President Barack Obama has been firmly in the spotlight of late. On a recent trip to the Asia-Pacific, President Obama described the ‘defining and indispensable’ relationship that lay ahead between the US and India, highlighting the strength of interest held in this fast emerging part of the world.

That interest has been mirrored by the industrial gas business for many years, not least in recent weeks with the news that Linde AG has acquired a majority stake in Sri Lanka’s Ceylon Oxygen Limited.

The offer tabled by Linde, which was accepted by majority shareholder Europium Limited for its 95.4% stake, closed on 12th November – after which Linde intended to acquire the outstanding minority shares – under Sri Lankan legislation – from those shareholders who have not accepted.

The move for Ceylon Oxygen represents a significant strategic deal for the group, with Asia cited as a ‘key growth market’ by the company’s Regional Business Unit Head, Sanjiv Lamba.

In a press release announcing the deal, Lamba explained, “The Linde Group is a global leader in gases and engineering, and Asia is a key growth market for the group. The investment in Ceylon Oxygen will expand Linde’s footprint in emerging markets in Asia, and provides the opportunity for us to tap into and participate in the long-term growth prospects in Sri Lanka.”

So why is the South East Asian market such a significant growth market for the gases community? For Linde, the investment in Ceylon Oxygen provides a strong foothold for gas manufacture in Sri Lanka.

The company already operates from two manufacturing sites in Sapugaskande and Colombo, as well as four depots in Galle, Ratnapura, Kurungala and Anuradhapura, producing liquid nitrogen and liquid oxygen at its Sapugaskande ASU. Its Colombo facility houses a liquid carbon dioxide plant, a dry ice plant, a dissolved acetylene plant and nitrous oxide production capability.

Investment news
Aside from Linde’s latest acquisition, the South East Asia/South Pacific region is a thriving hub for investment for the industrial gas and equipment companies.

While the Asia-Pacific has suffered at the hands of Mother Nature of late – Pakistan has been devastated by monsoon rains and flooding, Typhoon Megi tore through the Philippines and Taiwan recently, causing chaos, and Indonesia was hit by a localised earthquake-triggered tsunami off the coast of Sumatra – the region’s gases business appears to be very much in the investment spotlight.

Announcements from Air Liquide, Air Products, the Messer Group, Praxair Thailand, Cryolor Asia Pacific, The Linde Group and VRV highlight the high regard that the South Pacific/South East Asia is held in as an enterprising investment climate.

Not only has Linde invested in its aforementioned acquisition of Ceylon Oxygen Limited, the company also announced, in December 2009, the installation of its central specialty gases supply system at the Denso Corporation’s newly built facility in Thailand. The new facility is a research and technology laboratory at Samutprakan. In addition, Linde signed a deal with PTT Research and Technology Institute for a second specialty gas supply system at its laboratory in Athothaya, Thailand.

The central gas systems will transport multiple automotive calibration gases piped directly into the emissions testing laboratories and will include Linde’s REDLINE® branded points of use cylinder regulators, pressure alarms, gas detection systems – and gas panels from the company’s specialty gases equipment product range.

In a December 2009 statement announcing the deals, Stephen Harrison, Head of Specialty Gases and Specialty Equipment at Linde, commented, “These are very important contracts for Linde, not only in Thailand, but across South East Asia as a whole.”

Elsewhere in Thailand, Praxair has been building on its presence in the country with the news that Praxair (Thailand) Co. Ltd is to build a new energy-efficient carbon dioxide plant in Map Ta Phut. With a capacity of 300 tonnes of liquid carbon dioxide per day, the plant is scheduled to come on-stream in the fourth quarter of 2011.

The new Praxair plant will supply an increasing demand for carbon dioxide blended into compressed natural gas for vehicles, as well as for growth in the shrimp-freezing, beverage, chemicals and other markets. Tongchai Takviriyanan, Managing Director of Praxair Thailand, explained, “We are pleased to support Thailand’s growth and evolving industries with a range of products and applications technologies.”

Praxair (Thailand) Co. Ltd is already the largest carbon dioxide supplier in the country, operating six carbon dioxide plants and one ASU.

In neighbouring Malaysia, Air Products has this autumn signed a contract to supply its SunSoucre™ Solutions gases, equipment and services to a global photovoltaic (PV) manufacturer in the country.

