Industrial gases potential that India holds

The role of industrial gases is constantly being revised to make various manufacturing processes sustainable and economical. The Indian industrial market is also picking up pace with its global counterparts and is exploring the dynamics that this market offers.

By Debarati Das

The incessant expansion of various businesses coupled with the need for better, efficient and sustainable processes has ensured the growth of industrial gases manifolds. This industry is expected to become an $80.9 billion market by 2020, according to BCC research.

Further, improving economies, a rampant increase in energy demands, various climate control initiatives and a boom in healthcare both in developing and developed regions has given the much-needed impetus for exploring the usage of industrial gases beyond the tried and tested grounds.

Asia has been at the centre of this growth spur with rapid infrastructure expansion which has surged the demand for industrial gases. The rising demand for alternate energy sources, which will be met by large-scale gasification plants and gas-to-liquids, coal-to-liquids and coal-to-chemicals plants, will require enormous quantities of oxygen. Cleaner fuels for transportation sector will call for increased hydrogen production while oil recovery activities will boost the demand for carbon dioxide usage.

Amidst this boom which is surging the industry towards it's $80.9 billion marks, India has been carving its own niche. The Indian market, according to TechSci Research report, is projected to cross $2 billion by 2020. This growth will be on the pillars of the demand from various ends user industries like metallurgy and petrochemicals. Industrial gases also find its use in various other end user industries including electronics, chemical, fabrication, energy and food & beverage.

Various government policies favouring the manufacturing sector and encouraging the “Make in India” tag will further facilitate the growth of this industry. Numerous upcoming steel projects are integrating industrial gas production units to address the bulk requirements for industrial gases. This has given further impetus to the industrial gases market in the country.

Among the various industrial gases in the market, Oxygen, Nitrogen and Argon dominate the Indian industry with oxygen taking the lead owing to its use in a wide range of applications in the metallurgy industry, such as welding, fabrication and other processes.

The major demand for these gases is expected to arise from the eastern region in the future with various metallurgical projects in the pipeline. Also, major steel and refineries sector which are concentrated in an eastern and southern part of the country is also witnessing a growth that has a positive impact on the industrial market as well.

The market is also witnessing a growing competition between global and local players in India such as Inox Air Products, Praxair and Linde. This has also lead to a significant price reduction of industrial gases in India. 

Opportunities offered

Undoubtedly, industrial gas is required in every segment of the manufacturing sector. Apart from their use in oil & gas, petrochemicals, chemicals, power, mining, steelmaking, metals, environmental protection, medicine, pharmaceuticals and biotechnology, these gases are also increasingly being used globally in food, water, fertilisers, nuclear power, electronics and aerospace.  

In India, various upcoming industrial projects working towards “smart cities” will be a significant game changer for the industrial gases market. Apart from this, the knowledge of its application is expanding its outreach. In the medical sector, which is already witnessing a huge expansion due to government’s push towards strengthening medical service in the rural sector, the demand for medical gases will witness a major boost.

The usage of industrial gases is also digressing towards more non-traditional areas like space research, food preservation and distribution, agro-processing etc.

Challenges Faced

No growth is clear of challenges. The industrial gases industry in India also faces various predicaments. Some of them being:

Electricity availability: Electricity is one of the primary requirements. However, the quality and cost of power is a major challenge in the production chain.

Distributional Logistics: The distribution cost, especially for cylinder gases is very high and to cover the length and breadth of the county only heighten the predicament. The logistics of these gases also require a heightened level of safety.

Skilled manpower: There is a huge scarcity of skilled manpower to handle these gases with not many established centres for providing skills.

Growth Check: The growth and profitability of industrial gases largely depend on the growth of the end user industry.

Competition: Apart from the healthy competition brewing between local and global player, the vigorous competition amongst small manufacturers along with the issue of overcapacity, lack of funding for smaller players and minimal technology up-gradation are some issue that the industry deals with.

Future Scenario 

The use of industrial gases will only grow in the future effectively in all areas making process eco-friendly and effective.

With the depleting level of fossil fuel and the urgent need for energy conservation and efficient usage of existing fuel, oxygen will play a dominant role in processes like steel production. Hydrogen and hybrid hydrogen will emerge as alternative clean fuels in the future.

Given the thrust towards having a cleaner environment and complying with EPA norms, there will be a stress on the use of industrial gases such as oxygen in processes like effluent treatment, or hydrogen for removal of sulphur from sour crude oil.

The growing food industry is also expected to explore the benefits of industrial gases more in the future. Nitrogen and carbon dioxide will play a major role in food preservation or in the manufacturing of export quality frozen foods. Experts suggest that the usage of nitrogen and argon is expected to surpass oxygen in the near future of Indian industrial gases market.

India is undoubtedly in one of its best phases of industrialisation and this burgeoning economy is receiving its much needed additional boost from the “Make in India” campaign which is striving to make the manufacturing industry self-reliant. This attempt will in all ways give impetus to the industry to explore the opportunities that industrial gases have to offer.

© Chemical Today Magazine

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