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ABC Industrial Gases Pvt Ltd

V 100723

PROJECT REPORT INDUSTRIAL GAS MANUFACTURING UNIT

1.0 The company


1.2 Address 1.2.1 Registered Office Factory: (proposed): 1.2.2 Admin. Office

ABC Industrial Gases Pvt Ltd. (CIGPL)

: Tel:

1.3 Type of Organization: Private Limited Company 1.4 Incorporated on: 1.5 Names of Directors: 1 2 3 Manufacture of oxygen (gas), nitrogen (gas), liquid nitrogen.

1.6 Proposed Activity :

2. The Promoters 3. Background of the Proposal The common industrial gases in demand are: Nitrogen Industrial oxygen Liquid nitrogen Medical oxygen Foaming gas (Mixture of nitrogen and hydrogen)

Created by SITI Ph. 94463 75166

ABC Industrial Gases Pvt Ltd Due to SGLs marketing activities, it became clear that good potential existed for industrial gases at Cochin. Because of the captive supply to HOCL, SGL does not have the production capacity to fully meet demand from other customers. Hence the promoters decided to start a new unit for industrial gases. Initially, the plan was to start a Greenfield plant on land owned by CIGL at Mattakkuzhy, near Thiruvankulam. Accordingly, a proposal was submitted to IOB for a term loan. However, due to procedural difficulties / delay in getting Government Clearances (Pollution Clearance), the project could not take off. While Pollution Clearance is now at the stage of sanction, there is now a doubt that the sanction for supply of electricity (which is the major input for industrial gases) could be indefinitely delayed, due to capacity problems faced by the KSEB. Hence it was decided to explore the possibility of purchasing a newly commissioned plant with power supply already available. Such a plant was located at Edayar, Aluva. . The Product The proposed product is gaseous oxygen, nitrogen and liquid nitrogen. Atmospheric air consists mainly of oxygen, and nitrogen, together with small quantities of water vapour, carbon dioxide, rare gases (argon, helium) etc. Oxygen constitutes about 20.94 % of the atmosphere, with nitrogen accounting for most of the balance. Oxygen and nitrogen are colourless, odourless and tasteless. When cooled sufficiently, oxygen and nitrogen become liquids. CIGL proposes to manufacture oxygen and nitrogen gases, to be supplied to customers in cylinders, and liquid nitrogen to be supplied to customers in flasks. Manufacturing Process The raw material is atmospheric air. Atmospheric air consists mainly of Oxygen (20.94 %), and Nitrogen with minute quantities of other gases. The Oxygen manufacturing process is called Cryogenic Air Separation. Oxygen and nitrogen from air are separated through difference in boiling points by distillation through a fractional column. Atmospheric air is sucked in by a multi stage compressor through a filter and compressed to the design pressure. The compressed air is then passed through

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ABC Industrial Gases Pvt Ltd intercoolers, industrial refrigerator, moisture separator and then to a molecular sieve battery for removal of carbon dioxide, hydrocarbons and water vapour from the process air. This pure air is then passed through the first heat exchanger, where it is cooled by the outgoing oxygen and nitrogen. Part of this cooled air then passes through an Expansion Engine and the other part through a second heat exchanger. Both the Expansion engine and the second heat exchanger help in further cooling down the air, which is finally released to the bottom of the column through an expansion valve. The air becomes liquid at this stage. The column consists of two parts, Lower column and Upper column. In between the lower and upper columns, there is a condenser, which acts as a reflux for the lower column and as a re-boiler for the upper column. The liquid air at the bottom of the lower column separates through the trays of the column to give crude oxygen at the bottom and approximately 90 % pure nitrogen at the top. Crude oxygen, termed as rich liquid, is then expanded through an expansion valve, from the lower column to the middle of the upper column. Crude nitrogen termed poor liquid is expanded through another expansion valve from the top of the lower column to the top of the upper column. Due to difference in boiling points, the pure nitrogen boils over and accumulates at the top of the upper column, and oxygen, (which has a higher boiling point than nitrogen) accumulates at the bottom of the upper column. Both nitrogen and oxygen are removed through separate paths in heat exchangers, for cooling the incoming air. Oxygen is compressed to a prescribed settled pressure by a liquid pump and is directly filled into cylinders. purity 99.5 % and above. Nitrogen is available at a pressure of approx. 0.5 kg / cm 2 and can be compressed into cylinders with the help of an independent high pressure compressor. Normally the nitrogen available is of 97.5 % to 98.5 % purity only and is let out in the atmosphere as waste product. However, when the nitrogen is to be filled into cylinders for commercial use, the plant is controlled by a change in the value setting to make the mixed air chamber operative, to achieve the required nitrogen purity. The Project The oxygen produced thus is of

Created by SITI Ph. 94463 75166

ABC Industrial Gases Pvt Ltd

The project involves acquisition of an industrial gas manufacturing unit at Edayar, Aluva, at an aggregate cost of Rs 160 lakhs.
3 Cost of the scheme Description Quantity Rate Rs lakhs Amount 10.00 25.00 15.00 10.00 100.00 160.00 10.00 15.00 185.00

Land in Edayar Industrial Development 20 cents Area, Aluva, Ernakulam District Buildings Electrification, cabling etc. Miscellaneous Assets Plant & Machinery TOTAL PURCHASE CONSIDERATION Working Capital Margin Generator (to be purchased) TOTAL PROJECT COST

4. Means of Finance Funds from Promoters Term Loan from Bank TOTAL 5. Manpower The requirement is as under: Supervisor / Engineer Plant operator Cylinder filler Mazdoors The required staff are readily available. 6. Marketing 1 1 (per shift) 1 (per shift) 2

Rs lakhs
47.00 138.00 185.00

The promoters are already familiar with the marketing of industrial gases at Kochi. The major uses of oxygen are: a. Industrial oxygen used for oxy-acetylene welding b. Medical oxygen used in hospitals

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ABC Industrial Gases Pvt Ltd The major buyers of industrial oxygen are: Major industrial users and around 300 local buyers in all districts.

The important customers of medical oxygen are: All major govt. hospitals in almost all districts and more than 100 local buyers. Existing Customers of SGL for Liq. Nitrgen: Existing Customers of SGL for Nitrogen Gas: CIGLs products will be suitable for and will find a ready market for both industrial and medical purposes. 7. Security a. Primary Security Hypothecation of Oxygen plant proposed to be purchased, together with accessories. b. Collateral (i). Equitable mortgage of (Personal Guarantees Guarantees of the promoter-directors, are available for the loan. 8. SWOT Analysis Strengths 1. The promoters are well experienced in manufacturing and marketing industrial gases at Kochi. 2. One of the directors, Mr. Sankaranarayanan is an expert in manufacture of industrial gases. 3. There is good demand for the proposed products viz. gaseous oxygen, nitrogen, and liquid nitrogen, around Kochi. 4. CIGLs products will be of relatively better quality than that of other suppliers, due to CIGLs plant being new. belonging to the company.

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ABC Industrial Gases Pvt Ltd Weaknesses The unit being new, customers will have to be weaned away from other gas suppliers, before the full potential can be realized Opportunities The industrial activity around Kochi provides an excellent opportunity for a unit manufacturing industrial gases. Threats There are already several units established near Kochi, which are engaged in manufacture of industrial gases. FINANCIAL INDICATORS While detailed projections will be submitted with the application, it is expected that the project will be profitable from the first year itself and that the DSCR (Gross) will be acceptable, with a minimum value of 2.00. 9. CONCLUSION The proposed unit is financially viable and technically feasible. We request our esteemed bank to finance us for implementation of the project.

DIRECTOR

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