Air Water, one of the three major industrial gas manufacturers in Japan, is intensifying its efforts in overseas industrial gas operations. By the fiscal year 2030 in the United States, they will establish a minimum of seven air separation units (ASUs) for on-site production of gases such as oxygen and nitrogen. They will utilize M&A to partner with local industrial gas distributors in order to ensure stable gas supply. Additionally, they will strengthen ASU deployment for the rapidly growing steel market in India. Their goal is to increase the combined sales revenue of the U.S. and Indian industrial gas operations to approximately $11.538 billion, around four times higher than the figure in the fiscal year ending in March 2023.
In the U.S., the industrial gas business is conducted through two patterns: gas supply via ASUs established through joint investments with distributors and direct gas supply within customer plants. Following the acquisition of a distributor in New York State in May 2022, they are planning to pursue similar M&A deals for approximately two more cases within the fiscal year 2023. The coordination with distributors will be expanded in various regions such as the East Coast, West Coast, Great Lakes area, and the Gulf Coast.
In the U.S., major industrial gas players like Linde and Air Liquide hold over 80% of the market share. Air Water entered the U.S. market in 2018 with its industrial gas-related equipment business and had been awaiting opportunities for its core industrial gas operations. As for the ASU method of locally producing industrial gases, they have already implemented it in over 20 regions within Japan. After assessing the feasibility of replicating this model with the support of distributors in the U.S., they have made the decision to proceed with the expansion.
The company identifies both the U.S. and India as promising growth markets. They plan to invest a total of $5.385 billion in facility investments, M&A, and other expenditures in these two countries over a three-year period from 2022 to 2024. It is expected that slightly less than half of the projected overseas sales revenue of $24.615 billion by the fiscal year 2030 will come from the industrial gas operations in the U.S. and India.