Major Indian oxygen plant manufacturers are facing severe supply shortage of key components and as a result, they are finding it difficult to execute orders for setting up oxygen plants in hospitals.

MVS Engineering, which has been making oxygen plants based on Pressure Swing Adsorption (PSA) technology since the 1980s and one of two big Indian companies manufacturing oxygen plants, said that the firm is not getting sufficient supplies of Zeolite Molecular Sieves (ZMS) – a critical component required for trapping nitrogen in the air.

Hurdles to get ZMS

Likewise, Coimbatore-based Trident Pneumatics Pvt Limited said difficulty in procuring ZMS, which is imported mainly from the US and European countries, is affecting the execution of projects they have undertaken.

“There are too many new players in the market. Since they all strive to maintain a minimum stock, there is a sudden spike in demand which is affecting the supply,” said KS Natarajan, Managing Director of Trident.

As the second wave hit the country in March, there was a massive spike in demand for medical oxygen, which led to shortage in its supply. As a result, a large number of serious Covid-19 patients could not survive.

“Even as demand is surging from hospitals for PSA Oxygen Plants, a number of injudicious and knee-jerk policy decisions have led to an artificial shortage of inputs required in our manufacturing process,” said Siddharth Rastogi, Executive Director, MVS Engineering.

Also read: To mitigate shortage, CIL and NLC to set up 46 new oxygen plants

‘Monopolising ZMS’

According to him, the Defence Research and Development Organisation (DRDO) and the Indian Institute of Petroleum (IIP), a CSIR lab based in Dehradun, has monopolised the supplies of ZMS.

“World over there are only limited suppliers of ZMS. But DRDO and IIP are buying them in bulk and they are not in a position to honour the supply commitment made to us,” Rastogi told BusinessLine.

According to him, one overseas supplier informed them that it can supply ZMS only in August, which it had earlier agreed to supply in April.

While DRDO transferred its technology to two firms with orders to build 380 oxygen plants, the IIP is working with local vendors to make and supply another 120 plants. All these plants are supported through PM-CARES Fund. Trident is one firm that has orders from DRDO to make oxygen plants. Natarajan said his orders outside DRDO contract are also affected by the ZMS shortage.

MVS Engineering which has already supplied 40 oxygen plants since the beginning of the pandemic, now has orders in hand for supplying another 60 plants of varying capacities mainly from CSR funds of reputed companies.

“Most of these plants are meant for government hospitals,” he said. “While our requirement is around 40 tonnes of ZMS, the government agencies have placed orders for 200 to 300 tonnes per month, squeezing the supply lines,” Rastogi said.

Similarly, the lockdown also led to challenges in procuring inputs such as changeover valves, pipe fittings and pipe materials, oxygen analysers, air compressors, refrigerated air dryers and filters. “There is a need for well thought out policy corrections from the government to ensure that private manufacturers of oxygen plants do not face such supply challenges,” he said.

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