Coega secures R300m Afrox investment

5 November 2013

Industrial gas company Afrox on Friday signed a land lease agreement with the Coega Development Corporation for the construction of a R300-million air separation unit at the Coega industrial development zone in the Eastern Cape.

The 150-ton per day unit will produce a variety of industrial gases for the automotive, food processing and medical sectors, and will give Afrox direct access to customers throughout the province.

Linde Engineering, a subsidiary of the German Linde Group, of which Afrox is a member, will be constructing the plant. It is expected to be fully operational in the first quarter of 2015.

The Coega Development Corporation (CDC) said on Friday that this was the first public announcement of a secured investor in this financial year and that other deals were in the pipeline.

‘Seeing the potential’

“Clearly, investors are closely watching the developments at the Coega Industrial Development Zone and seeing the potential in the Eastern Cape,” CDC business development executive Christopher Mashigo said in a statement. “This is encouraging for the CDC, and we applaud Afrox’s savvy investment which will enable supply chain development and secure further industrial prowess for the province, while creating jobs across industry.

“Afrox’s air separation unit is important to us not only as a new investor but as an enabler. It enhances our value proposition and also provides a foundation for Afrox’s own growth,” Mashigo said.

Afrox managing director Brett Kimber said it made strategic sense to build a plant near Port Elizabeth, saying “this is where the customers are”. Afrox has an established customer base in the Eastern Cape, servicing the automotive and health services in particular, but the company also indicated that it is focused on broadening its industry reach.

Kimber told Business Day that the new plant would be 15% to 20% more energy efficient than its existing plants, and would save on local distribution costs.

Nelson Mandela Bay Business Chamber chief executive, Kevin Hustler, endorsed the new plant on behalf of the business community.

“Afrox will have a critical role to play in the next 20 years as we diversify [the industrial base]. Something we don’t realise is how far and wide gas goes. It touches so many sectors of the market and it is wonderful to see the nature of such investment in our city,” said Hustler.

SAinfo reporter