Along the shores of the Indian Ocean and on the Mombasa-Nairobi highway sits a CEO content with life in the East Africa gases business.
Paras Pandya is CEO of Synergy Gases (K) Ltd, an ‘ambitious project’ formed in 2005 and an enterprising industrial gas company that’s firmly in the ascendancy.
With a flourishing reputation and the contracts to match, it’s easy to see why this 29 year-old CEO is so confident in his company’s prospects.
Pandya believes the demand for gases in the African continent is set to increase considerably in the years to come and with Mombasa-based Synergy Gases building on Kenya’s strength as the most developed economy in East Africa, the company is in a prime position to meet this growing demand.
Synergy Gases sits proudly on the main route between Mombasa and Nairobi, but this represents much more than a highway between two cities – for Pandya, it’s a path to progression. Kenya’s position as the most developed economy in the region affords Synergy a wealth of opportunities and as Pandya tells me, it’s a ‘gateway to Africa’.
“It gives us access to a wider market,” he explains. “At synergy Gases, we have set-up distribution hubs nationally and now we are setting-up distribution hubs in neighbouring countries.”
“We have adopted a system of on-site filling at the distribution hubs. We transport the bulk from our main plant to the depots and fill the cylinders there – this removes the cost of transporting cylinders to and fro.”
“We have now invested in trucks which will travel to remote areas and do on-site filling. This gives us an advantage where we are supplying to projects in remote area’s such as Congo and Sudan. We are able to send the bulk, thus reducing our transportation costs, and fill the cylinders on-site without having to bring them all the way back to the plant for refilling.”
Synergy Gases has grown significantly in just five years and contracts in remote areas such as Sudan and Congo are testament to this.
The ‘ambitious project’ started in 2005 has an outreach into a number of neighbouring countries across Africa and delivers an array of industrial gases – with equally ambitious plans for the next five years.
“Our primary business was logistics and commercial transportation and freight. In 2005 we were looking for diversification and looking for projects to do. It took two years of feasibility and research to complete the viability of setting-up a gas plant and entering the gases business.”
Avid motorsport fan, Pandya, was key to those years of research, having completed his studies in the UK and returned to Kenya to devise a feasibility study and later, a business plan. From there, Synergy Gases was born and has grown step-by-step.
“Our first batch of production started in August 2008. We have a 250m3 per hour oxygen and nitrogen plant, a 45m3 acetylene plant and we have bulk storage facilities for argon, CO2, helium and ammonia and are now progressing forward into the specialist gases market and bulk liquids.”
“We also manufacture medical gases such as medical oxygen, medical air, medical CO2, and nitrous oxide.”
“We supply compressed gases for every process,” Pandya continues, “from welding to life support to instrument calibration. We ensure that the gas you select is the most appropriate for your process and is used efficiently and safely.”
“Synergy gases can also supply gas in bulk form and has a specialist team of experts with experience in both liquid gas pipelines and cryogenic installations.”
Clear, bright blue skies adorn the landscape outside our interviewee’s offices, complete with stereotypical African palm trees that so thrive in this climate.
It’s exactly the sort of scene one might imagine for the landscape of East Africa and out of this relative wilderness, as well as a jungle of research and planning, Synergy has emerged strong and successful.
Much of this success is attributed to the dearth of gas companies already operating in the region; there was a gap to be filled in the market and Synergy had the vision to close that gap.
“The core of the idea to venture into manufacturing gases originated from the fact there was no customer-oriented gas supplier in the market. Due to limited competition, customer needs for specialty and quality gases were not being catered for. This presented an opportunity to provide and supply for this growing market, and that was the primary impetus of setting-up Synergy Gases.”
“At Synergy Gases we decided to offer customers the right quality, with a commitment to cater for their needs and offering a one-stop solution with an emphasis on safety. Initially, customers who were buying from their existing supplier for 50 years started by giving us 20% of their business. As their confidence in our product grew, the customers realised that we were providing high quality products with service and expertise to match.”
“As a result it has gradually increased to close to 100%, because we offer them a solution which they want and will not compromise in quality, service nor safety. Currently, our market dominance is growing step by step.”
“Our initial target sales market was only Kenya, but we have since expanded our customer base to Tanzania, Uganda and the Democratic Republic of Congo.”
Realising the growth opportunity
Synergy’s rise to eminence has not just filled a gap in the market, it’s demonstrated the determination to realise the growth opportunity.
And as Pandya made clear at the start of our interview, there are still plenty of opportunities to be realised across the African gases business.
Oil & gas and the exploration of other natural resources that Africa possesses will provide a fillip for industrial gas demand in the years to come, while the African gases business is still relatively young and in its infancy.
