Linde to invest €1 bn in BOC to scale up operations

Kolkata: Germany’s Linde Group plans to invest €1 billion in its Indian subsidiary BOC in the next 7-10 years in order to scale up operations.

A major part of the investment will focus on gas plants in steel industries though the company will also lay emphasis on industries such as oil, pharmaceuticals and petrochemicals, Mr S.M. Datta, the BOC Chairman, said.

The steel industry continues to drive the demand for industrial gases in India. “Steel will be our core area of focus; it is our ‘bread and butter’.

We are working with companies such as Tata Steel, SAIL and Jindal,” Mr Sanjiv Lamba, Managing Director, South and East Asia, Linde Group, told reporters after the BOC annual general meeting here.

Steel currently accounts for less than 50 per cent of the company’s annual turnover. “We want it to grow more than 50 per cent in the next four-to-five years,” Mr Lamba said.

The non-steel sectors such as pharmaceuticals, food and cold chain would also be areas of growth for the company, he said. BOC is currently setting up its largest 1,800-tpd plant at the steelworks of JSW Steel Ltd at Bellary, besides a merchant Air Separation unit in north India.

BOC has tied up with Moser Baer for electronic gases used in photovoltaic cells. “It is a very exciting business but it is at a nascent stage in India. There are certain technological risks that needs to be settled,” Mr Lamba said. Moser Baer plans to conduct a test run by setting up a 40 MW facility, which would be later scaled up to 130 MW within this year, Mr Lamba added.

BOC currently imports electronic gases but the company plans to set up an electronic gas production unit in the country which has to be set up downstream of a petrochemicals unit. Closeness to a port to enable easy transportation is also an important factor, Mr Lamba said. “We are open to the idea of setting up a plant here once we reach the economic scale of consumption and are convinced about the supply chain,” Mr Lamba added.

The company’s board has undergone certain changes. Mr E.R. Raj Narayanan resigned as Managing Director of the company and Mr Trevor Burt and Mr R.N.

Greenfield resigned in view of their decision to leave the Linde Group. The BOC board has recommended a dividend of 20 per cent (Rs 2 per equity share) for the nine months ended December 31, 2007, against 25 per cent paid for 2006-07.