Economy and business

Reliable Product Supply Through Investment

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.

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.

Messer is a pioneer in the market for industrial gases in Hunan and has already invested in nine air separation units.

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.

Prepared CO2 is stored in special tanks. Customers are the food, beverage and chemical industries or agriculture.

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.

Quality assurance for our products, processes and infrastructure

Poland: Introduction of BABEL

Messer Polska introduced the BABEL cylinder-tracking system in December 2017. Here, each rental container is provided with an individual bar code that is read into the system with every movement of a cylinder, thus permitting real-time tracking of the container. This is how we are making complex logistical processes more transparent and reliable.

Switzerland: New office building

Messer Schweiz continues its focus on the location in Lenzburg. A new office building with 16 new offices for 27 employees was completed in December 2017. The building also houses three conference rooms and a recreation room.

Netherlands: Location in Moerdijk getting in shape.

Our filling plant for industrial gases in Moerdijk was built in 1992 by the former Messer Griesheim GmbH. The technology in use there has since grown outdated. This is why, in November 2015, Messer decided to replace the entire filling plant, over two project segments, with a modern installation featuring automated filling processes. It was commissioned in July 2017. Among other things, this modernisation provided greater safety, more ergonomic working conditions, simpler handling for the operator and more precise gas mixtures thanks to the mechanical filling process.

Slovakia: Certification provides edge

In April 2017, Messer Tatragas became the first manufacturer of food-grade gases in Slovakia to receive FSSC 22000 certification. This certification provides confirmation of compliance with internationally recognised food industry standards. In this way, we increase our customers’ trust in us and improve our prospects in the market.

France: Joint venture extended

Since 1992, Air Products has operated an air separation unit in Beauvais as an equal shareholder in the “Soprogaz” joint venture with Messer France. Last year, the term of the joint venture was extended until December 2029. According to the new terms, Messer France is the operator of the air separator with effect from 1 June 2017.

Bosnia-Herzegovina: Messer BH Gas is approved CO2 supplier to Coca-Cola

Messer BH Gas is an approved exclusive supplier of carbon dioxide for Coca-Cola in Bosnia-Herzegovina. In early November 2017, during a two-day audit, Messer BH Gas succeeded in demonstrating that its two CO2 production lines conform with the high standards of The Coca-Cola Company. This includes the raw gas quality, a detailed production sequence, first-class process monitoring as well as regular analysis of raw gas parameters and an analysis of the end product by an independent laboratory recognised by The Coca-Coca Company.

Serbia: Messer Tehnogas gains renewed approval for medical gases

On 13 October 2017, Messer Tehnogas, Serbia, received its renewed marketing authorisation for medical gases. Before that, the company had to renew its licences for the production of medical gases at its five production sites. Both measures were completed within an unusually short time frame. After obtaining the manufacturing licences and successfully carrying out GMP certification, the marketing authorisation renewal process only took a few weeks – instead of the usual six months – thanks to good cooperation with the Serbian Medicines Agency. In addition, Messer Tehnogas had previously succeeded in bringing about a change to the rules and regulations that apply to the production of medical gases: it is now no longer necessary to employ a correspondingly specialised pharmacist as the manager of a medical gases filling plant. As in other European countries, medical gases filling operations can now be managed by non-pharmacists in Serbia too. At Messer Tehnogas, they tend to be mechanical engineers with a degree and an appropriate level of experience, thereby fulfilling the more flexible requirements which, besides pharmacy, now also permit academic qualifications in mechanical engineering, technology, chemistry and five years of relevant professional experience.

When it comes to clinical treatment, medical gases are an important component for health. They are also used in cryotherapy, in the storage of biological materials and in many other areas.

Slovakia: Messer Tatragas puts modernised testing facility into operation

At the beginning of March 2017, Messer Tatragas put its modernised steel cylinder testing facility in Sal’a into operation. A new conveyor chain for automated blasting, spray painting and drying has been installed, facilitating highly efficient processing of the steel cylinders. Furthermore, an ultrasound testing unit is now being used in addition to the existing hydraulic testing facility. The entire project took 14 months to complete, during which the testing of steel cylinders continued without interruption. With the granting of the operating licence, all the new facilities have now been put into operation.

