A R300-million investment promises a new era and sector stability for the Eastern Cape gas industry.
A long-awaited localised industrial gas supply for the Eastern Cape has come one step closer to reality as Air Products South Africa recently broke ground on their latest capital investment – a first of its kind Air Separation Unit for the province – in Zone 3 of the Coega Development Corporation’s Industrial Development Zone (IDZ).
“When our feasibility study on the Eastern Cape showed that there was a high level of customer demand in this region, we spared no time. This reality set the wheels in motion for what is now a very proud, R300-million investment into South Africa’s leading Industrial Development Zone,” commented Mike Hellyar, managing director of Air Products South Africa.
The ground-breaking investment marks the start of a new era for industrial gas users in the Eastern Cape. The new Air Separation Unit (ASU) will be the first of its kind in the Eastern Cape and will bring increased economic development opportunities to the region.
As the largest tonnage supplier of industrial gases in South Africa, Air Products will now be able to supply their Eastern Cape customers directly, with a full bouquet of process gases – oxygen, nitrogen, argon and carbon dioxide.
According to the company, the first phase R300-million investment will bring stability to the local gas sector and it makes business sense given the industrial growth on track in the Eastern Cape. Air Products conducted a comprehensive market review and business case ahead of committing to the long-term lease at the Coega IDZ.
“We chose the Coega IDZ after careful market analysis and are focused on committing to the growth and development of the region by providing long-needed security of supply and value-added customer service,” Hellyar commented.
Ayanda Vilakazi, a Coega Development Corporation (CDC) spokesperson, said the investment showed commitment to socio-economic development in the region and reflected growing investor confidence in the IDZ. “The impact this investment will have on the value chain in many industries – automotive, pharmaceutical, agro-processing and manufacturing – is so significant that it will bring security of gas supply to the region and ensure that jobs along the value chain are protected,” said Vilakazi.
“This is what we call a catalytic investment, as it enables further investment both in the Coega IDZ and the province. We are happy to welcome Air Products as a tenant that will service the gas needs of the broader Eastern Cape through the manufacturing, supply and distribution of a diverse portfolio of atmospheric and speciality gases, equipment and other services.”
Vilakazi added that the new plant represents a major vote of confidence in the future of the Eastern Cape region. “Its strategic importance to local business, communities and industry cannot be underestimated. This investment is a swift and bold response to a clear market need.”
Air Products will design and construct a high-efficiency and reliable plant that produces liquid oxygen and nitrogen – as well as installing a strategic product storage facility on site for critical customers in the Eastern Cape – and has committed to using, as far as possible, local material and equipment suppliers in the construction of the air separation unit.
Hellyar adds that technology would be the backbone on which Eastern Cape expansion would be built. “The focus is on bringing technology and innovation to the region and using it to maximise customer service. Traditionally gas is supplied in either liquid or gaseous form. Air Products will now include a differentiated offering to what is conventionally available in the market by adding variable pressure and volume tanks to its services. The advance means more efficient delivery and engineering – lowering costs to customers,” he said.
The building and installation of the new facility will commence in June 2013, with completion and commissioning planned for the third quarter of 2014.
Air Products South Africa
Tel: +27 11 977 6459
The ground-breaking was attended by key representatives from Nelson Mandela Bay. From left to right: the Nelson Mandela Bay Municipality
executive mayor, Ben Fihla, the Nelson Mandela Bay Business Chamber’s president, Mandla Madwara, Mike Hellyar, managing director of Air
Products South Africa, and Christopher Mashigo, executive director of the Coega Development Corporation.