Afrox has signed a milestone agreement confirming its R300m investment in a 150 tonne-per-day state-of-the-art air separation unit (ASU) to service industry and health services across the Eastern Cape.

Brett Kimber, Managing Director of Afrox, signed the land-lease agreement with the Coega Development Corporation at a ceremony in Port Elizabeth.

Kimber confirmed the agreement reflects the company’s commitment to support existing and new customers in this crucial industrial development zone.

“Being able to produce gas on the customer’s doorstep will ensure security of supply, especially since we have built-in 10-day back-up storage facilities on-site for our oxygen, nitrogen and argon customers,” said Kimber. “We have longstanding relationships with customers across the Eastern Cape, some going as far back as 20 years, and we see the new ASU as a catalyst for growth for these businesses.”

“Demand for Afrox products is already high in the Eastern Cape and we expect this to increase going forward. This new ASU will service that demand and the investment reflects our greater corporate strategy to meet the needs of customers wherever they arise.”

Afrox’s Coega ASU will also stimulate indirect job creation in the form of maintenance work, water treatment and office services and, during the construction phase, will support local businesses supplying materials for the civil works, confirmed Kimber.

The new plant will be constructed by Linde Engineering, a subsidiary of gases, engineering, healthcare and technologies multi-national, The Linde Group of Germany.

“As a member of The Linde Group, Afrox can call on the latest in engineering know-how and technologies to construct ASUs to the highest, most stringent of global standards,” said Kimber. “Linde Engineering has standardised the most popular plant sizes and equipment for specific applications and has modularised these plants. This means our ASU will be fully fabricated and shipped straight to the Eastern Cape, significantly reducing project time and costs.”

Linde Engineering’s approach to swift ASU construction means far fewer post-commissioning hitches and setbacks than is generally the case with the more common customised plants.

“With pressure increasing worldwide to reduce energy consumption, the new generation Linde plants are between 15% and 20% more energy efficient than other plants of a similar size,” confirmed Kimber.  “In addition, at Coega we plan to harness power factor correction to filter the quality of the electricity coming in, which will consistently ensure energy efficiency.”

The Port Elizabeth ASU will be remotely operated and monitored from Brinsworth in the United Kingdom, where technicians can efficiently maximise plant output and pinpoint problems before they arise on a 24/7 basis.

Coega welcomed the R300m investment, saying that it would support industrial development and serve the needs of the market.

“In order to support the diversification of the industrial base, we need investment in essential utilities such as industrial gas to drive industrial development through ease of supply,” said Ayanda Vilakazi, CDC head of marketing and communications. “Afrox’s investment is a testament to the growing demand for industrial gas in the Eastern Cape and business’s response to that need. We are looking forward to watching them grow together with their clients.”

Kimber confirmed the R300m ASU is part of a greater R1.5bn strategic development programme to boost customer service levels and support Afrox’s growth strategy in South Africa. 

“Other projects in the programme include the establishment of the R300m first-phase of the centralised business campus near Umhlanga in KwaZulu-Natal and the recently commissioned R200m ASU at Afrox’s Pretoria West site.”

Afrox is also installing a new generation modularised hydrogen plant at its Pelindaba site in North West Province in order to serve its merchant market. The new plant, which will replace two existing hydrogen plants that have reached full term, is scheduled to come on stream second quarter 2014. Current plans are for the Eastern Cape ASU to be commissioned the first quarter of 2015, and work on the Coega site will commence in first quarter 2014.