Pandya estimates that this ‘infancy’ places Africa around three decades behind the more established markets of Europe and Asia, but with the right investment and companies seizing the opportunities out there, Africa’s gases business will soon ‘catch-up with the rest of the world’.
Pandya offered the view from within the heart of the region’s gases business, “Africa has an abundance of natural resources and these are now being explored with the finding of oil and other natural resources like iron ore and coal. Africa is the next potential as an emerging gas market, with consumption levels set to increase in the years to come.”
“All these new industries will require large scale ASUs, which could open up a potential for new markets which has not been seen before in the region.”
“With Africa generally considered a developing country and as the second-largest and third-most populous continent after Asia, it has a lot of potential for expansion – especially with the key infrastructure projects taking place. These include dam constructions, bridge construction, power generation systems, and oil and gas rigs.”
“All these, when coupled together, show that a lot of opportunity exists to develop the market further and introduce new technologies from around the globe.”
In Pandya’s own words, ‘Africa is not an easy place to do business’ and both technology and innovation ‘have been lacking’ in the past. Yet our interviewee still exudes optimism in the region and its potential ahead.
“Significant groundwork in operations on the continent can assist with avoiding the various pitfalls that may lie ahead.”
“However, the continent as a whole has a vast potential for development and with key projects still to take place in southern Sudan, Ethiopia and Congo, the potential seems almost endless.”
“Technology and innovation have been lacking in this developing nation, but with the right infrastructure and the right investments, this field is very vast and can be exploited or nurtured as necessary. The potential supersedes everything.”
“We also have to take into account that the gases business is very capital intensive and to have a sustainable business, we have to have a number of long-term strategies in place to enable the business continuity.”
For Synergy, its location in Kenya is a strategic advantage and this developed economy will be key to the company realising its own growth opportunities – in Kenya and beyond.
With the country boasting the highest literacy rate in the East Africa region, Synergy has ‘access to a pool of highly educated and professional individuals’.
By providing the right training and developing skillsets, the company will be able to fully realise its workforce’s potential and create ‘employee loyalty’ through empowerment.
Further still, Kenya offers strength through its comparatively developed economy. Pandya describes Kenya as a growing economy and an economy which is still young and waiting to be exploited. On-site production is a relatively new concept in Kenya and a trend that may fuel growth in future, we understand, while job creation driven by the entry of new industries will also spur growth and new opportunities.
With so many favourable circumstances to be realised, gasworld asked, what are Synergy’s objectives for the years ahead? What growth model is the company pursuing?
Synergy has achieved many of its objectives for 2010 with a number of supply contracts secured and as 2011 looms large on the horizon, Pandya oozes optimism for another strong year ahead. He explains, “In 2010, in line with our long-term business strategy and our objectives for the year, we have secured several huge supply contracts.”
“With 2011 just around the corner, we remain positive for the year ahead as we gear ourselves towards our strategy plans and expansion. We feel the market will have a positive trend as demand for gases will increase due to activities such as exploration of natural resources, namely oil or petroleum.”
“In line with our expansion strategy, we wish to strengthen Synergy Gases (K) Ltd by setting-up distribution centres with the EAC (East African Community) states, to further strengthen our regional sales and give us a niche over our competitors. This will enable us to offer our customers a wide range of services to the highest standards and stay true to our vision and values.”
Much of the groundwork for 2011 has already been laid, though Synergy is keen to explore new niches and avenues for growth. Of particular interest to those readers who may also be attending gasworld’s African Conference in Nairobi, Kenya next month, Synergy is open to expansion via alliances too.
“We are currently in talks with relevant parties looking into the feasibility of setting-up on-site plants and large scale pipeline networks in the near future. LPG in bulk and cylinder form is also an area that we are exploring and planning to develop in 2011,” Pandya says.
“We have also set aside a budget for the research and development of the speciality gases market and increasing the number of bulk liquid customers we have. These areas are of critical importance to increase our market share and dominance in the years to come.”
“We look forward to a number of strategic alliances in 2011 which will enable us to fulfill our objectives.”
“Quality is another aspect that is fuelling growth. With the right fundamentals set whereby quality and safety are the priority, our capability to grab opportunities as they arise and then adapt to these opportunities within a relatively short timeframe enables us to grow rapidly in a changing environment.”
Concluding our interview, Pandya describes the ‘organic’ growth model at the core of the company and is buoyant for what the future appears to hold.
He closes, “As a family-owned company our growth model is definitely an organic one. We know this may not be the fastest way to develop a business, but it’s one in which we believe and a model that has a solid foundation which will strengthen our position as a leading gas manufacturer in the region.”