ARC Gas Products

Bay-Area distributor gains control of specialty gas market.

Daniel Guerra has taken plenty of calculated risks throughout his career. In 1983, he purchased a small branch of Wesco Welding Supply Company (today known as Wesco Gases) in San Jose, California, and founded ARC Gas Products Inc., a distributorship for industrial, medical and specialty gases and related products. In the mid-1990s, he foresaw golden opportunities in providing specialty gases to the semiconductor industry. ARC Gas Products started making a tremendous push toward this venture by moving to a new facility, investing in a full-service, on-site laboratory with state-of-the-art equipment, and hiring more employees. This past year, ARC Gas Products made another major investment when it purchased a microbulk delivery system. In the future, President Guerra plans to open a satellite location.


President: Daniel Guerra
Year Founded:
Year Joined GAWDA:
San Jose, California
2004 Sales
: $4,000,000
Web Site:

Through an articulate planning process, Guerra has been successful in achieving his goals and reinventing his company. What has remained the same is ARC Gas Products’ overall mission: To provide customers with the highest quality products and superior service in the least amount of time. This philosophy has enabled the company to establish itself as a leader in the high-purity and lab gas market throughout the San Francisco Bay Area. “We’re proud of what we’ve established in our little niche of the world,” Guerra says. “We’ve done a good job in identifying our market and producing and delivering the items that are being asked for.”

On the Cutting Edge
Nestled among a myriad of industries in the Silicon Valley, ARC Gas Products got its start as a welding supply store. Ten years ago, Guerra felt the area was too diverse for the company to focus on serving only the welding industry. He noticed a growing market in ultra-high purity gases and was intrigued by the possibilities of growth. If ARC Gas Products was going to pursue this business, a decision needed to be made and the company had to gain control of the market. Guerra created a strategic plan to penetrate the market and established four major areas of concentration: investments, staffing, quality and products. On his part, it meant making financial and leadership commitments to both his company and employees.

The first thing the company needed was room to grow. In 1995, ARC Gas Products moved to a 12,000 square-foot building, nearly five times the size of its original facility. A filling plant, pumping facility and, six years ago, full-service gas analytical laboratory were put in. The most advanced equipment and instrumentation available are utilized in the lab, where specialty gas specifications are guaranteed through detailed purity analysis. ARC Gas Products initially produced pure gases and then evolved into basic multi-gas mixes. Today, up to eight-component gas mixes are produced. ARC Gas Products has reversed its product offerings to represent 75 percent gases, three-quarters of which are specialty gases.


ARC Gas Products' headquarters in San Jose, California, occupies a 12,000 square-foot facility.

The initial investment for the lab and equipment was $125,000, a return on which was achieved in just two years. “A lot of distributors want to build a lab, but they don’t want to make the investment or they’re reluctant to do so,” Guerra explains. “But once you make that investment, you need to have the right people in place to make the equipment work. Otherwise you’d just have that equipment sitting idle. That is an essential key to any company that is considering going after this type of business.”

One of ARC Gas Products’ keys is Lab and Plant Production Manager Francisco Garcia, who joined the company five years ago. Garcia is a chemist who understands the structure of the industry and its components. “We are very fortunate to have him on board,” Guerra says, “as his expertise has given the company a quality that is necessary to compete.”

Although it would be challenging to produce the high quality of products required for the semiconductor industry, Guerra was confident in his employees’ abilities. What ARC Gas Products needed above all was an edge to separate itself from the competition. “One of the things we noticed as we started getting into spec gases was that customers wanted service. We were finding that when customers called their vendors, they couldn’t get in touch with anyone. There were increasing complaints about lead times, quality and service level,” says Vice President Rigo Gutierrez. “We know that one of our strengths is our ability to respond to our customers. So, we took the best from the industrial side of the business, which is service, and applied it to the gases side. Our exceptional customer service is our backbone.”

