The industry is highly exposed to the new carbon tax, but revenue is still growing
Melbourne, Australia (PRWEB) December 14, 2012
The Carbon Dioxide Production industry has remained stable over the past five years. Low revenue volatility has been derived from its reliance on resilient downstream demand markets. The industry provides carbon dioxide to food and beverage manufacturers primarily due to its application as a food additive. Low discretionary incomes resulted in purchases of inexpensive luxuries by consumers. The industry also faced supply shortages in 2011-12 due to two major plants temporarily closing down, with soft drink manufacturers finding it difficult to source carbon dioxide in some areas. As a result, the industry grew by a compound annual rate of 1.7% over the five years through 2012-13. According to IBISWorld industry analyst Aries Nuguid, “the effectiveness of the introduction of the new carbon tax is expected to be limited in 2012-13, with industry revenue expected to continue to grow by 1.6% to be worth $425.9 million as subsidies prevent declines”.
The Carbon Dioxide Production industry has a medium level of market share concentration. The industry’s major players are Air Liquide Australia Limited, BOC Limited, Orica Limited and Origin Energy Limited. Nuguid adds, “conditions have not been strong enough to attract new competitors, particularly as business confidence struggled and as global conditions remained uncertain”. Uncertainty over the effect and implementation of the carbon tax also resulted in entrants being cautious while barriers to entry remained high.
The outlook is improving for the Carbon Dioxide Production industry despite the introduction of the emission trading scheme by the Federal Government. In the years through 2014-15, subsidies are expected that will allow a transition so that jobs are not lost and Australian competitiveness is not excessively harmed. New technologies and initiatives are expected to be embraced by the industry as ways to increase profit margins and environmental efficiency. Downstream markets are also expected to improve as overall conditions improve.
For more information, visit IBISWorld’s Carbon Dioxide Production report in Australia industry page.
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IBISWorld industry Report Key Topics
Companies in this industry manufacture carbon dioxide in compressed, liquid and solid forms. Firms then supply the carbon dioxide to a diverse range of customers, including industrial, medical and specialised users.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
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