Eastern Cape ‘the winner’ in Air Products’ national investment strategy
Air Products South Africa has a new home in Zone 3 of the Coega IDZ in the Eastern Cape through its weighty investment of R300-million into a state-of-the-art air separation unit – one of a number in South Africa to benefit from the company’s strategy of long-term capital investment.
The Air Products decision to locate in the Eastern Cape came after careful market analysis and business case studies and the investment became official with the media announcement in the EC Herald in October 2012.
This first-of-its-kind facility was formalised at the official lease-signing event between Air Products and the Coega Development Corporation (CDC) in December 2012. As the largest tonnage supplier of industrial gases in South Africa, Air Products will ensure the full bouquet of process gases will now be available.
The company celebrated this momentous partnership and investment by hosting a glittering gala dinner on 7 May at the new Boardwalk Hotel and Convention Centre. The invited guests, included government representatives, the Nelson Mandela Bay business chamber leadership and prominent business people.
Long-awaited localised industrial gas supply for the Eastern Cape came another step closer at the Sod Turning event on site at Coega on May 8, 2013, showcasing Air Products’ commitment to ensuring sustainability of gas supply for years to come.
Construction on the high efficiency and reliable plant will commence in July 2013, followed by installation, and commissioning planned for the third quarter of 2014.
The dedicated and committed Air Products team now hits the ground running to bring to you – the Eastern Cape valued customer – gas supply and customer service you can rely on.
Join us as we provide you with regular updates on the progress at our plant in Zone 3 of the Coega IDZ.
Air Products South Africa celebrated the delivery of a safe and injury-free construction project when the contractors handed over the keys to the company’s R300-million air separation unit (ASU) in the Coega Industrial Development Zone (IDZ) in November 2014.
“In meeting our delivery commitment, we have worked hand-in-hand with the contractors to ensure stringent application of health and safety rules. As a result, we see a project delivered within its 18-month allotted timeframe, without injury or incident, enabling us to deliver both to our customer service promise and our health and safety commitment to sending every one home safely, every day,” Air Products Corporate Risk Manager Sue Janse van Vuuren said.
Air Products broke ground on its site in the Coega IDZ in May 2013, and met its commitment to have the plant commissioned and completed – with gas flowing to customers – before the end of 2014. The ASU is the sixteenth such plant to be built in this country by Air Products South Africa, and the second to be completed and
launched this year.
Van Vuuren said the incident-free delivery of the plant in the Coega IDZ was a direct result of Air Products’ integrated safety, health, environment and quality (SHEQ) management system.
“The system integrates a number of elements, including Air Products’ global standards, local legislation, certification system requirements and best practices, with compliance monitored through various auditing and reporting processes,” she said.
The ASU brings security of industrial gas supply to Eastern Cape industry for the first time, but this depends on the consistent application of stringent quality and safety standards, Van Vuuren said.
She said Air Products’ existing Deal Party facility in Port Elizabeth was an excellent example of consistent application of health and safety standards. The plant, which blends gas and welding mixtures, fills cylinders and supplies various industrial and specialty gases, has maintained an incident-free safety track record for more than 30 years.
“We hope to continue this incredible feat at the new ASU,” Van Vuuren added.
The launch of the Coega ASU followed the company’s recent starring role in the annual “Oscars of occupational health and safety” where it took home three platinum NOSCAR awards from the National Occupational Safety Association (NOSA).
“The awards confirm that we are in the top echelon within our industry sector across South Africa; and our repeated success demonstrates our consistency. In our industry, where safety is of the utmost importance, recognition such as this confirms to our customers our world-class approach to safety,” Van Vuuren said.
Along with 26 regional NOSA awards for Air Products over the past year (subs: 2014), national platinum NOSCAR awards went to Air Products’ head office facility for the eighth time, to the Springs facility for the fourth time, and the Pinetown facility won its first platinum trophy. The awards recognise excellence in implementing the NOSA ‘5 Star’ environmental, health and safety system.
“NOSA’s ‘5 Star’ system enables us to benchmark ourselves against environmental, health and safety legislation and best practices. It also gives our existing and potential customers a measure of our commitment and performance in this field,” Van Vuuren concludes.
Tankers are lining up for gas at Air Products’ newly-commissioned air separation unit (ASU), the first to bring secure, localized supply of industrial gases to Eastern Cape industry.
The R300-million investment in the Coega Industrial Development Zone (IDZ), which came online this month, was made in response to growing demand and positive economic signals from the region. The new facility strengthens the Eastern Cape’s supporting infrastructure for industrial investment and adds value to local industry through security of supply and supply chain efficiencies.
Equipped with state-of-the-art cryogenic air separation technology to deliver optimal energy efficiency, the plant has production capacity for 110 tons per day of liquid oxygen and nitrogen.
Air Products broke ground for the new facility in May 2013 and has met its commitment to commission the plant and have gas flowing to Eastern Cape customers before the end of 2014.
Air Products driver Albert Msileni closely monitors the filling of a tanker with liquid nitrogen earlier today.
INDUSTRIAL gas leader Air Products is confident regarding the prospects for its new air separation unit (ASU) in the Coega Industrial Development Zone (IDZ) as the facility moves into the commissioning stage ahead of its official opening in the fourth quarter of 2014.
The R300-million plant – the 16th built by Air Products in Southern Africa – is the first primary gas production facility in the Eastern Cape. The facility forms part of the company’s R2-billion strategic investment pipeline, focused on establishing a solid countrywide gas production and supply network.