Another edge ARC Gas Products has is its microbulk delivery system. In mid-2001, the company reached a fork in the road either to fully invest in the lab or purchase a microbulk delivery system to embark on liquid gases. The company found that oftentimes liquid gas accounts would have a need for high-pressure pure gases, so it ultimately opted to bring the lab up to speed first. For ARC Gas Products to get the best bang for the buck, it made sense to finish the lab before embarking on a new project. The microbulk delivery system was put on the back burner, which turned out to be a wise decision as the September 11 tragedy shortly followed. It wasn’t until 2004 and after Bulk Products Manager Dan Varela joined ARC Gas Products that the decision was made to order the microbulk delivery system. Varela’s extensive background in industrial welding supplies and specialty gas sales, plus years of experience at Chart Industries, provided the in-depth knowledge that is necessary to serve customers and compete in the industry. Varela is another example of recruiting the right person for the job. “We see this microbulk delivery system as holding the way to our future,” Gutierrez says. “We want to stay with our philosophy of providing everything for the customer. Now we have the capability to provide customers with all of the gases they’re going to need at a single location.”


With its microbulk delivery system, ARC Gas Products can supply customers with the entire package.

It is this careful thinking and outstanding leadership at ARC Gas Products that have led to its success. “It’s interesting how we weigh things in the decisions that we make,” observes Guerra. “But I’m glad we carried out our plan in this order.”

Along with supplying the best quality products, one of ARC Gas Products’ goals is to supply those products with the best appearance. Employees take pride in the investment of capital assets—the cylinders—by keeping them neat and clean. “When we went into the spec gases, we chose to do the very same thing,” Guerra says. “Our gases and cylinders are presented very nicely in labs. Customers like it because our products sit next to million dollar pieces of equipment, and don’t detract from their appearance.”

Moving Up
As ARC Gas Products entered the sophisticated semiconductor industry, it became evident that the company needed to hire very knowledgeable people, such as Francisco Garcia, who were capable of using analytical equipment and were familiar with its processes. But there are other factors that go into hiring at ARC Gas Products. Guerra looks for dedicated people who are team players, have strong communication skills and are passionate. “We look for the person who has the possibility of going up the ladder,” says Guerra, “so we like to recruit from within. Rigo Gutierrez is a direct result of that.” When Gutierrez joined the company 14 years ago, he started out driving trucks. He then worked in the lab, and did sales and marketing before being promoted to vice president two years ago. “I did a little bit of everything, which helped me,” Gutierrez says. “It all ties back to getting employees to buy into the company and realize that every single person here makes a difference. That’s part of the concept we convey.”

6d_guerra & gutierrez

President Daniel Guerra (left) and Vice President Rigo Gutierrez work closely to ensure customers receive exceptional service.

Daniel Guerra himself can relate to this concept and moving up the ladder. While attending school in Texas, he worked in shipping and receiving for Big Three Industries (today Air Liquide) in San Antonio. He learned hands-on skills like how to repair regulators and how to weld. Upon moving to California, he joined Wesco Welding Supply Company, working his way up from driver to salesman to sales manager to vice president and eventually president until he bought a Wesco branch store and founded ARC Gas Products.

Guerra credits ARC Gas Products’ success to each and every employee, who work together as a team, rather than in departments. “People are what make this company go.” When each of ARC Gas Products’ 25 employees is hired, they spend two to four weeks on the dock learning about the products, process of selling, and safety issues. Employees are then assessed on their knowledge and performance to determine what type of training is necessary. “Part of the reason they go to the plant for the first month is so they’re not out there making promises the plant can’t deliver. Every employee has an effect on every sale, and those effects determine whether we have repeat or one-time customers,” says Gutierrez.

Keep in mind, Gutierrez points out, that a sale at ARC Gas Products involves more than just selling a nitrogen cylinder or regulator. “We sell the entire package—expertise, presentation and service. All of these things go hand-in-hand.”


