Composite cylinder net high sales in Europe, remain niche in U.S.

Although they are popular in Europe and elsewhere around the globe, composite-constructed propane tanks have yet to catch on in the American cylinder marketplace.

Safety concerns and higher cost appears to be the key factor inhibiting widespread adaptation in the United States.

Wariness over the concept of composite technology is another drawback that’s stifling sales, according to a senior manufacturing executive who requests anonymity. “No one has the foresight to see outside the box,” the executive laments. “The industry has no insight or imagination to try something different. They don’t think beyond their nose.”

Bob Jones, Ragasco’s North America sales manager in Florida, cites the failure to get the necessary domestic fire code changes to allow composite cylinders to be used in cabinet heaters and other indoor uses. Several efforts to push the code changes through have failed in recent years and eventually lost the support of the National Propane Gas Association.

“Europe for years has seen the advantages of composites and understand the safety attributed to these cylinders, which permit their indoor use for cooking, water heating and other uses,” Jones says.

Ragasco claims that the composition of its fiberglass mesh product prevents a violent release of the fuel under pressure when exposed to continuous flames. When the exterior plastic casing melts, gas seeps through numerous fissures to produce a controlled burn that doesn’t explode.

The company notes that its cylinder displays the same fire-safe behavior – independent of any pressure-relieving device – whether the tank is vertical, horizontal or upside down.

“Ragasco has about 10 million cylinders in use worldwide and is very proud of its outstanding safety record,” Jones says. “Our seamless blow-molded, one-piece composites with load carrying filament wound fiberglass and resin have a tremendous capacity to withstand pressure, creating an explosion proof and much safer cylinder. We feel Ragasco composites present a much safer environment than many fuels presently allowed for indoor use in the U.S. today.”

An additional hindrance is the vast amount of steel tanks already in the major cylinder exchange pipeline. Switching over would be a hefty purchase order, and it appears that the big exchangers in the U.S. are eschewing the product at this point.

What composites do bring to the (picnic) table, though, is ease of transport and handling by end users eager to lug around less weight. Some models have a see-through capability to avoid running on empty or being short-filled by an unscrupulous propane provider.

Yet neither Worthington Industries nor Manchester Tank – the two largest domestic cylinder manufacturers – are producing composite propane cylinders.

Janna Stanford, marketing communications manager for Worthington, says price and value proposition are limiting the use of composite propane tanks.

Manchester’s Lesley Shorter notes that the company’s future plans regarding composites “are proprietary, and we cannot discuss future product or market opportunities without compromising those plans.”

Trendy tanks
The cylinder business model in the U.S. differs from what’s found in overseas nations. The domestic market ratio is evenly split between exchange and individual consumer ownership. In Europe and other countries, the great majority of cylinders are exchanged rather than purchased outright.

“The numbers for composite tanks in the U.S. are insignificant compared to Europe,” says Filipe Predrosa, North American sales director at Amtrol. The market share here is about 0.5 percent; the lighter-weight vessels account for 20 percent to 30 percent of the exchange cylinders in European circulation.

“Cost is the big issue,” why Americans purchase just 10,000 composite cylinders each year, according to Darrel Reifschneider, CEO at the Lite Cylinder Co. His company’s product ranges in price from $85 to $115.

Amtrol’s Predrosa predicts that eventually the American industry will embrace the concept of using tank design to spur exchanges and sales.

“The market will be so competitive that you’ll have to differentiate yourself from the competition,” he says. “Right now it’s price, price, price.”

His company’s CoMet (COM posite+METal) cylinder costs about twice as much as a steel unit. As the domestic marketplace gets more competitive, “you can differentiate on the cylinder because you can’t differentiate on the propane,” Predrosa says. “It’s a commodity product, and competition is growing in that [exchange] market.”

“The European LPG cylinder industry has been forced to change its 50-year-old image to a newer and more innovative one in order to maintain its market share and sales,” observes Tiago Oliveira, Amtrol’s international vice president of marketing and sales.

“Developments in such markets have encouraged people to start to view cylinders differently,” Oliveira says. “The current trends in Europe focus on the consumer with innovative designs and ergonomics, making the lighter cylinder more attractive to the end user. Cylinders are becoming trendy, leaving the typical heavy-duty image behind.”

Anchoring the market
The CoMet features a design that resists rolling around in the customer’s trunk or pickup bed along with boasting softer handholds. A non-corrosive quality “has really caught the attention of the marine industry” in the U.S., according to Predrosa. Nautical-flag graphics adorn the tank’s exterior, making it attractive to American boaters tying up for a dockside cookout.

“The biggest single market we have right now is the marine market – sailboats,” concurs Lite Cylinder’s Reifschneider. “Steel cylinders are really obsolete in that market,” he points out, citing the corrosion concerns of saltwater sailors. For whitewater rafters, the portability of the units makes them especially applicable for running rapids in the wild and capping off the day with a hot meal.

“Outdoor enthusiasts who are serious about their gear will find the Lite Cylinder to be an invaluable tool,” Reifschneider says. Because the propane level is always visible, “they’ll never again haul a clunky steel cylinder to the campground or duck blind only to find that it’s empty.” With 10-, 20- and 25-pound options (a 33-pound unit is available for forklifts) – plus comfortable handholds – it comes in a variety of color schemes, including a camouflage pattern.

Jones says Ragasco sees strong interest in its new composite forklift cylinders as early as first quarter 2012.

“We expect the new forklift cylinders to immediately be a successful product and offer a very competitive alternative for gas companies to promote,” he says. “We believe there will be positive growth for all four sizes of Ragasco composites, especially in the marine, recreational vehicle, forklift and material handling industries.”

Photos courtesy of Amtrol and Ragasco