has made a positive decision not to do as we do not believe it to be in our best long-term interests).

At some point in the future these companies will almost certainly start to export systems to Europe, but they first need to comply with Directives such as WEEE, RoHS and ATEX - which is neither simple nor low-cost.

The future

There is a continual substantial investment in R&D, involving new technologies as well as the miniaturisation of existing technologies. In addition, we are striving to build strong global teams and help our own people understand the dynamics of a business that is evolving to meet changing market needs.

Many of our customers are global players, so we have to ensure that our internal communications meet the needs of this type of customer. We are also responding to the market in every way possible, which has an impact on almost all aspects of the business, from initial enquiries through manufacturing to long-term support.

Our products are in use in over 70 countries around the world, with support provided from a network of local offices and distribution partners. Where appropriate we will open new offices, as we did in China earlier this year, in order to deliver the level of support required and demonstrate our commitment to particular geographical markets. Our goal is to be able to offer customers a better value proposition for the future, and we believe we are achieving this.

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