Lab and Plant Production Manager Francisco Garcia monitors the purity levels of gases manufactured in the laboratory.

The Extra Mile
A couple of years ago, a Research and Development customer was having an issue with the forming gas it received from ARC Gas Products. Corrosion was showing up on tests the customer was performing, causing them to fail. ARC Gas Products brought the gas back to its lab to test it, but everything checked out fine. Some companies would have stopped the service there. “We could have, too,” Gutierrez says, “but we wanted to help our customer find the problem.”

Gutierrez approached chemist Garcia with the situation. Three different gases, each with varying levels of oxygen and moisture, were produced in the lab and re-tested, but the customer continued to find corrosion. ARC Gas Products then examined the 50 feet of plumbing from the customer’s gas room to the testing room. That’s when they hit the nail on the head. “Whoever did their plumbing didn’t leak test it, so as the gas went through, oxygen was getting mixed in,” Gutierrez says. “It probably took us about two weeks to find the problem that had nothing to do with our gas, but we showed the customer that we were willing to work with them in order to find a solution.”

This type of service results in long-term, loyal customers who trust ARC Gas Products. “Our relationship with that customer has become so strong that they have chosen to stay with us because of our relationship, rather than choosing a competitor who offers a lower price,” explains Gutierrez. “We service our customers 100 percent, not just try to sell them a product.”

A Boot that Fits
Being in the Silicon Valley, ARC Gas Products’ service area is unique. The company has been able to maintain one location with a fleet of six trucks because the entire service area is just under a 50-mile radius, which happens to be shaped “like a boot.”

“We don’t feel the need to have a lot of stores at this particular time, and we’re glad because we are able to concentrate on what is happening right here,” Guerra says. “But as we continue to diversify the company, we eventually will branch out into satellite locations.”

Timely response is taken seriously, and the service area size allows the company to do so quickly. Depending on the degree of the situation, the company offers same-day service. If a situation can’t be handled over the phone, Guerra employs his Response Team. “This is a team made up of the company’s vice president, the plant and sales manager, the salesperson involved and anyone else we might need,” explains Guerra. “They go to the customer that day, present themselves and work out the issues so that we can settle the situation. Our number one commitment to our customers is to keep them running.”

ARC Gas Products’ customer base consists of semiconductor support, packaging and R&D companies, plus manufacturers, fabricators and even other distributors. Through association with distributors in the area, ARC Gas Products has become the supplier of specialty gases for distributors who don’t have labs. Many of the distributor customers had been buying products from the majors, but switched over to ARC Gas Products. “This is the level we have risen to, and we’re very proud of that,” Guerra says.


Employees take pride in presentation, which is a highlight of ARC Gas Products' store.

Training for Success
Although ARC Gas Products produces primarily gases, it still remains tied to its industrial roots. The ARC Gas Training Institute, with an emphasis in welding technology, provides technical training to over 200 customers each year. It’s intended to help customers better train their employees. Most of the courses are lab-based theory, although the MIG welding course is hands-on.

“Because the training is held at our facility, our customers become better aware of whom we are, what we represent, and the kind of products we have on the floor,” says Guerra. “This is a great opportunity for both of us because many times our customers only know the people here who answer the phone or the salesperson they partner with.”

Customer training on specialty gases will be offered in the future.

Grasping Opportunities
Under President Daniel Guerra’s leadership, ARC Gas Products has grown steadily over the past 22 years. He recognizes the industry is evolving, and evolving with it has proven to be successful. “Years ago, when people thought of selling welding equipment and supplies, they pictured a dusty blacksmith shop,” Guerra says. “Well, this is not that industry anymore. There are a wealth of opportunities out there for growth today, and we will continue working toward our goals to train our people, work with our customers and grow our company.”

ARC Gas Products is a prime example of how taking a risk can be profitable. With Guerra at the helm, the industrial, medical and specialty gases company is sure to continue its exciting journey of taking on new endeavors.

Gases and Welding Distributors Association