It’s been a busy decade for The Linde Group. The German-based company has been fortifying its presence all over the world in key applications and geographies, including the Middle East, Africa and the Asia-Pacific.
In South East Asia in particular, Linde has carved out a path to progression both for the group and the region’s gases business.
A new chapter in South East Asia began for Linde in July 2004, with the acquisition of the Singapore Syngas plant on Jurong Island from ChevronTexaco Corp. Renamed Linde SynGas Singapore Pte Ltd, the Jurong Island operation would go on to become a flagship facility at the heart of the company’s operations in the Asia-Pacific region.
While the integration of Swedish gas company AGA in 2000 and the subsequent acquisition of the BOC group in 2006 may have been putting the newly formed The Linde Group in the spotlight, the company was already placing considerable investment into Jurong Island. The BOC deal did, in fact, bring significant strength to Linde’s operations in the fast-growing Asia-Pacific region – though investment in Singapore was firmly in progress by that point.
Linde has been heavily investing in improved engineering and operations at its Jurong Island facility since 2004, developing the site as an asset, and in May 2008 the venture was renamed Linde Gas Singapore Pte Ltd (LGS). From this key site, LGS provides a range of gases and expertise for the Singapore market and beyond, complementing the group’s network of operations across more than 10 countries in the Asia-Pacific.
So advanced is the Jurong Island facility that today, as we conduct our joint interview, LGS operates Linde’s largest and most technically complex HyCO (hydrogen and carbon monoxide) plant in the region and is the largest industrial gas producer of hydrogen for the chemical and refining industries in Singapore.
Sanjiv Lamba, Managing Director for Linde Gas Asia Pte Ltd, Regional Business Unit (RBU) Head for Linde in South & East Asia, and one half of our gasworld interview this month, explained the group’s credentials in the region.
He said, “Linde Gas is divided into nine Regional Business Units. Linde’s South & East Asia Regional Business Unit (RBU) spans 11 countries from Pakistan in the West to South Korea in the East. In this region, Linde is the market leader and employs nearly 4,500 employees.”
“The South & East Asia regional headquarters, Linde Gas Asia Pte Ltd, is based in Singapore. Singapore is also the global headquarters for Linde’s electronics business. We have recently set up a state-of-the-art electronics specialty gases supply chain facility on Jurong Island to act as a regional hub for such gases.”
Liam Kinsella, Managing Director of LGS and Head of HyCO Operations in the Asia-Pacific, affirmed the importance of operations at the Jurong Island facility and noted the wide range of gases that the plant makes available to the merchant market.
In addition to its liquid oxygen, nitrogen and argon capabilities, the plant has effectively doubled Singapore’s carbon dioxide production capacity too.
“Today, LGS operates Linde’s largest and most technically complex HyCO plant in the region, one of the few in the world able to take heavy feedstock to produce carbon monoxide and hydrogen,” Kinsella enlightened.
“LGS is the largest industrial gas producer of hydrogen for the chemical and refining industries in Singapore, and also the largest supplier of carbon monoxide here. It is furthermore the support centre for all of Linde’s carbon monoxide and hydrogen plants in the Asia Pacific region.”
“Our LGS plant also produces liquid nitrogen, liquid oxygen and liquid argon and carbon dioxide for sale in the merchant market. Last year, we built a new carbon dioxide plant at the Jurong Island facility that can produce about 100 tpd of liquid carbon dioxide. The plant makes Linde the single largest merchant for carbon dioxide production in Singapore.”
“With this new investment,” Kinsella assured, “we have substantially reduced the local market’s dependence on imported carbon dioxide, making Singapore now largely self-sufficient in this gas.”
Lamba adds, “Linde also has a facility in Tuas which serves as the regional hub for our specialty gases supply chain, and involves complex and premium specialty gas mixtures which are extremely high quality, prepared to specification and largely for export for use in various industries.”
Jurong Island is one of the largest integrated petrochemical complexes in South East Asia. With the LGS HyCO plant one of the few in the world able to take heavy feedstock to produce carbon monoxide and hydrogen, the company is basking in a wealth of demand that the region presents.
As Kinsella explains, carbon monoxide is in high demand for the production of a number of petrochemical derivatives, while the hydrogen market is developing in line with increasing demand for low sulphur diesel in the region.
“Linde is a technology company with roots in the areas of technology and engineering, so when we decided to invest on Jurong Island we also decided that Singapore would be our ‘centre of HyCO competence’ for the Asia Pacific region,” he enthused.
“At the moment, we are the only industrial gas company in the world that uses heavy feedstock to produce carbon monoxide and hydrogen. This gasification technology is the technology of the future both for clean energy and hydrogen for refineries as it is an environmentally friendly process for producing power, carbon monoxide and hydrogen. Our carbon monoxide is required for the production of acetic acid, polycarbonate and MMA, all of which are currently in high demand in this region.”
“The hydrogen market in Singapore is still developing as the demand for low sulphur diesel in the region varies from country to country – some countries still have a diesel standard with high sulphur content, so the refineries require less hydrogen for the so-called clean fuels.”
What’s driving growth?
Linde’s position in the Asia-Pacific and the South East Asia market in particular is without question; the company is active in more than 10 countries in the region and has invested heavily in developing its operations throughout, both financially and in terms of expertise and technology.
With that in mind, gasworld questioned, what’s driving growth for LGS and for the Singapore market overall?