The agreement includes bulk and specialty gases, specialty chemicals and related gas distribution equipment to support the client’s new crystalline PV facility in Melaka, Malaysia. In particular, Air Products will supply on-site nitrogen, hydrogen, argon and oxygen, and specialty gases such as silane, ammonia and nitrogen trifluoride.

From Malaysia, across the Gulf of Thailand and over to Vietnam, where the Messer Group officially opened its first production unit for industrial gases in Vietnam – producing gases not only for the Hoa Phat Steel company but also various industries in North Vietnam.

Opened on 6th October, the facility is the largest ASU in Vietnam with a capacity of 300 tonnes per day (tpd) of oxygen and 510 tpd of nitrogen. Messer invested up to $20m in the production facility and the plant’s opening represented the completion of almost three year’s work. As well as providing all the gas requirements of Hoa Phat Steel’s new integrated steelworks complex in Kinh Mon Town, Messer intends to supply gases to an array of gases in the North of Vietnam too.

The opening of the plant followed the news in earlier 2010 that Messer planned to build a liquefaction plant for carbon dioxide in the country, boasting an initial capacity of 70 metric tpd and rising to 200 tpd in the future.

Also in Vietnam, Air Liquide built on its strong presence in the country with the commissioning of two ASUs in South Vietnam last year. Investing almost €30m in the plants and related supply chain, the company commissioned the two plants in the Saigon High Tech Park and Phu My industrial park in October 2009.

The addition of the two new plants ensures that Air Liquide has four ASUs covering two main industrial basins in the north and south of Vietnam – and the largest installed production capacity in the country.

The ASU in the Saigon High Tech Park is supplying gaseous nitrogen to a world leader in the semiconductor industry and is producing 100 tonnes per day (tpd) of liquid oxygen, nitrogen and argon for the region’s customers. The Phu My ASU, near Ho Chi Minh City, boasts a production capacity of 190 tpd of liquid oxygen, nitrogen and argon – in addition to gaseous nitrogen production.

Air Liquide revealed another development in the Asia-Pacific this July, with the news that the company had fortified its homecare footing with acquisitions in South Korea and Australia. In the latter, Air Liquide has acquired 70% of the Australian sleep diagnosis company Snore Australia, with $5.6m in annual revenues.

At least three leading equipment companies have also underlined their intentions for the South East Asia/South Pacific region, after Cryolor, VRV S.p.A. and PBI-Dansensor all confirmed new developments.

The VRV Group assured gasworld that its new manufacturing facility based in Chennai, India, boasting an area of 130,000 m2, was a sign of its position as a leading global player and the notion of ‘going where the growth is’. Meanwhile fellow cryogenic equipment manufacturer, Cryolor, has also established a base in Chennai under the 100% subsidiary Cryolor Asia Pacific Pvt Ltd.

Consolidating its existing domestic base in India, and now closer to a regional customer base in both South-East Asia and the Middle East, manufacturing has now begun at Cryolor Asia Pacific with the launch of its very first premium quality cryogenic tanks.

Also galvanising its footprint in the Asia-Pacific market, PBI-Dansensor has secured a new distributor in the New Zealand food market by signing-up Formula Foods. As a Danish manufacturer of quality control and assurance equipment, PBI-Dansensor serves both the food sector and other industries using protective gas atmospheres.

The distributor agreement with Formula Foods strengthens the company’s position in the region’s equipment market.

Stable
Overall, the industrial gases business in South East Asia/South Pacific is described as stable and recovering well from the relatively modest year-on-year (YoY) dip in volumes experienced during 2009, Spiritus Consulting assures us.

In South East Asia alone, Spiritus projects a market valued at just under $2.2bn in industrial gas revenues. Singapore ($596m), Thailand ($449m) and Malaysia ($347m) dominate this market, but the country to watch is clearly Vietnam, with a 20% rise in gas revenues in 2009 (YoY) to $102m and both Air Liquide and Messer firming up their interests there.

With the new ASUs of Air Liquide and Messer ramping-up the on-sites on-stream in the country, the gases business in Vietnam can be expected to continue to progress and deliver even greater revenues in the future.