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.