While acknowledging that market conditions were challenging across the board, Air Products General Manager for Central Services, Josua le Roux said that the company’s expansion strategy was based on a long-term view of market demand and ensuring that the business was well-positioned to grow alongside its customers.
“Our market analysis showed strong demand for industrial gases across a range of industries in the Eastern Cape. We were encouraged – and still are – by the positive industrial and economic growth prospects of the province, and particularly the pipeline of mega-projects coming into the Coega IDZ,” Le Roux said.
Air Products had secured new business from its IDZ neighbours FAW and APM Terminals on the back of its investment – which has boosted the security of supply of industrial gas to the Eastern Cape, Le Roux said.
“We committed that gas would flow from the new air separation unit before the end of 2014, and the project is now 95% complete. We are firmly on schedule to launch the plant during the fourth quarter,” he said.
Nelson Mandela Bay Business Chamber CEO Kevin Hustler acknowledged Air Products’ continued progress towards meeting its commitment to Eastern Cape industry, and said their investment reflected growing confidence in the region.
“We are very positive about the growth prospects for the Eastern Cape over the long term, with the level of investment we are now seeing flow into the region – particularly the upgrading of ports and rail infrastructure by state-owned enterprises. Public sector investment of this order has been proven to stimulate private sector confidence and investment, and Air Products’ new facility bears testament to this,” he said.
Construction and installation of the ASU is complete, and Air Products’ engineering team has commenced with starting up the utilities, including the electrical and process water cooling systems. Contractors are busy putting the finishing touches to supporting facilities and administration buildings.
Utilising state-of-the-art energy-efficient gas production technology, the facility will produce 110 tons per day of liquid nitrogen and oxygen, and was designed with the capacity to scale-up production in line with market demand.
GLOBAL industrial gas leader Air Products is making an impact in the Eastern Cape and creating employment and business opportunities alongside economic advantages for local industry with its R300-million investment in the province’s first air separation unit (ASU).
Construction and installation of the plant in the Coega Industrial Development Zone (IDZ) will have created approximately 120 jobs by the time it is commissioned in the fourth quarter of 2014, said Air Products onsites project manager Robert du Pisanie.
The new plant will supply industrial gases, in particular oxygen and nitrogen, to Air Products’ established Eastern Cape customer base. It will also open up opportunities for entry into new markets with a series of new prospective clients showing increased interest in the company’s expanded – and more affordable – offering locally.
The first of its kind in the province, the ASU will bring security of supply to industry that previously relied on gas being trucked cross-country by road. It will produce 110 tons of liquid nitrogen and oxygen per day and has been built with the capacity to scale-up production to meet market demand.
The project has also created opportunities for local small and medium enterprises (SMEs), consultants and contractors. Du Pisanie said the civil works were “100% implemented by Eastern Cape contractors”, with the lion’s share of the engineering and design work also done by local consultants.
He added the company was committed to pushing as much as possible of the Air Products investment into the Eastern Cape.
“An air separation unit is a highly specialised, technical operation and, out of necessity, most of the components have to be imported. However, in terms of construction materials, we have sourced a significant proportion from Eastern Cape suppliers,” he said.
In addition to employment created during construction and the electrical and mechanical installation phases, the plant itself will employ between 10 and 15 people once operational.
“The significant impact however is in the local and regional value chains where security of supply and the support of our world-class technologies enabling customers to improve processes and competitiveness, will unlock business opportunities and support employment,” Air Products managing director Mike Hellyar said.
He said Air Products had made a strategic decision to locate an air separation unit in the Coega IDZ based on promising economic and industrial growth in the Eastern Cape, particularly the pipeline for mega-projects at Coega, and growing demand for industrial gases in diverse sectors from automotive to agro-processing, food and beverage, renewable energy and pharmaceuticals.
The project is well on track for completion in the fourth quarter of this year, with gas set to flow to customers before the end of 2014.
Air Products unveiled the towering “heart” of its new Eastern Cape air separation unit today (14 May 2014), marking a milestone in progress towards commissioning of the R300-million plant by the end of the year.
At 32 metres tall and weighing in at 56 tons, the cold box is a new landmark in the Coega Industrial Development Zone (IDZ).
It is the key component in the company’s cryogenic air separation process which will provide Eastern Cape industry with secure supply of industrial gases.
The plant will produce 110 tons per day of liquid nitrogen and oxygen, and is built with the capacity to scale up production in line with market demand, Air Products managing director Mike Hellyar said today.
“The new air separation unit will enhance the supporting infrastructure for industrial development in the Eastern Cape and support business sustainability in the region through stimulating down-stream job creation, strengthening supply chain linkages and contributing towards the critical mass needed to position the Eastern Cape as an investment destination of choice,” he said.
Hellyar said the availability of a stable supply of industrial gas completed the quadrant of utilities as the fourth utility (water, electricity, fuel and gas) essential to doing business, and “opens the doors for future industrial growth”.
He said the new air separation unit represented Air Products’ confidence in the region’s economic growth prospects, signalled particularly by the growing pipeline of investment into the Coega IDZ.
“We made a strategic investment decision based on thorough market analysis, which showed growing demand for industrial and specialty gases in a number of sectors in the Eastern Cape. Our new plant gives existing and future customers the certainty of a stable gas supply, supporting competitiveness by enabling process innovation and efficiencies.
