Praxair plans foray into specialty gases in India

Praxair India Private Limited, a part of the US-based $8 billion Praxair Inc, the third largest supplier of industrial gases in the world, is foraying into specialty gases in India.

The company, which at present manufactures only oxygen, nitrogen and argon, is setting up a plant at Sriperumbudur in Tamil Nadu at an investment of Rs 20 crore.

According to its managing director John Panikar, Praxair India aims to cater to the growing demand for speciality gases from its customers in the automotive, steel, petrochemicals and healthcare (hospitals) sectors.

At present, India imports a substantial quantity of its requirements. Inox Air Products is the only other manufacturer in India at present in addition to a host of small players whose quality is not up to international standards.

Praxair India, which currently manufactures some of these gases like helium at Murbad in Maharashtra, will commission its new plant in Sriperumbudur in March 2007.

It plans to fill these gases in cylinders of 20-50 litres and supply to customers. Some of its customers include Tata BP Solar, Tata Motors, Bosch, Mico Bosch, Sandoz, Triveni Glass and others. Globally, Praxair supplies specialty gases to General Motors, Ford, Toyota and other big automotive players.

"We will target petroleum refineries, power plants and automotive component manufacturers for supply of these gases," Panikar told Business Standard.

John said the company would begin manufacture of a full line of calibration gases, emission gas mixtures for automotive and other industrial users, SiH4 mixes for glass and solar cell industry, lighting mixes, certified reference materials for labs such as SF6 (sulphur hexafluoride), HCL (hydrogen chloride gas), NH3 (high purity ammonia), specialised Laser gas mixes.

It also aims to manufacture ultra high purity N2, O2, Argon and helium 6.0 grade. This is used as carrier gases in all labels. Some of these specialty gases are used in MRI machines, halogen bulbs in passenger cars, optical fibre among others.

The specialty gases business currently forms only 2 per cent of the company's turnover (Praxair India reported $120 million in 2005) and is likely to cross 5 per cent in the next three years, John said, adding that the company was aiming at a turnover of $15 million.

He said that the company aimed to increase its share in the Indian market from the present 10 per cent to 30 per cent.

"We have already emerged as the number one maker of industrial gases in India in the last 8 years and we are growing at 18-20 per cent annually as against an industry growth of about 15 per cent. With our foray into speciality gases, we aim to become the preferred supplier of these gases in the next three years," Panikar said.

The market size for specialty gases is expected to be around Rs 100 crore and is growing at 20-30 per cent annually.

He said the organised industrial gas industry was estimated at $350-360 million in the country.

While Praxair is leading the market, BOC India Ltd 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, expects to register $140 million in 2006, an increase of 16 per cent, Panikar said.