Hanover Compressor on the Gas Services Surface Solutions Market (HC)

| About: Hanover Compressor (HC)
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Hanover Compressor Company (HC) CEO John Jackson describes the market for gas processing, compression, and dehydration [surface solutions] in a 4/10/06 interview with The Wall Street Transcript:

In North America, you find a very commoditized market. The burdens to entry actually are very low, so it's very easy to get in, both from a fabrication standpoint and a rental standpoint. As a result, we've seen some new entries into the rental market in the US in the last four or five years.

There currently are a few larger players in the US, and we typically compete head-to-head in almost every situation with these other companies. Success in this competitive landscape really comes down to service and deliverability ' your ability to provide ongoing service and delivery in the kind of market where you find yourself where equipment is in short supply. So if you have it and you can provide good service, you have a good chance of getting the job here.

In South America, Hanover and Universal Compression are really the two main players in rental compression. There are some local competitors in Mexico, Venezuela, Argentina and Brazil, but, by and large, those are the two that compete as far as rental product. In the rest of the world, our entry point really is in production and processing compression more than it is in equipment. So we compete with a NATCO or a Lindsey, which may provide gas treating or gas processing equipment to them and team up with such companies as a Universal or a Tormont out of Canada to provide the compression.

We, however, provide what we believe is a unique ability to bring everything to the table at once -- compression and gas processing -- and at the size of scale we deal in, we don't know of anyone else that brings all that to the table. The others do it on a collaborative basis. So we find competitive pressures around the world. Most of these companies are North American based that provide this product around the world.