“The availability of this secure supply also enables us to bring the benefits of industrial gas to non-traditional users, stimulating demand and opening up new markets, with positive knock-on impacts on industrial activity and economic growth in the region,” he said.
Hellyar said this was in line with Air Products’ strategy to identify and prioritise growing market sectors, and then develop long-term, mutually beneficial relationships with customers within these markets.
Construction to date had been injury- and incident-free, he said, and the company was firmly on schedule to commission the plant and have gas flowing to customers in the final quarter of 2014.
Construction and installation of the plant has created about 120 jobs as well as business opportunities for local small and medium enterprises (SMEs), consultants and contractors.
Hellyar said Air Products was committed to directing as much as possible of its investment in construction of the plant to local entities and expertise in the Eastern Cape. Most of the engineering and design of the civil works were performed by local consultants, and 100% of the construction work was awarded to Eastern Cape contractors.
Air Products On-sites General Manager Robert Richardson said the high-tech, energy efficient plant was a feat of engineering excellence that showcased South African-driven technological innovation.
The Air Products South Africa engineering team oversaw the design of the air separation unit and its components, most of which were manufactured in South Africa, including the cooling tower, storage tanks, nitrogen recycle compressor, electrical motor and ambient air vaporizers.
Richardson said the new plant incorporated technological innovations and the latest available air separation technology designed for both optimal energy efficiency and maximum product output capacity.
The use of computer-aided engineering (CAE) tools such as computational fluid dynamics (CFD) and finite element (FE) software to optimize rotating equipment design enabled higher equipment efficiencies and minimised electricity consumption, he said.
The cold box, which took 36 months from design to completion, arrived in the Port of Ngqura in mid-February. After on-site inspection, and installation of ladders, access platforms and valves, it was manoeuvred from its horizontal position to upright placement on a purpose-built concrete foundation with the aid of specialised heavy-lift cranes.
“Although the final lifting and positioning process took just 20 minutes, it was the culmination of a six month process of developing a detailed lifting plan and rigging study, and two days of intense on-site preparation,” Richardson said.
The highly power-efficient plant will produce liquid oxygen and nitrogen, and house strategic product storage facilities for critical customers in the Eastern Cape. The plant will service diverse sectors including automotive and other manufacturing, pharmaceuticals, agro-processing, food and beverage, and renewable energy.
INDUSTRIAL and specialty gas products and chemicals company Air Products is currently constructing a state-of-the-art air separation unit in Zone 3 of the Coega Industrial Development Zone (IDZ) in Nelson Mandela Bay.
Mike Hellyar, MD of Air Products SA – South Africa’s leading producer of industrial gases – explains the role of industrial gas as a utility, as well as the company’s plans to stimulate market growth in the Eastern Cape.
At the signing of our lease agreement with the Coega Development Corporation (CDC) at the end of 2012, CDC business development executive manager, Christopher Mashigo, hailed the arrival of the “fourth utility”. As an industrial gas company, we were ecstatic to note the CDC’s acknowledgement of what we have long known: that for industry, gas is the fourth corner in a quadrant of utilities essential for doing business.
Like the essential elements – air, fire, water and earth – industry needs water, electricity, fuel and gas for production. The concept of industrial or speciality gas as a utility is an appreciation of its consistent and growing role in most industrial processes. Gas is literally in everything we do – and Air Products has proven this across the industries we serve, from automotive to agro-processing; pharmaceutical to petro-chemical; and a range of manufacturing applications in-between.
To classify industrial gas as a utility is a logical step, simply meaning that the product is always available when required. For example, when a customer requires nitrogen, all they have to do is open a valve and the product is there ‘on tap’, because we have provided a direct pipeline. Essentially, this is what defines the term ‘utility’: requirements are met at the push of a button.
Our new air separation unit, currently under construction in the Coega IDZ, will ensure security of gas supply to Eastern Cape industry for the first time. The fourth utility, as Mashigo says, is here and we are certain it is going to re-shape the industrial future of the province.
We have been keeping a close eye on the economic stability of the Eastern Cape over the years. We have been watching the Coega IDZ gain traction as it racks up significant investments. We are confident that we are going to see volume growth and industrial activity increase in the region. Establishing our air separation unit in the Coega IDZ is a clear indication of local industry’s need for gas, previously and precariously delivered by long-distance trucking. We are already seeing the value of establishing this new plant after the signing of our neighbouring IDZ tenant, First Automobile Works (FAW), as a new customer. Several more are still under negotiation.
We anticipate that more companies will position themselves in and around our plant at Coega and that they too will experience the service difference many others enjoy currently. This will contribute to the full realisation of industrial gas as a fourth utility for the Coega IDZ. In the interim, we will continue to supply gas to ensure uninterrupted security of supply.
Stimulating Eastern Cape demand and market growth
Both the demand and the supply side are strong in the Eastern Cape – so why has it taken a trailblazer such as Air Products to take the first step? We have always considered ourselves to be industry leaders, and the indicators show that we are stimulating Eastern Cape demand and market growth.
The positioning of our new air separation unit in the Coega IDZ gives Air Products the opportunity not only to serve existing industrial gas users better in terms of security of supply, but presents two further opportunities – firstly, to assist existing users in reducing costs and improving efficiency, and, secondly, to showcase the benefits of gas to non-traditional users. This, we believe, will stimulate demand and open up new markets for industrial gas, with positive knock-on impacts on industrial activity and economic growth in the region.
