Praxair lines up $210 mn expansion

Bangalore-based Praxair India, a part of global major Praxair Inc, has drawn up a massive expansion plan in the country, for which it will invest $210 million in the next three years.

The $8 billion US company Praxair Inc "� the third-largest supplier of industrial gas in the world "� will fund the entire investment.

Praxair India, which started its India operations in 1996, has already emerged the leading supplier of industrial gas in the country with an annual capacity of over 7,000 tonne per day (tpd).

According to its Managing Director John Panikar, Praxair India is bullish on the booming petrochemicals and steel sectors in the country. Praxair aims to invest $70 million every year to increase its gas manufacturing capacity.

The company, which recently bagged an order from Durgapur Steel Plant (DSP) to set up a 700 tpd oxygen plant, is hoping to make its debut in the north Indian market shortly.

Of the proposed $210 million investment, the company will invest $40 million to set up a 900 tpd oxygen-cum-nitrogen plant for DSP, $65 million for a 1,800 tpd plant for Tata Steel, which is expanding its steel making capacity at Jamshedpur, and $40 million for yet another a 700 tpd plant for Steel Authority of India's facility at Rourkela.

"We have also bid for the $35 million order from Indian Oil Corporation, which is setting up a naphtha cracker plant at Panipat. The oil major needs 700 tonne oxygen and 300 tonne nitrogen a day. If awarded with the order, we propose to install an oxygen plant of 800-1,000 tpd capacity. IndianOil is opening the price bids by in October," Panikar said.

The MD said Praxair was building its third plant "� a 400 tpd oxygen plant "� at Hospet for Hospet Steels, a joint venture between Mukund Steel and Bharat Forge, which will go onstream in November this year. It is investing Rs 100 crore for the plant.

Panikar said Praxair had also concluded a deal with Owens Corning recently for setting up a 200 tpd oxygen plan for the latter's new facility at Taloja near Mumbai. Owens Corning, a joint venture between Owens and Corning, proposes to manufacture automotive fibre glass for the passenger car sector.

"We do not have fund constraints as we are growing rapidly in the Indian market. We have already emerged the number one maker of industrial gas in India in about eight years and currently growing at 18-20 per cent a year against industry growth of about 15 per cent," he said.

Panikar said the organised industrial gas industry was estimated to be $350-360 million in the country. While Praxair India is leading the market, BOC India is the second-largest gas maker at $110-120 million, followed by Inox at $60-70 million. The market is expected to touch $1 billion by year 2010.

Praxair India, which reported $120 million revenues in 2005, is expecting to post 16 per cent growth at $140 million in 2006, he said.