It’s no understatement to say that gases make the welding world go ’round. Welders use gases as a shield to protect the weld area from contamination and as a fuel for heating and cutting metal. For welding supply companies, access to key gases — oxygen, nitrogen, and argon — is critical.
Until recently, five Minnesota welding supply companies, like others in the industry, depended on huge international corporations to supply those gases. But about 10 years ago, that group, spearheaded by Brad Peterson, president of Mississippi Welders Supply Company (MWSCO), began developing an ambitious plan to build its own air separation unit — an industrial plant that can distill the air we breathe into the purified gases it distributes to its customers.
“Every small welding supply distributor dreams of coming up with the capital to build their own air separation plant,” says Peterson. “But the hurdles are just too high. The capital, the contracts, the legal work all create a barrier to entry.”
That barrier to entry falls if more companies can chip in, which is exactly why Peterson approached others in the industry. The founding companies — A-OX Welding Supply, Huber Supply Company, Minneapolis Oxygen, and Toll Company — joined Peterson’s MWSCO, giving the project the heft it needed to get off the ground.
Located in Faribault, Absolute Air opened in January 2023, the first jointly held independent gas production facility in the Midwest. The company produces oxygen, nitrogen, and argon for its five founding members. It can also produce enough excess nitrogen and oxygen to swap for gases its member companies need but are not distilled by Absolute Air. And, it has capacity to supply gases to others in the welding supply market, as well as to the growing number of industries that rely on purified gases, including health care, food packaging, and electronics manufacturing.
Getting started
Like Peterson, the other founding companies were motivated by a desire to have more control over their supply of gases. “With the majors, you’re going to get a price increase every year and it just keeps going up. You don’t really have any control or any sense of security,” he says, noting that the major suppliers could also give preference to larger buyers, leaving smaller companies without access to supply.
The solution — building their own joint plant — presented significant challenges, but familiarity with each other through industry interactions helped set the stage. “There was a level of trust and communication,” says Peterson.
Early in the process, Peterson tapped industry expert Ned Pontious as a consultant on the project. Pontious, who led a similar company in Idaho for 25 years, now serves as president of Absolute Air.
Peterson recruited Pontious to the Absolute Air project just days after Pontious retired as president of a company that had built air separation plants in Boise, Idaho and Moses Lake, Wash., that distribute gases within a seven-state area in the Pacific Northwest. Pontious oversaw every element of Absolute Air’s project from the acquisition of land to building the plant and beginning production.
Up and running
Early on, the company confronted every conceivable pandemic-era challenge. “We had work stoppages, equipment shortages, and supply chain interruption,” Pontious says.
A two-year project became a three-and-a-half-year slog, but in early January 2023 the facility started pumping out oxygen, nitrogen, and argon. “It’s been two and a half years now, and the plant is running great,” Pontious says.
The only raw material Absolute Air needs is air, and because the facility is highly automated, it has just four manufacturing employees. Its sophisticated air separation process requires an extraordinary amount of electricity, though. Peterson says the decision to locate in Faribault was based in part on how easy it was to work with the Steele-Waseca Electric Co-op. “Another key siting decision was an economic development authority that wanted to work with us,” says Peterson. “We found that in spades with the City of Faribault.”
With the founding companies fully supplied with oxygen and nitrogen (the facility doesn’t produce enough argon to fill its members’ needs), Absolute Air is now working to expand its market reach. “When you build a plant this big you don’t build to be 100% loaded the first day. You project growth, and we’re pretty much on our growth line. I wish we were above it,” Peterson says.
Industry trends are in Absolute Air’s favor for reaching that full load. “Gases are in great demand. If you look at all the projections for gas use in the next 20 years, it’s around a 12% annualized growth rate. If the economy’s growing by 3%, we’re in a good position,” Pontious says.
Return to the Winter 2025 issue of Enterprise Minnesota® magazine.
