Afrox and Air Liquide have issued separate notices of force majeure to their industrial customers in South Africa as medical grade oxygen usage surges in the country amid a second wave of Covid-19 infections.
Both companies have independently confirmed to gasworld that they are aware of the rising requirements for medical oxygen and are actively ensuring that adequate supply is available to meet those needs.
“Afrox has adequate reserves of liquid oxygen in storage across South Africa and has supplied oxygen as required by public and private hospitals in all provinces at substantially higher than normal demand levels. Installed production capacity is more than 630 tonnes per day,” Schalk Venter, Afrox Managing Director, told gasworld.
“In understanding medical oxygen supply to a medical institution like a hospital, the supply chain of conversion of the oxygen contained in the atmosphere into a pure liquid phase and transported via various logistical means and delivery systems back into a gas phase and into the lungs of patient, must be considered.”
“Due to the large number of hospitalised patients requiring oxygen therapy certain hospitals administer up to 400% more oxygen via bulk tanks and oxygen delivery systems to patients than the designed capacity at the hospital.”
Venter said Afrox is scheduling some deliveries twice a day instead of twice a week currently to keep up with demand.
“Afrox monitors hospital tank levels nationwide via telemetry (all installed bulk tanks at hospitals have telemetry systems), and schedule deliveries accordingly,” he explained to gasworld.
“This additional demand requires Afrox to have flexibility on bulk delivery tankers to transport the oxygen to hospitals. Afrox allocated a portion of the industrial tanker fleet to medical oxygen tankers to enable fast delivery to hospitals.”
“Afrox is also converting additional tankers used to transport other liquid gases to liquid oxygen tankers and will have additional distribution capacity available soon.”
Venter said Afrox is experiencing “unprecedented demand” for oxygen cylinders due to Covid-19 infection spread and has converted 8,000 industrial cylinders to medical oxygen cylinders.
“Hospitals with historical low oxygen demand, like those in rural South Africa, rely on oxygen cylinders which are ordered as required,” he told gasworld.
“Another 7,000 will be converted to bring the total to 15,000 cylinders. Afrox cooperates with hospitals and the Department of Health to ensure fast turnaround times for cylinders, so empties are returned timeously to Afrox filling sites for refilling.”
“In considering the impact of reallocating 15,000 cylinders and 200 tons per day of transport tanker capacity from industrial logistics to medical logistics, Afrox cannot guarantee on time in full deliveries to industrial customers during these unprecedented times, given on the medical side flexibility with distribution assets and cylinders must be maintained to facilitate fast delivery to hospitals.”
“Since oxygen is a lifesaving therapy for infected patients, Afrox made a moral and ethical decision to prioritise supply of medical oxygen while the pandemic persists. Therefore Afrox issued a letter of Force Majeure to industrial consumers that explains that supply cannot be guaranteed and might become erratic or absent.”
Despite the rapid increase in infections and hospitalised patient numbers that require oxygen therapy, Afrox has supplied adequate medical oxygen in South Africa to contracted customers, Venter confirmed to gasworld.
“The efficiency of the collective logistics between the oxygen supply and the healthcare system to deliver the oxygen to the patient is of critical importance. Afrox has successfully cooperated with the medical fraternity, and together with the impact of the actions taken above, managed the situation to meet unprecedented medical demand,” Venter said.
“How long the increased demand for medical oxygen will last, and how long the force majeure for industrial oxygen supply will remain in place is unclear. Afrox cannot predict the further spread patterns of Covid-19 or future demand for medical oxygen.”
“As soon as Afrox can release the transportation assets and cylinders back to the industrial logistics chain it will be done in order to resume service to industrial customers as normal.”
In a statement issued to gasworld in response to queries, Air Liquide said, “In the face of the international Covid-19 epidemic, and especially of a particularly severe second wave in South Africa, Air Liquide’s teams are fully mobilised to address the needs in medical oxygen of the hospitals. Nationally today, the overall evolution in medical oxygen consumption from our hospital customers is increasing very significantly.”
“With the necessary re-allocation of our supply chain resources to serve hospitals in priority, we have sent our industrial clients a ‘Notice of Force Majeure’ to inform them of a possible and momentary interruption of our deliveries.”
Air Products South Africa
Air Products South Africa also confirmed to gasworld that “additional resources and capacity have been diverted into the supply of medical oxygen”, but said it has not had to “constrain any of [its] customers to date”.
“The situation where gas companies have had to prioritise supply to hospitals over industrial consumers is not unique to South Africa and we have seen the same situation develop in Europe and other parts of the world where we operate,” Arthi Govender, Marketing and Communications Executive at Air Products South Africa, told gasworld.
Air Products South Africa said it believes “logistics capacity” is the main constraint as to why the gas companies are struggling to keep up with the medical oxygen demand.
“Medical oxygen supply to hospitals is mainly done through the delivery of bulk liquefied oxygen which requires specialised vehicles and drivers. Gas company trucking fleets are stretched to capacity and are facing their own challenges in terms of driver and road tanker availability,” Govender told gasworld.
“There are also rigorous screening protocols in place to protect the safety of drivers and customers, and this further stretches resources as drivers may be off work due to sickness, or self-isolation.”
“In addition, many hospitals have not been upgraded and depend on medical oxygen cylinders. The increased demand has resulted in cylinder constraints both from a logistical and cylinder availability point of view.”