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"BOC policy - We do not want to harm the people or the environment"
With recent refinery expansions and steel capacity enhancements, the demand-supply situation of industrial gases in India needs to be in sync with the dynamic and volatile market conditions. As BOC India continues its journey with persistence to stand as an undisputed leader in the industrial and medical gases segment since its inception in 1935, Chemical Engineering World explores the future growth strategies of the company through an interview with Srikumar Menon, Managing Director of BOC India Ltd.

How has demand-supply situation of industrial gases changed over the years globally and in India?
Demand has increased exponentially in India in the last three years time due to major steel capacity additions and refinery expansions. Merchant segment gas demand has also increased in automobile, fabrication and healthcare at a faster rate than GDP. Globally, other than China, there is only marginal growth/decline in other countries across the world.

Give us a low down on the presence of BOC in the Indian market.
BOC India has been a leader in the industrial and medical gases business in India since "BOC policy - We do not want to harm the people or the environment" With recent refinery expansions and steel capacity enhancements, the demand-supply situation of industrial gases in India needs to be in sync with the dynamic and volatile market conditions. As BOC India continues its journey with persistence to stand as an undisputed leader in the industrial and medical gases segment since its inception in 1935, Chemical Engineering World explores the future growth strategies of the company through an interview with Srikumar Menon, Managing Director of BOC India Ltd.1935. We started operations in Eastern India in 1935 as the Indian Oxygen and Acetylene Company. We have production facilities across the country, including one of Asia’s largest air separation units currently under construction, warehouses, depots and dealers and the largest distribution fleet in the industry.

The latest feather in our cap is our state-of-the-art 221 tonnes per day plant in Selaqui, Dehradun. This plant helps us to sustain our world-class service levels to our customers in the northern part of India and offers potential customers a chance to experience the vast technical expertise and service capabilities that come along when associated with our parent company – The Linde Group. We have over 30 per cent market share of the industrial and healthcare gases market in India.

How has the industrial gas industry been affected due to technical changes in different user industries; and how has BOC India kept pace with this?
New steel production technologies pushed up oxygen demand. Steel treatment and forming like rolling mills presents opportunities for the specialised solutions form BOC India. There has been a steep change in welding process from manual metal arc to gas metal arc welding for higher productivity and quality. BOC India has supported this shift by introducing high-end shielding gases like argoshield, CORGON 18 etc. for delivering superior weld quality. With increase in super specialty hospitals and shifting focus on quality healthcare and non-invasive diagnostics, Magnetic Resonance Imaging (MRI) machines have become an absolute necessity in hospitals. Apart from oxygen for patients, gases like helium used in MRI machines are supplied by BOCI.

May we have your comments on the use of industrial gases to transform production methodologies across various industry verticals?
Our application technology team has been able to provide solutions to customers resulting in more efficient furnaces, lower fuel consumption and cleaner emissions. Huge volumes of nitrogen and CO2 are also used in petrochemical industry for Enhanced Oil Recovery (EOR).

Now that India is becoming a manufacturing hub to most of the industries, which industries are expected to drive the demand of these gases?
We believe that a large chunk of the growth of industrial gases would be propelled by the booming metal sector, refinery and petrochemical projects announced for the coming years. The Indian automobile industry that currently exports to over 90 countries has also made its mark on the world. With auto majors like Ford, Renault, Peugeot etc. setting up new plants in India and many expansion plans, demand for industrial gas is bound to increase. Our application technology team is also helping customers unlock value in their existing processes by providing relevant solutions.

What are your views on the competition in Indian market and how is your company positioned to handle the competition? The gas industry in India is highly fragmented with all four major multinationals, regional players and refillers grappling for market share. Our over 75 years of accumulated experience serving the Indian industry, a basket of over 20,000 industrial, medical and specialty gases and gas mixtures, widest nation-wide distribution coverage, dedicated multi-disciplinary project engineering and execution team and our access to the latest cutting edge technology give us a fillip over competition. The presence of competition helps us to continuously rethink and improve our products, services and quality for meeting the customer needs better. However, we are confident that our customer-centric approach and adherence to world-class safety standards will help us maintain the leadership position we enjoy.

What are the main challenges that manufacturers of industrial gases face in India in terms of production and distribution? What is the mode of distribution followed for majority of users in India?
The challenges faced by the industrial gas fraternity are mainly on the safe production and transport of gases cooled to liquid at cryogenic temperatures and stored at high pressures across long distances on Indian road conditions. High-pressure cylinders at customer sites are also hazardous if used by untrained personnel. Another major challenge directly impacting the production is the unavailability of uninterrupted quality power in many states.

A major chunk of our volume is through direct pipeline to steel customers like Tata, Jindal, Visa etc and other on-site supply schemes. Beyond this we also supply to high-volume customers in bulk liquid tankers and to lower-volume customers through cylinders. Advanced electronic technology manufacturers are also absent in India that are major consumption areas of industrial and specialty gas mixtures. We are not spared from rising input cost arising out of power and transport fuel. Power deficits impact us as our operations are power intensive and needs seamless and consistent power quality.

Which is the supporting industry that gives impetus to the growth of industrial gases in India?
The high volume consumer of industrial gases in the country is definitely the metal, automobile, infrastructure and glass sector. Growth in these sectors automatically translates into increased demand for gases. Availability of cheap and reliable power is also necessary for providing the necessary momentum for growth.

What are the major challenges on the operations, safety, environment and technology front and how does your organisation address these issues?
The major challenges in our industry revolve around the handling of gases that are liquefied at cryogenic temperatures and high pressures and their transport to various locations.

Our safety policy states 'We do not want to harm the people or the environment' and this is followed in letter and spirit by all employees of our company and helps us address risks in the business. We have a centralised National Scheduling Centre and a Fleet Control Room which tracks all our tankers on the road through the Vehicle Tracking System fitted on each truck.

May we have your comment on the R&D efforts undertaken by BOC India?
We have a full-fledged application technology sales team offering value added products and services to our customers. We are investing in a state-of-the-art application technology centre in West India that will get operational in 2012. BOCI leverages on the research and development capabilities of its parent company, The Linde Group.

What is your future growth strategy?
We are focusing on our major ongoing projects in Jamshedpur, Kalinganagar, and Rourkela in the east and Taloja in the west where we have invested over Rs. 1000 crores worth of fixed assets.

Together, these will more than double our existing production capacity in the next year. We also plan to venture into new territories/segments and strengthen our presence in existing markets with emphasis on application technology.