REATILE Gaz, the broad-based black economic empowerment partner of industrial and speciality gas company Air Products, is setting up shop in Port Elizabeth.
It would be the second major investment for the Nelson Mandela Bay municipality’s gas industry since May, when Air Products invested R300m in building a 150-tonne-a-day air-separation unit in the Coega Industrial Development Zone.
But Reatile Gaz is still waiting for permission from the provincial department of economic development, environmental affairs and tourism before construction on a 45,000-litre liquefied petroleum gas (LPG) supply facility can start.
It said on Tuesday it hoped to increase its LPG and propane production capacity as the Eastern Cape economy grew.
LPG is a combination of propane and butane, commonly used to solder copper and heat other industrial inputs.
In 2007, Reatile Gaz purchased the LPG business of Air Products. Its new facility in the city’s industrial area of Markman is part of a strategic alliance for both companies to provide each other’s products to the area.
“Our decision to open a facility in Nelson Mandela Bay was fuelled by the Eastern Cape’s positive investment environment and an expanding LPG market,” Reatile Gaz chairman Simphiwe Mehlomakulu said on Tuesday.
By partnering Air Products, the company would be able to provide a “full bouquet of services to a market that has long been underserved”, he said.
The Nelson Mandela Bay municipality is home to the crucial Eastern Cape automotive sector, among other large industries. The sector is centred on Port Elizabeth, Uitenhage and Despatch, and uses the world-class infrastructure and deep-water port of the Coega development zone.
“The partnership will have far-reaching implications for gas users in the Eastern Cape … ensuring security and reliability of supply,” Air Products MD Mike Hellyar said on Tuesday.
Reatile Gaz had already bought land in Markman and planned to open an LPG cylinder-filling facility by May next year. It would use local companies to establish operations and employ local people to deliver the gas.
Air Products in November signed a land-lease agreement with the Coega Development Corp, confirming the construction of the air-separation unit.