With Linde so deeply entrenched in the region, the company must surely observe an optimistic view of the market going forward. Equally, LGS is perfectly placed to describe the position the region’s gases business finds itself in and what opportunities lay ahead.
As RBU Head for Linde in South & East Asia, Lamba is first to answer our query, “Singapore is a key market in Asia for Linde and we have invested substantially in our business here. For example, in the last three years, we have invested some S$60m in Singapore and will continue to look for opportunities to invest here to serve the growth sectors.”
“The Singapore economy has rebounded and we expect good growth in the near and medium term. We see the growth in the clean energy sector, and of course in hydrogen requirements for the refineries on Jurong Island to produce cleaner fuels, which will expect to play a major role in the coming years.”
“As part of our strategic planning horizon,” Lamba continues, “we expect to make substantial new investments in new HyCO facilities integrated with various clean energy initiatives being supported by EDB and the Government of Singapore respectively.”
“LGS will concentrate on large tonnage projects consisting of oxygen for clean energy, hydrogen for the refining industry and carbon monoxide for the chemical industry. These are major strengths of the Linde Group, as we are the only gas company who possess all the necessary in-house advanced technological processes to produce these gases using heavy feedstock.”
Kinsella also sees growth intrinsically linked to the aforementioned demand for clean fuels and energy requirements. Having already described the developing market in the region, Kinsella agrees that clean fuel production can be expected to play a major role in years to come.
Further still, he explains that a fillip for hydrogen and other gases could be on the horizon much sooner, as a number of projects that had previously been stalled or delayed begin to start-up again – possibly in 2011.
“Hydrogen is a growing business in the world because of the requirements for fuel quality. There were a number of projects earlier planned in Singapore with large requirements for hydrogen, but the financial crisis caused a number of these to be temporarily put on hold,” Kinsella shared.
“We expect these projects will start up again and believe that Singapore, with four refineries that export most of their products, will have growing requirements for hydrogen in the next ten years. There is also a demand for hydrogen in other areas such as the solar industry.”
“Currently we are working on various HyCO and air gases projects, including evaluating a nitrogen supply system on Jurong Island as another potential growth area in the future. In the spirit of continuous improvement we have set a new target for reliability in 2011 for ourselves, which we believe we can achieve.”
He continued, “We see excellent opportunities in Singapore and we are committed to continue to invest in Singapore and participate in the growth here – in fact we have already secured 20,000 square metres of land for future expansion and stand ready to invest as demand expands. We are well-positioned to continue to grow in Singapore and will continue to work to grow our business sustainably and improve efficiency and productivity.”
Objectives and future plans
As we discuss the South East Asian and Asia-Pacific market, both our interviewees allude to the strength of industry in the region and the healthy growth prospects ahead.
Lamba and Kinsella both share the view that the gas-intensive industries in the Asia-Pacific are key to industrial gas growth in the locality. Tapping into this strong industrial and manufacturing growth, and into the renowned long-term economic growth prospects of the region as a result, is a fundamental strategy for LGS going forward, we understand.
“The market for electronic specialty gases in Asia-Pacific, including Singapore, is growing at a very fast pace as a result of the continuing expansion of the semiconductor industry, together with the rapid development of the newer markets in TFT-LCD displays, LED lighting and solar panel production,” Lamba elucidates.
“The production processes in all these industries use significant amounts of electronic specialty gases materials in packages ranging from small cylinders to 40-foot road trailers. In order to ensure Linde has appropriate capabilities to match this growth, we have invested in state-of-the-art manufacturing facilities in China to serve the Asia-Pacific region, and installed an advanced storage and logistics centre in Jurong Island to serve as a logistics hub for our Southeast Asian customers.”
Sustainability and investment in talent or skillsets is also a fundamental for LGS. “Across the countries in our regional business unit, we aim to deliver sustainable and profitable growth safely. I am pleased that we have established a good track record of consistently developing and delivering a strong growth strategy.”
“In particular,” says Lamba, “it is our talented and capable people that are the key success factor behind our market leadership position in the region. Therefore we will continue to drive our people agenda both in Singapore and across Asia, further developing our bench strength of talent and investing in their growth.$quot;
“We continued to make good progress in all these areas in 2010 as part of our journey to build a High Performance Organisation and a strong team who are able and ready to take on the challenges of the next 5-10 years and lead our businesses of tomorrow.”
Asia is clearly seen as a key growth market for The Linde Group, and the group continues to invest heavily in the region to tap into and participate in the strong industrial and manufacturing growth accordingly. Over the past three years alone, Linde has invested over €600m in South & East Asia and is currently in the process of building the group’s largest ASU in Asia, at 2,550 tpd, at Jamshedpur in India for Tata Steel.
Concluding our interview, Lamba and Kinsella are optimistic about the many emerging trends the region is home to, coupled with organic growth in Asian retail demand like the food and beverages sector. Lamba in particular, sees the region’s already burgeoning industry intensifying further in the years to come, as increasing levels of manufacturing and industrial activity shifts to the Asia-Pacific.
He closes, “Across the region there are a few emerging trends. We see increasing levels of manufacturing and industrial activity shifting to this part of the world, for example, glass, electronics, fibre optics and metal industries including steel, copper and aluminium.”
“All of these industries have their own growth aspirations in this region, and require industrial gases, which presents a great opportunity for us.$quot;