The Eastern Cape’s Coega Industrial Development Zone (IDZ) is one of several industrial regions in South Africa to benefit from global industrial gas company Air Products South Africa’s strategy of long-term capital investment.

A region which has long been underserved when it comes to reliable gas supply, the Eastern Cape will, by the fourth quarter of 2014, have its own air separation unit (ASU), the first of its kind in the province.

“There is no local industrial gas supply in this area and cryo- genic 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. “Therefore, 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, ” explains Air Products supply chain GM Seelan Gounden.

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) on December 5, last year.

“We are pleased to be able to be a part of the growth and development of the region by providing the long-needed security of supply and value- added service.”

Coega IDZ head of marketing and communications Ayanda Vilakazi adds that Air Products’ investment in Coega not only shows a commitment to socio-economic development in the region, but 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 provide not only security of gas supply to the region, benefiting the many industries here, but also 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,” Vilakazi says.

The Coega IDZ has become one of the most successful IDZs in South Africa. Its plug-and-play model offers investors many advantages, such as a high standard of infrastructure and proximity to the Port of Ngqura.

Further, investment in the IDZ stimulates job creation, the 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.

Air Products is backed by the substantial investment in research and development by its parent company in the US. Therefore, the new facility in Coega will feature the latest available air separation technology, which is designed both for maximum product output capacity and energy efficiency.

“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,” says Air Products Eastern Cape area sales manager Pierre Fourie.

Vilakazi points out that the new ASU, which costs R300-million, represents a major vote of confidence in the future of the Eastern Cape. He adds that its strategic importance to local business, communities and industry cannot be underestimated and that this investment is a swift and bold response to a clear market need.

Fourie says Air Products views the future of the region as positive and, with the steady growth of the Coega IDZ, there is huge potential for the company 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 ongoing supply of cryogenic gases for their operations.

“In some respects, the Eastern Cape has been largely overlooked when it comes to gas supply and service. “With the current levels of growth in industrial activity and investment in the province, it has become increasingly urgent to address this shortcoming. The new facility will not only assist industries, such as the automotive industry, to maintain and secure their current operations effectively, but will also provide a platform for future growth and expansion,” Vilakazi says.

The new ASU is the latest of numerous 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.

Gounden says capital investments of this scale and nature significantly impact on a company’s long-term performance, its future viability and sustainability, and its service levels.

He notes that this is important because sustainable security of supply and reliable customer service are the cornerstones of Air Products’ business.