Agro-processing, for example, is a growing sector in the Eastern Cape and has been identified by both provincial and national government as a key sector for industrial development. There are significant opportunities for players in this sector to reduce energy costs and improve both processes and product quality by using industrial gas as a supplement or replacement for existing methods such as mechanical freezing. Industrial gas is primed to replace and improve traditional methods in this sector and others.
Air Products is committed to innovation in this regard. In an environment of growth and constant change, the need for innovation, reducing costs and improving efficiency is critical to remaining competitive. Air Products’ approach is to work hand-in-hand with our customers to streamline processes and optimise energy efficiency. Air Products is committed to supporting the growth of economic activity in the Eastern Cape, and we will grow with the market as it expands – a promise that is as secure as our supply.
THREE primary schools in Nelson Mandela Bay experienced a joyful start to the school year today after receiving a package of tailor-made essential goods from leading industrial gas company, Air Products, as part of its committed corporate social investment activities.
Last year Air Products handed Community Chest a donation and the fundraising organisation went on to identify needy schools in the city which would best benefit.
A range of critical infrastructure was bought for three schools in dire need of tables, chairs and other key operational items and delivered today, amid celebrations and thanksgiving.
Mngcunube Primary School in KwaNobuhle near Uitenhage received 20 tables, 80 chairs and three carpets; Nomathamsanqa Primary School in Despatch accepted a donation of kitchen utensils for the feeding scheme and Kwazakhele-based Seyisi Primary School received a sick bed for its first aid room.
Air Products’ Area sales manager, Pierre Fourie said at the Mngcunube Primary School handover, that it was a heart-warming to see the excitement on the faces of the children as they received their new desks and chairs.
"The impact that we hope to make is to inspire the learners and to ensure they look forward to coming to school every day. A favourable learning environment is important and we are proud to be a part of contributing to that goal, particularly as Air Products prioritizes education as central to our corporate social investment,” says Fourie.
“Education is the key to unlocking the potential in future chemical engineers, scientists and artisans and it starts at primary school level. A small contribution can go the distance when it comes to changing lives, which is what we aim to do.”
Mngcunube Primary School principal, Monwabisi Pepeta, was overcome with emotion, “We are one of the largest primary schools in the area and we struggled to find funds to buy more desks and chairs for our learners. We were blessed by this generous donation. A real need has been fulfilled and I am very thankful to Air Products and Community Chest.”
Nomathamsanqa Primary School principal, Thozamile Maqungo, said he was grateful for the donation which will contribute to the school’s feeding programme. “Previously the children had to stand in long queues to wait for their meal, and we had to hand out the food in phases because we did not have enough plates for each learner. This was a time-consuming and frustrating process, but we are grateful and excited for the positive change this donation will bring,” says Maqungo. Seyisi Primary School principal, Xoliswa Zikishe, also expressed her gratitude on behalf of staff and learners, and said a real need at the school has been fulfilled. Community Chest Chief Executive, Beulah Lumkwana, says the donation comes at the right time and will start the school year off positively, “This is not just a donation, but rather an investment by Air Products into the future of these learners.”
The Community Chest is a fundraising organisation that effectively distributes resources to support development initiatives in vulnerable communities within Nelson Mandela Bay and has established an ongoing partnership with Air Products.
AIR Products’ new air separation plant in the Coega Industrial Development Zone (IDZ) has moved another step closer to its opening target with the arrival this week of a key piece of equipment that will tower over the Coega IDZ and form the heart of the R300-million plant.
At 32 metres high – roughly the height of a nine-storey building – the cylindrical steel cold box will add a distinctive landmark to the Coega landscape once it is lifted into position with multiple heavy-duty cranes.
Air Products remains firmly on schedule for completion of the plant in the third quarter, followed by commissioning and the flowing of gas in the fourth quarter of 2014, said Air Products General Manager On-sites Robert Richardson.
He said the cold box was the “heart of the plant” and was probably the most distinctive feature of every cryogenic air separation plant.
The cold box’s arrival on site on Tuesday, transported by a self-propelled modular transporter from the Port of Ngqura, where it arrived on Sunday, 16 February, signalled the successful completion of a complex chain of behind-the-scenes processes in engineering, design, procurement, manufacturing and logistics.
“Together with the arrival of other high-tech components from America and Europe over the past few weeks, this means the construction of the plant now moves from the major civil and building works stage into the mechanical phase of the installation,” said Richardson.
The cold box houses and insulates the cryogenic equipment for the refrigeration and distillation of atmospheric air into liquid oxygen and nitrogen. Several heavy-duty cranes will lift and fit the cold box into its final position on a massive concrete foundation, Richardson said.
He said the concrete foundation, together with lay down areas and support trestles where the cold box will rest horizontally for inspection and preparation prior to lifting, were constructed well in advance to allow time for the concrete to cure.
After inspection for possible shipping damage and quality control, the cold box will be fitted with valves and safety equipment, and ladders and platforms will be welded into place along with the application of corporate branding.
Air Products’ engineering team has conducted a rigging study and developed a lifting plan to determine the placement of the lay down areas, the cold box’s position in the lay down areas, as well as the number and size of the cranes, and health and safety issues.
“The project has been injury-free thus far and it is important to us that we keep it that way. Air Products has supervised and conducted many of these lifts before, and this lift will once again be supervised by our experienced team with a key aim of sending everyone home safely, every day,” Richardson said.
