As margins tighten and the needs of customers change, addressing the technical skills shortage and investing more in innovation will be critical to ensuring continued growth for gas companies within the mining and metallurgy sector.
That’s the view of Sachin Kulkarni, National Sales Manager Bulk at Air Products South Africa.
In its 45 years of serving South African industry, industrial gas company Air Products South Africa has been inextricably linked to the country’s iron and steel sector.
The company’s first air separation unit (ASU) was built at Arcelor Mittal’s (then Iscor) integrated steel works at Vanderbijlpark. Currently, Air Products is an over-the-fence supplier to two of Arcelor Mittal’s sites, Vanderbijlpark and Newcastle, as well as to other major South African steel plants.
From ore extraction and beneficiation to metals processing and recycling, Air Products is active in all areas of the primary metals and minerals (PMM) industry, directly and indirectly. Supplying product via cylinder, bulk liquid and pipeline, Air Products serves a myriad of customers in the metals industry.
“This is true globally, as typically the PMM sector represents the largest user of industrial gases,” noted Kulkarni. “With a slow recovery post-2008 in the construction and manufacturing industries – the main drivers of the metals industry – players in the market can no longer necessarily rely on their existing customer base for growth, but should look to other ways of servicing new and existing customers.”
“Metal industry analysts, such as World Steel Dynamics (WSD), are predicting a protracted recovery and this will be almost entirely dependent on investor confidence. It will be very challenging for countries like South Africa to compete against India and China in the high turnover markets like rebar, metal sheeting, white goods, earth moving equipment and other high volume day-to-day metal products.”
“There is new focus on improving engineering methods, and using research and development (R&D) to find more innovative solutions to help maximise customers’ processes…”
Focus on innovation
Due to the massive disparity in output – with China producing around 500 million tonnes of steel per annum in comparison with South Africa’s nine million tonnes – players in the market are re-thinking their strategies. Trends in the US and Europe are indicating a move towards more specialised, sophisticated and hi-tech industries such as the automotive, armaments and aerospace industries, and a shift away from basic materials processing.
“There is new focus on improving engineering methods, and using research and development (R&D) to find more innovative solutions to help maximise customers’ processes, such as reducing the weight of components for added efficiency and energy-savings in the automotive industry, or engineering new ways to produce a better grade of steel,” Kulkarni added.
For Air Products South Africa, cost reduction in the field of energy consumption has long been top of the agenda, and part of the company’s ongoing commitment to its customers. Thanks to its ongoing research in the field of energy consumption, notably in combustion processes, Air Products has achieved significant savings for its customers in the PMM industry.
Air Products has recently been able to produce a significant reduction in melting costs per ton in global aluminium furnace installations. Using the same principles, the company has also devised ways in which electrical energy can be complemented or enhanced with oxy-fuel burner systems.
Looking ahead, Kulkarni believes the industrial gases industry will need to address both skills shortages and new approaches to processes.
“Addressing the technical skills shortage and investing more in innovation will be critical factors in ensuring continued growth for gas companies within the mining and PMM sector. While industrial gases will continue to be a critical component in smelting processes within the metals industry, it is incumbent on Air Products to be flexible to the changing needs of their customers, as well as all-important safety, health and environmental legislation and compliance.”