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Air Products Coega Investment Could Top R300 Million

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I am tempted to and will say; “We have come a long way, Baby!”

After many years of inertia and slow to no growth the Coega IDZ is reaching a critical mass large enough to demonstrate to Port Elizabeth and the world that the long term plan is bearing fruit as yet another milestone investment between the Coega Development Corporation and Air Products was signed this morning.

The 30 year lease agreement will see the establishment of a state-of-the-art air separation unit (ASU) – the first of its kind in the province and the first such stand alone processing plant for Air Products nationally. The plant, which is scheduled to come on line by the fourth quarter of 2014, represents an investment that could top R300 million.

The investment in this first-of-its-kind facility was formalised in a lease-signing event between Air Products and the Coega Development Corporation (CDC) this morning.

Seelan Gounden, General Manger – Supply Chain at Air Products, explained the reasons behind the company’s latest investment; “Currently there is no local industrial gas supply in this area, and cryogenic gases have to be procured elsewhere. This situation compromises the service delivery to our existing customers who have to depend on product being trucked over vast distances. Thus, we identified the Eastern Cape as a key priority investment destination, with a clear need for a new air separation facility dedicated to servicing the region.”

“We chose the Coega IDZ after careful market analysis. We are pleased to be able to be a part of the growth and development of the region, through providing a long-needed security of supply and value-added service.”

Ayanda Vilakazi, Head of Marketing and Communications at the Coega IDZ adds: “Air Products’ investment in Coega not only shows a commitment to socio-economic development in the region, but it also illustrates a growing investor confidence in the IDZ. The CDC’s investment base is steadily increasing, and Air Products will become one of the flagship investors in the IDZ through this investment.”

“The viability of the new ASU is indisputable. It will mean not only security of gas supply to the region, benefiting the many industries here, but it also means job security for other investors, jobs along the value chain and scope for training and human resource development, as well as enhanced Corporate Social Investment initiatives.”

“Looking after our Eastern Cape customers means keeping an eye on the future, ensuring that we can offer maximum efficiency in product output at a reasonable cost of production. An important part of this offering is a reduction in energy consumption, which has become an imperative for us,” said Pierre Fourie, Area Sales Manager – Eastern Cape.

“Air Products views the future of the region as extremely positive, and with the steady growth of the Coega IDZ there is huge potential for us to be able to diversify supply to a broader market. The new facility will create a much-needed platform for the growth of local industries that require an on-going supply of cryogenic gases for their operations.” continued Fourie.

The new ASU, which will be up and running by the fourth quarter in 2014, is the latest in a number of long-term capital investments which Air Products has made recently, all of which point to the company’s long-term focus on its future sustainability and performance.

Says Gounden; “Capital investments of this scale and nature significantly impact a company’s long-term performance, its future viability and sustainability, and its service levels. This is important because sustainable security of supply and reliable customer service is a cornerstone of our business.”

“It was necessary for us to expand our output capacity in order to accommodate and provide for our customers’ future growth plans,” Gounden says. “This is 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,” he concluded.

In his remarks, Chris Mashigo, Executive Manager – Business Development Coega Development Corporation refered to the ‘plug and play’ model of the Coega IDZ offering investors many advantages, such as the high standard of infrastructure and proximity to the Port of Ngqura. Moreover, investment in the IDZ stimulates job creation, strengthening of supply chains and backward and forward linkages, and contributes towards the critical mass needed to position the IDZ as a world economic zone leader and South African investment destination of choice.

The new Air Products facility in Coega will feature the latest available air separation technology, which is designed both for maximum product output capacity and energy efficiency.

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Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE
Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.