The industrial gases market is more hotly contested than ever before. To be able to respond even better to changing market conditions and customer requirements, we must continue to grow worldwide. The basis for this is provided through the investment projects implemented in 2017. More information on investment is provided by the Messer Group’s Group Management Report 2017.
Economy and business
Reliable Product Supply Through Investment
China: Messer continues to invest in Hunan, China
In May 2017, Messer signed an agreement with the Changsha Hi-Tech Zone in the South China province of Changsha for the construction of a production plant for air gases. The plant will be built directly next to the existing bottling plant for cylinder gases and will go into operation in the autumn of this year. It will produce 520 tonnes of liquid air gases per day. Messer is investing around 33 million euros in the production of oxygen, nitrogen, argon and other technical gases for production plants in the Changsha Hi-Tech Zone and surrounding areas. Messer is a pioneer in the market for industrial gases in Hunan and has already invested in a total of nine air separation units with a total capacity of more than 200,000 cubic metres of oxygen and nitrogen per hour. This makes Messer the largest supplier in this important regional market.
China: Messer becomes the largest supplier of CO2
In March 2017, Messer started operation of the world’s largest of its CO2 recovery plants in Nanjing, China, making Messer the leading provider of recycled CO2 in China. The system has a capacity of 150 thousand tonnes per year and meets the highest standards of quality and energy efficiency. The gas can be used in the food industry, such as carbon dioxide for beverages. Alongside Nanjing, in 2014 Messer commissioned a plant in Yunnan, and another in Sichuan in 2015. Messer now recovers a total of 300 thousand tonnes of CO2 per year from industrial processes in China.
Many industrial processes give off CO2. Recovery plants extract the gas before it escapes, thereafter cleaning it in several stages to make it ready for reuse. Customers of the expanding food and beverage industry, chemicals and agriculture and environmental engineering will be served by the plant in Nanjing.
In addition to the CO2 recovery plant, Messer is commissioning a new technology centre for gas application technologies in Nanjing. Here, with the support and expertise of our international experts, application technologies will develop tailor-made solutions for the Chinese market.
China: Largest air separator in Messer history
Guided by its main strategy of business diversification, in China Messer is focusing on developing its business for bulk, cylinder and special gases. In Dong Guan, in the southern Chinese province of Guangdong, Messer is investing in the largest liquid production plant for air gases that Messer has ever built. As a result, from 2020, we can supply the entire Pearl River Delta – a major economic centre in southern China – with industrial gases at competitive conditions. Parallel to the expansion of this sales area, we will double our capacities for liquefied gases at the Shunde location in Guangdong by investing in a second new air separation unit from 2019.
China: Development in the Special Gases area
The development of the Special Gases area in China is promising. Ever since the first plant for electronic gases went into operation in Suzhou in 2014, the revenue generated by N2O and the image of Messer have developed very well. As the limits of production capacity have since been reached, and demand for the electronic gas N2O continues to climb, in late 2017 it was decided that the existing N2O plant would be extended. Above and beyond this, another N2O plant is set to open in the western Chinese province of Sichuan, which will make Messer one of the largest suppliers of N2O in China by the end of 2019.
China: First automated filling unit and new filling plant
The first automated filling unit installed by Messer will be commissioned in Changsha in the first half of 2018. This is a reference project for Messer and sets standards for further filling plants in China. We expect this to result in significant improvements in terms of the efficiency and safety of cylinder-gas filling. In addition, in January 2018, a new cylinder-gas filling facility was opened in Sanshui in Guangdong province. This location will also assume the role of Messer’s centre for special gases in southern China.
Vietnam: Messer is building three new plants for the production of industrial gases
Messer and Hoa Phat Steel, the largest steel producer in Vietnam, signed a contract in Hanoi on 17 April 2017 for the construction of two production plants for industrial gases. The agreement carries a term of 25 years. Messer will supply the steelworks with the air gases oxygen, nitrogen and argon via pipeline. In November 2018, the first of the two plants is due to be commissioned in the Dung Quat Economic Zone in south-central Vietnam. The total capacity will be 80,000 normal cubic metres of oxygen and 160,000 normal cubic metres of nitrogen per hour, equating to about five and ten tankers, respectively. It will therefore be the biggest plant for the production of industrial gases in Vietnam. Messer is investing a total of over 90 million US dollars.
In addition to supplying the steelworks, Messer is also supplying the local market, such as the shipbuilding industry and automotive suppliers, with gases in liquid form. Messer has had a cooperation arrangement with the Hoa Phat Group since 2007. At that time, Messer invested 20 million dollars for construction of an air separation plant to meet the gas requirement of the first integrated steel plant of Hoa Phat Steel. The second plant was commissioned in 2012 and increased Messer’s production capacity in Vietnam by around 150%. Messer commissioned its third air separation plant in Vietnam in 2016.
