Hexagon Annual Report 2019

38 2019 AT A GLANCE FROM THE BOARD ROOM FINANCIAL STATEMENTS Hexagon Ragasco The company received smaller repeat orders from other existing customers in the region during 2019. Middle East and Africa The region invests in lightweight composite cylinders, making domestic use of LPG more user-friendly and safer. The composite cylinders were introduced to Gambia, Jordan and Oman in 2019. The company has received several repeat orders from Middle East and Africa during the year. North America During 2019, Hexagon Ragasco focused on selected segments of the North American market, specifically businesses specializing in cylinder exchange for propane BBQs. The number of point of sales carrying the company’s cylinders in California and Florida continued to increase during the year. Latin America The region invests in lightweight composite cylinders, making domestic use of LPG more user-friendly and safer. The company has received both repeat and introductory orders from customers in the region during the year. The composite cylinders were introduced to Guyana in 2019. COMPETITIVE POSITION Currently, Type 1 steel cylinders dominate markets outside of Europe due to price. Although they are cheaper, steel products are heavier and susceptible to corrosion. This affects the safety and useful life of the steel cylinders. Hexagon’s composite LPG cylinders are resistant to BLEVE (Boiling Liquid Expanding Vapor Explosion) when engulfed in fire. Hexagon Ragasco’s lightweight cylinders are less costly to transport, and the translucency and superior design make the composite LPG cylinders easier to moni- tor and use. The company’s cylinders can withstand a burst pressure that is twice as high as their steel counterparts. The superior user-friendliness and safety features are key competitive advantages. Our composite cylinders have a life time expectancy of at least twenty year. In 2019, Hexagon Ragasco solidified its position as the leading global supplier of composite LPG cylinders. The company's position was strengthened relative to both steel and other composite cylinder alternatives. There are other composite cylinder alternatives in most markets and the company expects that competition will gradually increase over time. OUTLOOK The outlook for composite LPG cylinders remains solid. In established markets, Hexagon Ragasco is acquiring market share from steel cylinders. The business expects to see some deviation in investment spend from some of its European customers in the short-term. Meanwhile the company is growing its position in other region, which is expected to generate recurring revenues and help balance the temporary slowdown from Europe. Hexagon Ragasco has several product innovation initiatives related to digital technologies ongoing, which will further enhance and differentiate the product offering. In addition, the company is perusing opportunities within other types of applications and gases.