India is beckoning no doubt about it, as one of the most vibrant economies of the world, with an average GDP growth rate of more than 9% in each of the last five financial years and a 300 million strong middle class population, this is a country to watch out for in coming years. AIIGMA (All Indian Industrial Gas Manufacturer’s Association) conducted it’s 30th seminar about the industrial gas industry, on the Eastern coast of the country and in a state massively endowed with rich iron ores.
gasworld travelled to the vibrant city of Bhubaneswar to take part and assess the strength of the Indian industrial gas industry.
‘Gases for sustainable growth’ was the theme of the seminar, held over two days at the Mayfair Lagoon Hotel & Resorts and with around 280 delegates from major gas manufacturers across different parts of India and around the world.
The foreign delegates, numbering over 50, included members from neighboring countries such as Bhutan, China and Sri Lanka as well as other countries like the US, UK, Israel, Switzerland, UAE, Kuwait, France, Singapore, Malaysia, the Republic of Yemen and Germany. Mr Ajai Nigam, Chief Controller of Explosives, PESO, Government of India was the Chief Guest of Honour and inaugurated the seminar. Senior Government officials like Shri S K Thade, Director – IPP, Ministry of Commerce & Industry, Government of India; Shri S Bhattacharya, Deputy Chief Controller of Explosives, East Circle, Kolkata; Shri B Rengaswamy, Deputy Chief Controller of Explosives, Rourkela Sub-Circle Office; Shri D K Gupta, Controller of Explosives and stalwarts like Professor H H Dash, Chief of Neurosciences Centre, AIIMS, New Delhi and Mr N K Pal, Director of BIS also shared their views with the participants.
Bhubaneswar was selected as the venue for this 2008 meeting, because many steel mills are coming up in the region and the prospects for the growth of its gas industry are extremely promising. Orissa, with its rich natural reserves count, has 4177 million tonnes of iron ore reserve and accounts for 34% of India’s total ore deposits, while a significant chunk of that lay in this coastal city. As many as 45 steel producers have signed MOU’s (Memorandum of Understanding) with the state Government, to set up their manufacturing facilities with a combined capacity of 75 MTPA, and that includes ten mega projects.
Indian industrial gas industry
The industrial gas scene in India is extremely positive as all the consuming sectors are in hyper growth mode and whether it be steel, glass, automobiles or the very promising healthcare and pharmaceuticals sector, the width looks extremely positive for the growth of gas and related industries. As India inches to become one of the top five industrial gas producers by 2020, these fast growing sectors will play an important role.
Demand for oxygen, nitrogen, hydrogen, helium and argon is likely to grow at a rate of 15-20% for the current year, while India has witnessed a 20-25% rise in capacity to produce cylinders over the last few years and is expected to retain this growth in the coming years. Industrial gases are expected to grow at more than 20% in the next three years, considering the growth in consumer industry and gas refining applications in fresh areas.
The growth can be higher if increased applications of gases such as nitrogen and carbon dioxide are put in the sectors of food preservation, oil exploration, electronics, fibre optics, animal husbandry and health care segments.
Major demand driving sectors
Steel sector - Steel is perhaps the most ambitious sector for the gas industry, as the event explored these emerging gases growth drivers. India’s rapid economic growth is being built on a frame of steel, with soaring demand in sectors like infrastructure, real estate and automobiles, at home and abroad, putting India’s steel industry on the world steel map.
The rapid rise in production has resulted in India becoming the fifth largest producer of steel in the world, on the back of 50.71 million tonnes (mt) production of crude steel and 51.9 mt of finished steel. The production of finished steel grew by 16.52%, from 44.54 mt in 2005-2006 to 49.39 mt in 2006-2007.
A shower of steel plants
While some of the investment that is being made is directed at modernisation and upgrades of existing steel plants, a major share of it is to either set up new plants or expand existing capacities. From the biggest players like Arcelor Mittal and Tata Steel, to mid-level players like Bhushan Steel and Welspun, the next few years are a time to ramp up production capacity.
India has one of the fastest growing pharmaceuticals markets in the world. For the year 2006-2007 (April 2006 - March 2007, the financial year in the country), the total market was valued at over $7bn, driven by a huge patient base, increasing incomes, improving healthcare infrastructure and a strong penetration of healthcare insurance. The total pharmaceutical market is expected to grow double its present size in four years time. Drugs for acute diseases presently dominate the market, while in days to come increased lifestyle-related diseases are expected to fuel the growth of drugs targeting chronic diseases.
While the glass market in the US and Europe has matured, it is witnessing an explosive growth in both flat as well as value added glass category - demand for flat glass has increased at an average rate of 12-15% each year in last five years. Considering the per capita glass consumption in India (it is as low as 0.60 kg, as opposed to 6kg in western countries), there is a huge opportunity for both the glass and gas industry. While demand for flat glass is increasing at a healthy rate, value added glass is a category which is growing at a rate almost exceeding 20% in the country.
The two main consuming sectors of flat glass are construction and automotive, and both look extremely positive at the moment.
Currently, the Indian commercial vehicles market is the fifth largest in the world and the passenger vehicles market ranks as the ninth largest in the world. The combined growth rate for both these sub-sectors has been more than 20% for last five years and the projected growth rate for next five years is equally promising. Vehicles export is also increasing at amazing rates, cars and multi utility vehicles by 21%, two wheelers by 35%, three wheelers by 43% and commercial vehicles at around 33%. Global players like BMW, Volkswagon, Audi and Scania have entered the Indian market, with Indian auto companies also substantially increasing their production capacities.
Technical papers and presentation
The seminar witnessed renowned experts and industry veterans discussing and presenting papers on various issues related to the gas industry. Prominent among these was Roy Irani, presenting on transportable gas cylinders, a century of manufacturing and retesting, Dr Ing Gerhard (Linde) on mega ASU’s for world scale gasification projects, Satish Kochhar (COO, Air Liquide India) on safe storage, handling and use of compressed gases, and Keith Stewart (Herose Ltd, UK) on safety in production and distribution of gases. Aditi Ozha (research scholar with IIT) won the best technical paper award for her topic of Electrostatics: a possible cause of fire in contaminated oxygen systems.
New President at AIIGMA
Karan Bhatia, Executive Director of Uttam Air Products Pvt. Ltd, New Delhi, was elected as President of the All India Industrial Gases Manufacturer’s Association (AIIGMA) for the period 2008-2010 following the Annual General Meeting held on 24th February 2008. Harvard educated, Bhatia has a strong dedication for upgrading Indian Standards in harmonization with ISO Standards and is a successful entrepreneur with a marketing background.
Steel industry in India
The Inter Ministerial Group constituted for the steel industry estimates steel production to grow at a CAGR of 16% to touch 124.06 mt by 2011-12. This is significantly larger than the earlier official estimate of 80 mt. In fact, India’s steel production capacity is estimated to be 200 mt by 2020.
Arcelor Mittal, the world’s largest steelmaker, plans to set up two greenfield steel projects in India each with a capacity of 12 million tones per annum (mtpa).
Acerinox SA, the world’s second-biggest stainless steelmaker, is joining hands with Japan’s Nisshin Steel to build a steel plant in India.
Tata Steel, the world’s fifth largest steel maker, plans to double its capacity by 2015, by adding another 35 mt capacity.
India’s largest steel manufacturer SAIL is planning to increase its annual production of 12 mtpa to 24.98 mtpa by 2011-12.
Sinosteel Corp, China’s second-largest iron ore trader, plans to invest $4bn to build a 5 mt greenfield steel plant.