The Coega Development Corporation (CDC) said the arrival of the cold box was not only a milestone for Air Products but also for Coega, adding that it would become a new Coega IDZ icon for Eastern Cape businesses using industrial and speciality gases.
“The arrival of this essential component means that Air Products is one step closer to completing their plant and opening for business which ultimately means they will be servicing their clients in the IDZ and across the Eastern Cape at a higher level, bringing security of gas supply both to the city and the province,” said Ayanda Vilakazi, CDC head of marketing and communications.
“The CDC welcomes the speed at which Air Products is working and looks forward to the plant coming online.”
Air Products managing director Mike Hellyar said the company took a strategic decision to build the new air separation unit in order to provide its Eastern Cape customers with improved security of supply, against the background of positive economic and industrial growth in the province, particularly in the Coega IDZ. “The location of a plant in the Eastern Cape reduces the need for expensive and risky cross-country trucking of products from Gauteng,” said Hellyar.
“Market analysis conducted by Air Products showed high demand for industrial gas across the province’s automotive sector, as well as the agro-processing, food and beverage, and renewable energy sectors. In addition to servicing existing customers and traditional users of industrial and speciality gases, Air Products has identified strong potential to stimulate demand and move into new markets,” Hellyar added.
The construction phase of the plant has created approximately 120 jobs and Air Products has directed the majority of the project investment into the Eastern Cape by engaging local consultants and contractors in the design, engineering and construction of the facility.
By creating security of supply, the new air separation unit will unlock business opportunities and support employment through the entire value chain of the industries it services, including the automotive, food and beverage, agro-processing, pharmaceutical and renewable energy sectors.
Mike Hellyar, Managing Director of Air Products SA – South Africa’s leading producer of industrial gases explains their move into the Eastern Cape and the spin-off advantages for business and investment in the region.
Economic unpredictability is not something that only faces business operating in South Africa, but rather every company in the world. Among the universal challenges are rising operational costs – particularly those associated with transport and energy. As the world moves towards smarter technology and greener solutions, businesses around the world must keep up – or face the risk of losing out.
For our power-intensive air conversion business; escalating oil and electricity costs have not only impacted our bottom line, but also those of our customers. In particular, those companies situated within the Eastern Cape.
Alongside this pressure, business demands continue to grow. And over the last few years, we at Air Products have noticed an increase in demand for liquefied industrial gases including Carbon Dioxide, Nitrogen, Oxygen and Argon from our customers in the Eastern Cape.
The question was how do we meet their demand but without incurring further cost pressures and causing damage to the environment by long distance hauling. The logical answer was to be closer to our customers.
Historically, gas supply to customers located here has either been local and unreliable, or trucked down from other provinces and cities – incurring costs and causing damage to the environment – exactly what we are trying to avoid.
It was for this reason we conducted a comprehensive feasibility study of establishing an Air Separation Unit (ASU) in the Eastern Cape. What we found was a market that was open for change and hungry with demand.
Operationally, we had to make a change to meet these challenges. The key to good operational strategy and long-term success is being able to identify and manage not only risk, but also opportunity. It means making the right long term investment choices for business. Our investment into the Eastern Cape does just that – it’s our long-term commitment to growth and to our customers, both existing and potential. It’s also a demonstration of our endeavours to ensure value for money, and a sustainable environment.
At present, a number of companies are working with key players in the Eastern Cape market to drive economic development and socio-economic change in the region. It is companies such as Air Products in partnership with the Coega Development Corporation (CDC), Nelson Mandela Bay Municipality and the Nelson Mandela Bay Business Chamber who are having a broader impact on the region.
Certain industries are set to be catalysts to this projected economic development – in particular the automotive, food and beverage, renewable energy, agro-processing and medical and pharmaceutical industries.
Once completed in the third quarter of 2014, our ASU facility in the region will deliver process enhancement and cost cutting opportunities to these customers, and long-term sustainability of gas in the region. The construction and operation of our facility will also stimulate down-stream job creation, strengthen supply chain linkages and contribute towards the critical mass needed to position the Eastern Cape, and South Africa, as an investment destination of choice.
Our arrival in the Eastern Cape will enable business and industry to receive a secure supply of industrial gases and open the doors for future industrial growth. It also represents our shift in focus from production to security of supply and therefore driving economic change.
We look forward to being a further part of South Africa’s green energy hub, and to economic growth – right here, in the Eastern Cape.
INDUSTRIAL gas company Air Products is notching up heavyweight clients on the back of its decision to establish a state-of-the-art air separation unit in the Coega Industrial Development Zone (IDZ), by securing Chinese automotive giant, First Automobile Works (FAW).
In September 2013, Air Products won the national contract to supply APM Terminals with welding gases at their Johannesburg, Cape Town, Durban and Port Elizabeth sites. Air Products believes the new contracts are due to their commitment to service excellence, quality of their product and the advantage of “being neighbours”.
“The market research that led to our decision to locate in the Coega IDZ and Eastern Cape is proving true as Air Products’ starts entrenching itself in both new and established markets,” says Mike Hellyar, Air Products’ Managing Director.
“Our presence at Coega has cemented our total national offering and is yielding interest across trade and industry particularly in Port Elizabeth, and specifically within the Coega IDZ, where we are able to maximize the internal supply chain. Coega is built on an industrial cluster model which encourages seamless supply chain integration. We are already benefiting from this – the FAW and APM Terminals contracts are prime examples of how well this approach is working.”
