Industrial gas company Afrox has signed a land lease agreement with the Coega Development Corporation (CDC) for the construction of a R300m air separation unit at the Coega Industrial Development Zone in the Eastern Cape.
Coega on Tuesday said this was the first public announcement of a secured investor in this financial year and other deals were in the pipeline.
“Coega has really gained momentum over the past few years in spite of a tricky global economic climate and investment it has shown sustained investor attraction, particularly in strategic and high impact projects,” said Christopher Mashigo, Coega Development Corporation (CDC) Business Development Executive Manager.
“Clearly investors are closely watching the developments at the Coega Industrial Development Zone and seeing the potential in the Eastern Cape. This is encouraging for the CDC and we applaud savvy investment that will enable supply chain development and secure further industrial prowess for the province, while creating jobs across industry.”
Afrox will establish a 150 ton per day air separation unit (ASU) in the Industrial Development Zone (IDZ) to service customers throughout the Eastern Cape. The investment will see the supply of a variety of industrial gases used in the automotive, food processing and medical sectors.
Afrox managing director Brett Kimber said it made strategic sense to build a plant in Port Elizabeth, saying “this is where the customers are”.
“We want to reinvigorate quality and reliability of supply,” he said, adding Afrox had looked at multiple sites but that Coega has won out in the end.
Afrox has an established customer base in the Eastern Cape, servicing the automotive and medical sectors in particular, but the company also indicated that it is focused on broadening its focus. “There are burgeoning opportunities in mining, chilling and the fish industry. One of the most exciting things about the gas industry is the breadth of customers you work with. Our commitment to Port Elizabeth is to assure our partners that they can rely on Afrox to meet their needs.”
Coega welcomed the R300-million investment saying that it would support industrial development.
“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,” added Mashigo.
“As the IDZ comes of age we begin to see operations that are not necessarily inside conventional factory buildings, but go beyond the IDZ into the city and business itself. This represents a mark of confidence in the IDZ and a complexion of fullness of IDZ development as the plug and play motif gains further credence with the addition of gas to the utilities available. I am looking forward to seeing the completed picture on the not so distant future.”
High level officials were in attendance at the signing ceremony and Nelson Mandela Bay Business Chamber chief executive, Kevin Hustler, welcomed the investment on behalf of the business community.
”Afrox will have a critical role to play in the next 20 years as we diversify. Something we don’t realise is how far and wide gas goes. It touches so many sectors of the market. It is wonderful to see the nature of such investment in our city,” Hustler said.
The Afrox ASU will come online in Zone 3 of the Coega IDZ in the first quarter of 2015.