With a capacity of 27,000 normal cubic metres of oxygen and 54,000 normal cubic metres of nitrogen per hour, this was the largest industrial gas plant in the north of Vietnam. In late 2017, Messer and Hoa Phat agreed to build another plant that will complement the three existing plants in early 2019. This will increase the current production capacity at the location in Hai Duong by an additional 50%. These additional amounts are intended not only for the supply of the steel plant, but will also ensure Messer’s position as a leading provider of liquefied gases in the north of Vietnam.
Malaysia: New joint venture
Messer and the Malaysian company Universal Industrial Gases (UIG) signed a joint venture agreement in 2017. Messer owns more than 60% of the shares. UIG was founded in 2009. In October 2016, the company commissioned its second bottling plant for gases in cylinders in the province of Selangor. We anticipate high growth in the ASEAN countries over the long term. The joint venture UIG invests in new gas cylinders and further optimisation of safety and quality assurance. In addition, the product portfolio is being expanded. These measures aim to ensure competitiveness in the growing market in Malaysia. The two UIG sites – at Semenyih, south of Kuala Lumpur in the province of Selangor, and at Senai, in the southern province of Johor Bahru – employ a total of 50 staff. Both plants are cylinder filling plants for industrial gases. In Senai, UIG also operates an acetylene plant. Messer also managed secure entry into other, fast-growing ASEAN countries such as Thailand and Indonesia, where Messer distributorships have already been established. We manage business development from Singapore and are creating a contiguous network of business activities extending from Indonesia to Singapore, Malaysia and Thailand.
Bulgaria: Own CO2 production in Katunitza
During the fourth quarter of 2017, Messer Bulgaria commissioned a plant for the production of carbon dioxide in Katunitza, near Plovdiv. The raw gas required for CO2 production is generated during ethanol production. The good geographical location of our new plant in the centre of Bulgaria optimises transport costs and permits faster delivery to our customers.
Bosnia-Herzegovina: New CO2 plant
Messer BH Gas built a second CO2 unit in the plant in Sockvac in September 2017. The aim of this development of existing capacities is to promote further expansion in the market. Both plants are certified according to HACCP and ISO/FSSC 22000 and have received approvals from Coca-Cola and PepsiCo. In Banja Luka, a new distribution centre for cylinder gases – one of the most modern in Bosnia – has been built to provide customers with an improved comprehensive supply. In Sarajevo, we have started offering modern services covering every aspect of our cylinder gases.
Poland: Partial acquisition of a gas-trading company
Messer has acquired portions of the owner-operated company Roman Kowalski TransMat-Gaz (“TMG”) with headquarters in Warsaw, Poland. The business activities of TMG, which generated revenue of some PLN 8.5 million in 2016 (approximately 2.0 million euros), centre around the sale of liquid oxygen, liquid nitrogen, liquid argon and hydrogen in battery-operated vehicles with a regional focus on the greater Warsaw area.
Hungary: Strategic growth
Messer Hungarogäz operates its own production facility on the premises of MOL Petrolkemia in Tiszaüjväros. An air separation unit has now been added to the existing on-site facilities. This was done to meet the increased demand for gases from Hungarian customers and to improve operational reliability. The new unit has been producing oxygen and nitrogen since July 2017. This investment represents a significant step towards achieving our strategic objectives in that it ensures our independence in terms of production and supply capacities, increases our market share and boosts our competitiveness.
Hungary: Expansion of the Ölbő unit
Since 1995, Messer Széndioxid has operated a CO2 plant in Ölbo, in the west of Hungary, where carbon dioxide is recleaned. The carbon dioxide field there is the second largest in Hungary. Due to high demand, in 2017 we managed to double our production capacity by expanding the CO2 site. A renewed increase in demand for liquefied gas has now required investment in a third CO2 production plant, which will go into operation in 2018: this will actually triple our production volumes. Our high-purity CO2 meets the highest quality requirements of the food and beverage industry.
Slovenia: First Messer air separator
Messer Slovenija built the first air separation unit of its own in Slovenia in 2017, with Messer investing some 17 million euros.
It is located in the Trata industrial park in Skofja Loka and thus in the immediate vicinity of the production plant operated by insulation manufacturer Knauf, which we supply with oxygen from our new plant via pipeline. With the new production facility, we are intensifying our business relationships and at the same time strengthening our position on the Slovenian market, because we can guarantee greater security of supply and fast delivery times.