Air Products’ joint venture in India has announced plans to build six new air separation units (ASUs) under a $100m investment.
INOX Air Products Ltd., the Tier One corporation’s joint venture company that it co-owns with the former owners of the Industrial Oxygen Company, will build the sites to serve the growing onsite and merchant liquid industrial gases market in the country.
The plants will produce a combined capacity of over 1,200 metric tonnes per day of liquid product and will serve India’s iron and steel making, glass manufacturing and pharmaceutical industries.
The plants will go into production in 2018 and 2019.
Siddarth Jain, Director of INOX Air Products, emphasised, “The investment in this capacity will bring much needed product into the Indian market. As one of the fastest growing economies in the world, we continue to invest in these projects to ensure that we are in the best position to support the continued growth of the India economy in general, and the manufacturing industry in particular.”
“The investment in this capacity will bring much needed product into the Indian market”
Siddarth Jain, Director of INOX Air Products
The investment seeks to strengthen INOX Air Products’ position in the Indian merchant industrial gases market, which gasworld Business Intelligence valued at around $1.3bn (2015).
As James Barr, Senior Business Analyst, explained, “Air Products currently holds a market share of around 17%. The Indian market is forecast to grow strongly, driven by all industrial sectors, and has expanded at an impressive rate since 2005 under an average GDP growth of 8.4% each year.”
“It is likely that market shares in the Indian gases business will change significantly over the next few years, chiefly due to large investments, exemplified here by INOX Air Products, that will create new revenue streams. Additionally, if the Praxair-Linde merger completes, there could be an attractive divestment package up for grabs in the country.”
Is this the moment that we will look back upon and say that’s when India’s budding industrial gases industry really began to take off?
India has long been the darling of optimistic growth projections, held aloft as one of the emerging economies to watch out for in the years ahead. A number of leading gas and equipment players have moved to position themselves for this keenly anticipated wave of growth, investing in gas production plants and equipment manufacturing sites.
And yet development has appeared sporadic, if not overlooked. To the onlooker, it has seemed something like a case of so long the Bridesmaid and never the Bride, as China, among others, has often stolen the limelight of emerging economies and gained greater traction in its development of industry.
But today’s announcement from Air Products of plans to build six new air separation units (ASUs) in India by 2018/19 comes at a time when the tide appears to be turning for the country. In just the last few days the IMF has released its April 2017 WEO, in which it essentially says that India need not fear losing its tag as the world’s fast-growing economy, even in the face of economic setbacks faced last year.
So is this India’s moment? Is this where it truly begins for the country’s gases industry?
The numbers in favour are compelling. Within the 2016-2020 timeframe, gasworld forecast models predict growth from 8.6% per annum (p.a.) in a low scenario to 11.2% p.a. in a high scenario, resulting in a market worth up to $2.2bn.
With Linde India confirming last year that it is to build an ASU in Andhra Pradesh, rumours of a further plant, lab and academy from Linde, and now the news that INOX Air Products is to build no less than six ASUs in the country in the next two years too, it looks as though the time is now for the Indian gases industry.
Air Products previously announced plans to build, own and operate several new industrial gas facilities in Kerala for Bharat Petroleum Corporation Limited (BPCL) in 2013 through its global hydrogen alliance with Technip.
The scope of the agreement included building two steam methane reformer (SMR) trains – the company’s first ever hydrogen production facilities in the country – and an ASU to produce nitrogen and oxygen for BPCL’s refinery and petrochemical complex. The sites were initially scheduled to supply gases in late 2015.