FAW Port Elizabeth project manager, Dan Jordan, says the company is particularly impressed with Air Products’ ability to provide specialised and customised product solutions to suit their requirements, as well as a total engineering solution for supply, storage and use. “In Chinese proverbs they say, ‘a good neighbour is much better than a far relative’. Air Products are strategic neighbours and so we consider them as the preferred suppliers to FAW,” said Jordan adding that the deal clincher was the short distance from the source, convenient and in-time delivery, and the fact that Air Products’ full array of welding material and tools will assist FAW in achieving delivery stability for its clients and the African market.
Air Products will supply FAW with all industrial and welding gases needed in the various processes of truck assembly and will be phased in incrementally to accommodate supply needs anticipated in the future. All indications are that FAW will expand their Coega plant to include production of light passenger vehicles in the future. “This signals market growth for us and is perfectly in line with our projections of a growing industrial hub in Nelson Mandela Bay coming to fruition,” adds Hellyar.
Furthermore, Air Products is showing that it is able to ensure security of supply to meet the standards of international investors. “We have partnered with Air Products already and are commencing with orders and deliveries,” said Jordan, adding that FAW uses gas in welding automotive components.
Air Products emphasized the downstream job opportunities that would be created through its stable supply to both FAW and APM Terminals. “Our objective is to make an impact in the Eastern Cape region, both from an industrial perspective, but also a socio-economic one. The long-term viability of the province is dependent on bold investment and action, which we have unhesitatingly taken. In addition, FAW intends creating hundreds of jobs within Nelson Mandela Bay, expanding its operations and thereby growing the local supply chain – which invariably means jobs,” says Hellyar. “We are set to become an integral part of that.”
APM Terminals is also making use of Air Products’ regional and national services. The company offers shipping lines and cargo owners a full range of services for dry and reefer containers, which includes landside services such as repairs, handling, storage, monitoring and container conversion making use of industrial gas to cut and repair damaged parts of containers.
“We chose Air Products because of their promise to deliver service with a difference and their thorough understanding of our business and needs. We are excited by the possibilities of a fruitful business partnership,” says APM Terminals depot manager, Jason Govender. “We are reliant on gas for all our operations and stable supply is critical – which is exactly what Air Products offers us.”
Currently construction is well-underway in Zone 3 of the Coega IDZ with the R300-million Air Products ASU (air separation unit) expected to come online in the third quarter of 2014.
Reatile Gaz, broad-based black economic empowerment (B-BBEE) alliance partner of leading industrial gas company Air Products, is setting up shop in Nelson Mandela Bay. The move is the second major coup for the city’s gas industry, coming hot on the heels of Air Products recent R300-million capital investment for an air separation unit located in the Coega Industrial Development Zone (IDZ).
The strategic alliance, which will bear fruit for both companies, allows Air Products to supplement their full bouquet of products to the region through Reatile Gaz’s liquefied petroleum gas (LPG) supply while allowing Reatile Gaz to draw on strategic support from Air Products. Since the alliance announcement in 2010, Reatile Gaz spared no time in implementing their growth strategy which included opening a factory in Nelson Mandela Bay. The company has decided to situate operations in the industrial area of Markman.
“Our decision to open a facility in Nelson Mandela Bay was fuelled by the Eastern Cape’s positive investment environment and an expanding LPG market. Partnering with Air Products, we will be able to complete the full bouquet of services to a market that has long been underserved,” said Simphiwe Mehlomakulu, Reatile Gaz Chairperson.
Reatile Gaz has purchased land in Markman and has plans to build and complete a LPG cylinder filling facility by May 2014. The factory would supply customers with LPG in cylinders and bulk. “We are waiting for the go-ahead from the provincial Department of Economic Development, Environmental Affairs and Tourism and then construction will start. We plan to establish a thriving office with a dedicated sales force,” said Mehlomakulu.
Initially, the plans include a small filling facility boasting a 45 000 litre LPG supply, but there are plans to grow as the local economy develops, with Reatile hoping to reach volumes of 200 000 litres of LPG and propane eventually, said Mehlomakulu. The economic benefits will be significant particularly when it comes to employment, the company said.
“We will make use of local construction and commissioning companies to establish our operations and we will ensure that we employ local people to deliver our cylinders. All labour at the depot will also come from the Nelson Mandela Bay region, exemplifying our commitment to job creation and local economic development.”
Air Products – currently ahead of schedule on their specialised Eastern Cape industrial gas plant – welcomed the arrival of Reatile Gaz. “The partnership will have far-reaching implications for gas users in the Eastern Cape. This mutually beneficial association allows us to offer a better service and full bouquet of products to Eastern Cape customers, ensuring security and reliability of supply across the board given the specialist focus in these areas,” said Air Products Managing Director, Mike Hellyar.
The Air Products-Reatile Gaz alliance formed in 2010 ensures the security of LPG supply allowing both companies to maintain their core focus on the manufacture, supply and distribution of industrial and process gases to the southern African region. Both companies adhere to strict safety measures as stipulated by local, American and European industry standards.
LPG is a fuel gas that is a combination of propane and butane. Normally LPG is combusted in air to heat a variety of materials. More common applications include soldering copper and the heating of single or batches of components.
The construction on location at the Air Products’ new air separation unit in Zone 3 of the Coega Industrial Development Zone is four weeks ahead of schedule, despite delays caused by the recent construction strike. Air Products South Africa Managing Director, Mike Hellyar, who paid a visit to the site today, said he was pleased with the progress and impressed with the efforts made by the contractors to gain ground on the time lost.
