Companies

Ellenbarrie Industrial Gases setting up ₹250-crore plant in AP

Shobha Roy Kolkata | Updated on August 11, 2021

Promoters re-acquire 51% stake from Japan’s Air Water Inc

Promoters of Ellenbarrie Industrial Gases Ltd, an integrated industrial and medical gases company, have re-acquired 51 per cent stake for an undisclosed sum from Air Water Inc, a Japanese industrial gases conglomerate.

The company, which has witnessed a surge in demand for medical gases in the wake of the pandemic, is investing ₹250 crore to set up a 600 metric tonne (MT) per day capacity plant at Kurnool in Andhra Pradesh for producing oxygen, nitrogen and argon.

In 2013, the Agarwala family had off-loaded 51 per cent stake to Air Water Inc. The buyback at present marks an exit of the Japanese company from Ellenbarrie.

According to Varun Agarwal, Executive Director, Ellenbarrie Industrial Gases Ltd, there has been a surge in demand for medical gases in the wake of the pandemic and governments — both Central and States — and the medical community is willing to invest on securing oxygen supply by setting up centralised pipeline system and installing storage tanks.

“We have been witnessing lot more sale coming in from medical oxygen in the wake of the second wave of pandemic. Industrial oxygen used to account for nearly 90 per cent of our business earlier but now we are seeing industrial sale stabilizing at around 60-70 per cent. We have quickly repositioned ourselves not only in terms of enhancing capabilities of medical oxygen, but also in providing centralised gas pipeline system solution,” Agarwal told BusinessLine.

Ramp up manufacturing

The Kurnool plant is expected to go on-stream in the second half of 2022 and will cater to the company’s growing clientele in Andhra Pradesh, Telangana and Karnataka.

“A majority of the investment in the plant will be through internal accruals and we will also go for a small share of debt,” he said.

The company has retired all its borrowings and claims to be currently debt-free.

Its existing production facilities are located at Kalyani, Uluberia, Kharagpur and Panagarh in West Bengal; at Visakhapatnam in Telangana; and Hyderabad in Andhra Pradesh.

Ellenbarrie, which clocked a turnover of ₹250 crore in FY-21, is expecting to double its turnover to ₹500 crore in the next two years.

Apart from oxygen, there has been a steady rise in demand for nitrogen from the pharmaceutical sector.

“Globally, with people trying to diversify supply chain away from China there has been a growing demand for nitrogen, which is used in pharmaceuticals and a host of other sectors including oil and gas, fertilizer etc,” he said.

The new capex undertaken by the company and a good order flow for its existing capacity is expected to shore up its turnover over the next two years, he added.

Published on August 11, 2021

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