Roy Cokayne
Part of a R1.5 billion capital investment programme over three years by listed African Oxygen (Afrox) has become a reality with the official opening of a new R200 million air separation unit at the company’s Pretoria West site.
Brett Kimber, the managing director of Afrox, said yesterday that the three-year capital investment programme was aimed at boosting customer service levels and supporting the company’s growth strategy in South Africa and emerging markets of sub-Saharan Africa.
Kimber said the majority of the R1.5bn was being invested in South Africa because that was where the company had to play a “bit of catch-up”, but emphasised that Afrox was unlikely to stop investing.
He added that Afrox’s strategy for emerging countries in Africa would involve having priority countries apart from specific investments related to mega projects that would probably each involve an investment of R500m.
The majority of the balance of the R1.5bn investment over the next three years is to be spent on a R500m “super-site campus” in Durban, which is the single-biggest project that Afrox has ever undertaken, and more than R250m on a stand-alone air separation unit facility in Port Elizabeth.
Afrox’s new Durban campus will include an industrial and medical gases filling plant, acetylene production plant and an upgraded liquid petroleum gas filling facility, host customer engineering support services and an Afrox gas and gear retail outlet.
The site will also allow for future investment in an air separation unit.
Kimber said the company had already broken ground on the Durban campus project and it would probably come on stream in 2015.
Its facility in Port Elizabeth, which is aimed at improving its service to customers in the automotive industry, food and beverage market, hospitality industry and the medical sector, is scheduled to come on stream in the first quarter of 2015.
Kimber said Afrox used to get products from PetroSA for its Port Elizabeth customers, but supplies were unreliable, costs were increasing and it did not make sense in the long term with this customer base about 400km way. This would mean the challenges currently posed by Afrox having to truck product to customers over long distances by road would soon be a thing of the past.
Kimber added that Afrox had manufacturing plants in Pietermaritzburg in Hulamin and at Mondi in Richards Bay, but did not have a manufacturing facility in Durban and filled cylinders at a site at Maiden Wharf.
However, Kimber said Afrox was asked to move from the Maiden Wharf site for planned expansions to the harbour and it had enough land on its new site for its cylinder refilling and additional facilities.
The newly commissioned air separation unit in Pretoria replaces an existing plant that was originally built to supply Iscor’s then new Corex iron-ore plant in 1986. The new and more energy-efficient unit will produce high-purity oxygen, nitrogen and argon and service the merchant and medical markets locally and in other emerging African countries.
The engineering division of Afrox’s parent company, the gases, engineering and technology multinational Linde Group, was responsible for the design, supply and building of the new plant. It is remotely controlled from a global operations facility in the UK to ensure optimal output and quality products.
Shares gained 1.13 percent to R22.30 on the JSE yesterday.