New kid on the block

Tuesday, October 27, 2009

COLUMBUS, Ohio – Worthington Cylinders doesn’t see a ton of growth in the aluminum oxygen cylinders market for the HME industry, but there’s enough to make mining it worthwhile, said Dusty McClintock, vice president of sales.

“The healthcare market is growing at 8% to 12% (annually), according to our studies,” he said. “We don’t think cylinders will grow at that rate. We think it will be flat at 2% growth, but still growing, and it’s still an attractive market being in the medical healthcare industry.”

The manufacturer of industrial gas cylinders and related products entered the HME market last summer, when it acquired Piper Metal Forming Corporation, U.S. Respiratory and Pacific Cylinders. As part of the deal, Worthington “inherited a great position in home care,” with a built-in customer base that includes Rotech, Invacare, Pacific Pulmonary and Apria.

Portable oxygen concentrators and other non-delivery technology pose the greatest threat to growth in the oxygen cylinders market, McClintock said.

“If they can get their costs down, they will be a force to we reckoned with,” he said. “Time will tell how long (portable oxygen) cylinders will last and if they will continue to thrive.”

That said, every HME business is different and many companies today continue to focus on cylinders, he added.

The big four manufacturers of aluminum cylinders include Worthington, Luxfer, Hy-Mark and Catalina. Being the new kind on the block for HME, Worthington plans to grow its market share by stressing product performance, safety, on-time delivery and competitive pricing, McClintock said.

“We are the largest of the four, and we have a very good reputation,” he said. “It’s our core competency, and that brings a lot of value.”