GCC Industrial Gases Market to Reach USD 3.9 Billion by 2031, Growing at a 7.8% CAGR | Persistence Market Research

The GCC industrial gases market is poised for continued growth, with a valuation exceeding US$2 billion in 2021 and expected to reach US$2.3 billion by 2024. Between 2024 and 2031, the market is predicted to grow at a compound annual growth rate (CAGR) of 7.8%, which indicates a robust and steady expansion. The demand for industrial gases in the GCC countries, including Saudi Arabia, UAE, Kuwait, Qatar, Bahrain, and Oman, is driven by their increasing reliance on industrial gases across diverse sectors such as chemicals, oil & gas, healthcare, and food processing.

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Key growth drivers behind this market expansion include technological advancements in cryogenic separation methods, an increasing emphasis on medical gases, and the rise of energy demand across various industries. The growth is also supported by the shift towards sustainable and eco-friendly gas production techniques. The demand for industrial gases is not only limited to traditional industries such as oil and gas, but it is also expanding in non-traditional sectors like healthcare and food & beverage processing, which are crucial drivers for the market.

Leading Segment and Geographical Region

The leading segment in the GCC industrial gases market is the medical gases segment, which is driven by the region's growing healthcare infrastructure and an increasing focus on advanced medical treatments. The medical gases, especially oxygen, nitrogen, and carbon dioxide, are extensively used in various healthcare applications, including oxygen therapy, medical imaging, and diagnostics. The rising awareness of healthcare standards and the development of medical technologies are key factors supporting the demand for medical-grade gases.

Geographically, Saudi Arabia holds the largest share of the industrial gases market in the GCC region, accounting for over 50% of the market in 2023. Saudi Arabia's dominant position is largely attributed to its vast industrial base, including oil & gas, chemicals, and power generation sectors, which are major consumers of industrial gases. Additionally, the country's economic diversification plans, which include increased investments in healthcare, manufacturing, and other sectors, will continue to fuel the demand for industrial gases in the coming years.

Key Highlights from the Report

• The market surpassed a valuation of US$2 billion in 2021 and is expected to reach US$2.3 billion by 2024.
• A projected CAGR of 7.8% from 2024 to 2031 indicates strong market growth.
• Transportation of industrial gases plays a significant role in determining their pricing, leading manufacturers to opt for local consumer sites.
• The construction, power, oil, and water industries contribute approximately 50% of new contracts for industrial gases in GCC countries.
• Saudi Arabia is the dominant player in the market, holding more than 50% of the market share in 2023.
• Industrial gases saw a dip in Saudi Arabia during the COVID-19 pandemic but have since recovered, showing a 6.0% Y-o-Y growth.

Market Segmentation

The GCC industrial gases market can be segmented based on product types, end-users, and distribution channels. The product types primarily include oxygen, nitrogen, carbon dioxide, argon, and other specialty gases. Among these, oxygen and nitrogen are the most widely used industrial gases, owing to their crucial roles in healthcare, manufacturing, and food & beverage industries. Nitrogen is particularly valuable in the food industry, where it is used in packaging to preserve food products.

End-user industries for industrial gases include sectors such as chemicals, oil & gas, power generation, healthcare, and food & beverage processing. The chemicals sector is a significant consumer of industrial gases, particularly for manufacturing processes. Healthcare is also a key end-user, with increasing demand for medical-grade gases like oxygen for treatments and therapies. The food industry relies heavily on gases like nitrogen and carbon dioxide for food preservation and packaging.

Regional Insights

In terms of regional trends, Saudi Arabia is the largest market in the GCC region, contributing the most significant share of the industrial gases demand. The country's industrial growth, driven by oil & gas, power, and petrochemicals, remains a dominant force in the sector. Additionally, the government's Vision 2030 plan aims to diversify the economy, further driving industrial demand, including the need for industrial gases.

The UAE is another key player in the market, with Dubai and Abu Dhabi serving as major industrial hubs. The UAE's emphasis on diversifying its economy through sectors like construction, manufacturing, and renewable energy is fueling the demand for industrial gases. The country's growing healthcare infrastructure and food processing industry are expected to further contribute to the rise in gas consumption in the coming years.

Market Drivers

The GCC industrial gases market is experiencing rapid growth due to several key drivers. First, the increasing industrialization across the region, especially in sectors like chemicals, oil & gas, and power generation, creates a high demand for industrial gases. These sectors use gases for various applications, including refining, metal production, and power generation. As these industries expand, so too does the need for a reliable supply of industrial gases.

Another key driver is the rising demand for medical gases, particularly in the GCC countries with rapidly expanding healthcare infrastructure. With an increased focus on improving healthcare services and medical technologies, the demand for medical-grade gases such as oxygen and carbon dioxide is expected to remain strong. Additionally, technological advancements in the production of industrial gases, such as cryogenic separation techniques, have made gas production more efficient, leading to lower costs and increased adoption.

Market Restraints

While the market shows promising growth prospects, there are certain restraints that could hinder the full realization of its potential. One of the major challenges is the high transportation costs associated with the distribution of industrial gases. The need to transport gases over long distances can drive up prices, impacting market profitability. To counteract this, manufacturers are increasingly setting up local production plants closer to key industrial hubs.

Another challenge facing the market is the volatility in raw material prices, particularly for natural gas, which is a key input for the production of industrial gases. Fluctuations in the cost of raw materials can lead to price instability in the final product, making it difficult for businesses to forecast expenses and maintain competitive pricing. Additionally, the complex regulatory environment in GCC countries may lead to operational difficulties for new entrants into the market.

Market Opportunities

Despite these challenges, the GCC industrial gases market offers several growth opportunities. One major opportunity is the increasing adoption of eco-friendly gas production methods. With a growing focus on sustainability, the demand for gases produced through environmentally friendly methods, such as using renewable energy sources for production, is rising. Companies that can offer eco-friendly alternatives are likely to gain a competitive advantage.

Another opportunity lies in the expanding food & beverage sector, where industrial gases play a vital role in food preservation and packaging. As the GCC countries continue to experience population growth and urbanization, the demand for processed and packaged food is expected to rise, further boosting the demand for industrial gases like nitrogen and carbon dioxide.

Reasons to Buy the Report

✔ Gain insights into the size and forecast of the GCC industrial gases market for the period 2024 to 2031.
✔ Understand the key drivers, restraints, and opportunities in the market.
✔ Analyze the competitive landscape with key players and market strategies.
✔ Discover trends in the medical gases segment and its future growth potential.
✔ Get detailed regional insights and identify the dominant markets within the GCC.

Company Insights

Key players operating in the GCC industrial gases market include:

• Linde Group
• Air Liquide
• Messer
• Emirates Industrial Gases

Recent Developments:

1. Air Liquide has expanded its operations in the GCC region with new production facilities to cater to the rising demand for industrial gases in sectors like healthcare and manufacturing.

2. Linde has announced a strategic partnership with leading oil & gas companies in Saudi Arabia, enhancing its supply of gases for petrochemical processing.

Conclusion

The GCC industrial gases market is on a promising growth trajectory, supported by the expanding industrial base, advancements in healthcare, and evolving energy needs across the region. Saudi Arabia and the UAE are likely to remain dominant players, while new opportunities continue to emerge in sectors like food processing and sustainable gas production. For businesses looking to enter or expand in the region, understanding the market dynamics and staying abreast of regulatory changes will be crucial for success.

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