Up to 100,000 cylinders from Poland, Hungary, the Czech Republic and Slovakia will be tested in a two-shift operation. To this end, eight new employees have been taken on.

Up to 100,000 cylinders are tested at the modernised testing facility in Šal‘a. Fótyi Dezider and Frantisek Tóth of Messer review the data with the aid of the BABEL system for cylinder tracking.

Documented Supply Chain

Messer maintains a long-standing relationship with its suppliers. Within the corporate areas, the purchasing of logistics services, commodities, merchandise, machinery and containers throughout Europe is centrally organised. For these products, Messer works with long-standing suppliers who are regularly audited. Before concluding a contract with a new supplier, the supplier is first subjected to a comprehensive audit.

When selecting suppliers, the Messer Group makes sustainable behaviour a prerequisite; it also observes the principles anchored in the UN Global Compact.

The Engineering & Production Department at the Messer Group has been successfully certified in accordance with ISO 9001 since 2013. The Corporate Production Department supports the national subsidiaries with the operation and maintenance of existing production facilities (troubleshooting, maintenance planning, expertise transfer/training, standardisations).

The Engineering Department is responsible for all technical and procurement-related aspects in connection with execution of projects for the production of all manner of gases. These include the development and the safe and quality-compliant construction or conversion of units for the production of technical and medical gases. In addition to plant design, project management and construction management, these tasks also include procurement/purchasing of all necessary plant components and continue through to commissioning. Because many components meet customer-specific requirements, the department has a large number of suppliers with which the Messer Group maintains long-term supply relationships.

Extensive supplier audits are performed each year within the scope of certification under ISO 9001.

The Logistics, Sourcing and Filling Plants Department (SCM) ensures the availability of products for the Messer Group. It is responsible for the development and construction of transport equipment. Standards are defined to achieve a maximum level of effectiveness and safety. Logistics services essentially entail the procurement of transport services. External carriers transport bulk and cylinder products. These carriers use Messer transport equipment for the transport of gases. Agreements in place with the transport companies are subject to annual review.

In this regard, the Messer Group attaches great importance to compliance with safety standards, reducing diesel consumption and continuously improving emissions behaviour.

The purchase of energy for the consumption of electricity by the air separation units falls under the generic term of “Commodities” and is also organised centrally by SCM. Long-term agreements with renowned energy suppliers secure the use of electricity. Customers’ supplies of products are ensured through long-term agreements with suppliers of gas and raw materials.

Messer GasPack supports and advises Messer’s national subsidiaries on all matters relating to high-pressure vessels, tanks and evaporators. This includes technical design, approvals and legal aspects, as well as maintenance, testing and handling of the equipment. Technical standards are defined that are relevant, inter alia, to the procurement of the assets by Messer GasPack.GasPack is also responsible for the development, construction and conversion of filling plants and the associated equipment in cooperation with the national subsidiaries.

SCM and GasPack conduct supplier audits based on a standardised procedure. In audits of suppliers, attention is paid to implementation of a quality-management system and, inter alia, other aspects relative to quality, safety, sustainability and environmental protection. Each supplier receives and is notified of the assessment it has received as a result of the audit. If an assessment is unsatisfactory, the supplier does not receive authorisation.

Birthdays of our companies

Germany: Messer Industriegase GmbH is ten years old

On 12 May 2017, Messer Industriegase celebrated its tenth birthday in the location in Germany and hence its successful re-entry to the German market in 2007. Highlights in recent years have been the construction of the air separation units in Siegen and Salzgitter as well as the expansion of the cylinder gases filling plant in Siegen.

Vietnam and Bosnia-Herzegovina: Twentieth anniversary

In 2017, the Messer entities in Vietnam and Bosnia-Herzegovina celebrated their 20th anniversaries.

Messer in Vietnam celebrated its birthday with a glittering ball – with music, dance and lots of guests. Host Marc Wachter (4th from left) addressed the audience from the stage and thanked all his companions.

Slovenia: Two birthdays

Messer in Slovenia celebrated two birthdays: Messer Slovenija has been the country’s market leader in industrial gases for 25 years. The plant in Crnuce has been producing acetylene for 50 years.

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