“The progress on site is impressive, and we are moving along swiftly to prepare the site for the arrival of some of the major components in quarter one 2014. We are confident that we will see the first molecule roll off the plant at the Coega Industrial Development Zone as scheduled during the fourth quarter of 2014,” said Hellyar. Air Products is making history as the first industrial gas company to erect an air separation unit in the Eastern Cape, ensuring that the region’s industry will have secure and reliable supply of specialised and industrial gases to ensure that the market receives the service difference it’s been waiting for.
Showing their satisfaction with the progress on site was Air Products Managing Director, Mike Hellyar, and Air Products Area Sales Manager of the Eastern Cape, Pierre Fourie.
A national deal between Air Products and APM Terminals – both tenants of the Coega Industrial Development Zone – brings into action the vision of the fourth utility with investors benefiting from the security of supply that Air Products’ air separation unit will bring to the region.
Air Products is providing APM Terminals with welding gases at its Johannesburg, Cape Town, Durban and Port Elizabeth sites. This new business partnership comes off the back of Air Products’ construction of a state-of-the-art air separation unit in Zone 3 of the Coega IDZ, while in Zone 1 APM Terminals is operating a global depot and port terminal to service the needs of shipping lines and cargo owners.
Air Products will commission their plant in the third quarter of 2014, taking up its role as the enabler that can offer the Coega IDZ’s manufacturing investor mix a secure supply of industrial gases, as well as for the entire region that has long been under-served.
This enabling role of Air Products within the Coega IDZ tenant mix is reinforced by the deal with APM Terminals, APM Terminals Depot Manager, Jason Govender, emphasises the company’s reliance on gas in their operations. “Our business is reliant on gas for all our operations and stable supply is critical,” explains Govender.
“We have worked with Air Products in Johannesburg for some time now. With their building of an Air Separation Unit in the Coega IDZ it means reduced costs and secure supply for us, and our customers in the Eastern Cape.”
Govender said the national deal was secured because of the impeccable service delivered by Air Products through an already established Johannesburg contract. “We were pleased with the service we were receiving in Johannesburg and this sparked our interest in partnering with Air Products on a national level. It also benefits us that we are both tenants of the Coega IDZ. When Air Products moves into their new plant next year we are looking forward to even more efficient service and convenience thanks to the close proximity to our site,” said Govender.
APM Terminals is a global depot and port terminal operating company that offers to shipping lines and cargo owners a full range of services for dry and reefer containers, which includes landside services such as repairs, handling, storage, monitoring and container conversion. They make use of industrial gas to cut the damaged parts of the containers.
“We chose Air Products for delivery on their promise to deliver service with a difference, and a thorough understanding of our business and our business needs. We are excited by the possibilities of a fruitful business partnership,” said Govender.
Air Products’ Port Elizabeth-based sales engineer, Justin Lavery, said they presented APM Terminals with an engineering solution for all of their welding and cutting applications that suited their business needs most optimally.
“We take pride in providing our clients with a specialised and convenient service and will continue providing our clients with quality gas products that are available on demand because that’s a steadfast credo we live by,” says Lavery.
Coega Development Corporation’s Marketing and Communications Manager, Ayanda Vilakazi, adds that this kind of business-to-business dealings is exactly the business environment that the CDC aims to create with the complementary cluster groups housed within the Coega IDZ.
“We are pleased to see that the investors in the Coega IDZ are working together to ensure that the supply chain linkages within the Coega IDZ are boosted – thereby stimulating the socio-economic growth of the Eastern Cape as a whole,” said Vilakazi.
Three schools in Nelson Mandela Bay are set to benefit from a generous donation by industrial gas company, Air Products. The three schools namely: Mngcunube Primary School in KwaNobuhle, Nomathamsanqa Primary School in Despatch and Seyisi Primary School in Kwazakhele require various assets which include; desks, chairs, carpets, sick beds, and kitchen utensils to better the learning conditions of the learners. Air Products Eastern Cape Area Sales Manager, Pierre Fourie, handed over the cheque for R41 600 over to Community Chest Chief Executive, Beulah Lumkwana, who will ensure the handover of the appreciated donation to the three schools.
“Through the Community Chest we came to know about the urgent needs of these schools, and we simply had to assist. As a company we believe that giving back to the communities in which we live and operate is essential,” said Fourie.
According to Lumkwana, the Community Chest is involved in these schools to assist in sourcing equipment that will ensure an environment that is conducive for learning. “Currently, these learners sit on the ground with no chairs or carpets, and those who prepare food for the children have no kitchen utensils to work with. We thank Air Products for their donation that will make a remarkable difference to the learning conditions of these learners,” said Lumkwana.
Site clearance has commenced on location at Air Products’ new air separation in Zone 3 of the Coega Industrial Development Zone in preparation for the construction phase. Construction will get underway as soon as site clearance is complete and it is now all systems go for the Eastern Cape’s first ever Air Separation Unit. Air Products will design and construct a high efficiency and reliability plant that produces liquid oxygen and nitrogen – as well as installing strategic product storage facilities for critical customers in the Eastern Cape. The completion and commissioning of the plant is planned for the third quarter of 2014. According to Air Products, the first phase R300-million investment will bring stability to the local gas sector and makes business sense given the industrial growth on track in the Eastern Cape.
A strategic alliance between gas industry leader, Air Products South Africa, and Broad-Based Black Economic Empowerment (B-BBEE) company Reatile Gaz, is yielding major results for the Eastern Cape by allowing Air Products to bring a full bouquet of products to the region through Reatile Gaz.
The alliance has had major implications for those in the South African gas industry and also for smaller black-owned entities, Air Products confirmed, saying that the milestones achieved were commendable, just over two years since the partnership was announced. The coalition has guaranteed the consistent supply of liquefied petroleum gas (LPG) to Southern Africa, and specifically the Eastern Cape, falling in line with the Department of Energy’s (DoE) objectives to expand the local LPG market while driving transformation of the industry.
Since the onset of the alliance, Reatile Gaz has embarked on downstream infrastructure development in Gauteng and the Western Cape, with plans for further development in the Eastern Cape aimed at empowering smaller black-owned entities in the local gas industry. “Air Products remains our anchor customer. Since our partnership with them our company’s growth has benefitted from their supplier development and empowerment strategy,” said Simphiwe Mehlomakulu, Chairman of Reatile Gaz.
“This growth, coupled with soaring local demand, has led to us purchasing Engen Petroleum’s LPG business. This has given us significant added presence in the Reef, Western Cape and KwaZulu-Natal. In the Eastern Cape specifically, the alliance with Air Products has allowed us to grow the LPG business significantly.It will also encourage the creation of sustainable jobs and business development in the region.”
Air Products South Africa formed the Reatile Gaz alliance in 2010 to ensure the security of supply of LPG while maintaining its core focus on manufacturing, supplying and distributing a wide variety of industrial and specialty gas products and chemicals to the Southern African region.
“For Air Products, Reatile guarantees important LPG supplies for our business,” says Mike Hellyar, Managing Director for Air Products South Africa. “Moreover, we are watching a B-BBEE partner grow substantially and have a knock-on effect on other emerging gas industry players.”
Both companies have to adhere to strict safety measures as stipulated by local, American and European industry standards.
“Where there is safety, there is also efficiency – and specialising means that our processes are streamlined and our products add strategic and operational value to our customers,” Mehlomakulu added.
LPG is a flammable mixture of hydrocarbon gases used as a fuel in heating applications. It is a low carbon-emitting hydrocarbon fuel, mixed from propane and butane. The DoE recommends LPG as a safer, cleaner, efficient, portable, environmentally benign and affordable thermal fuel for all households nationally. The department’s aim is to switch low income households from the use of coal, paraffin and biomass to LPG as the thermal fuel – ultimately, contributing to government’s green economy programme.
DOWNTIME on a production line can mean serious loss of revenue for an automotive parts manufacturing giant like Eberspächer, a major catalytic convertor manufacturer, supplying international markets.
When faced with the challenge of relocating their gas farm within their premises, they expected their gas supplier, Air Products, to facilitate a seamless process with no interruption to their production line. An extremely challenging transition, well executed by Air Products, Eberspächer confirmed. Eberspächer Port Elizabeth, based in Deal Party, is a large gas consumer and their gas requirements are comprised of mainly argon and smaller portions of oxygen and carbon dioxide – primarily used in the welding of catalytic converters.
The relocation of the gas farm was unforeseen but necessary, said Eberspächer Maintenance Manager, Steven Jansen. “We were clear that we needed the relocation to take place without any interruption to our production line. Air Products ensured our needs were understood and we agreed to the mitigation of any risks. This ensured our seamless supply remained uninterrupted.The installation was very well timed and planned,” said Jansen, adding that it was the type of high standard of service that Eberspächer expects of their suppliers, with the end-to-end relocation taking only 15 days.
Air Products, in particular, had to ensure they provided Eberspächer with security of supply, back-up service and technical expertise during the transition. “Air Products delivered 100% of our needs. They facilitated a unified process – which was naturally a big concern for us, since we cannot afford to lose out on production time,” said Jansen.
The security of gas supply is also a genuine area of concern for Jansen, who said their need for gas escalates as their production line gets busier. “The support we receive from Air Products is phenomenal, and they have managed to get it right, always ensuring we have an adequate supply of gas at all times.”
The growing concern surrounding gas supply in the industrial sector will soon diminish as Air Products nears completion on their Air Separation Unit in the Coega Industrial Development Zone (IDZ) with commissioning of the plant in the third quarter of 2014.
“It definitely works in our favour to know that the security of gas supply will be ensured with the new venture Air Products is bringing to the region. Coupled with the phenomenal service we receive from Air Products, we look forward to the expansion,” said Jansen. A technologically advanced system enables Air Products and Eberspächer to monitor the gas farm remotely, ensuring that any problems that arise are dealt with speedily and that gas levels are scrutinised to effectively deliver supplies.
Air Products Area Sales Manager, Pierre Fourie, credits the success of the gas farm relocation to a dedicated Air Products Eastern Cape team who worked tirelessly and carefully to ensure the process posed no disruption to the client’s operations. “Eberspächer has been our client for almost 20 years and we believe that winning recipes keep customers happy. We show our customers true service that delivers the difference,” explained Fourie.
“Air Products makes a point of understanding our customer’s businesses in order to refine the service we deliver to them. Not all businesses are the same and the service requirement cannot be industrialised fully. As a national company, our collective approach and the manner in which we engage with our customer speaks to that difference,” said Fourie.