As the second wave of the pandemic ripped across the country triggering shortage of medical oxygen, industrial and medical gases manufacturer Linde India Ltd marshalled all the resources at its command to scale up production. BusinessLine spoke to Abhijit Banerjee, Managing Director, Linde India, to know how it coped with the surge in demand and the way forward. Excerpts:
The country was caught unawares on availability of medical oxygen as the second wave of Covid struck. Couldn’t this have been foreseen?
The typical medical oxygen demand in the country prior to Covid was roughly about 1,000 tonnes per day (TPD). When the pandemic hit, initially the numbers went down because lot of hospitals deferred their non-critical operations. Then the numbers picked up, they reached a peak sometime in September/October last year and at that time the overall country demand was around 3,000 TPD. So, there was a three-fold increase.
But what happened in Wave 2 is, that 3,000 TPD or rather 1,000 TPD was in the range of 9,000 TPD. Here we are dealing with several things which couldn’t have been imagined. No one had predicted it would go to 9,000 TPD.
How did you as a top oxygen producer deal with this?
What we did from an asset perspective is we mobilised these cryogenic ISO containers, air freighted them to India. We got a lot of support from corporates and we filled them up and put them on our circuit with the help of Railways to move the product into areas which are far flung.
We have excess production capacity in certain parts of India. Most of our production capacities are in the eastern part of India, namely Orissa and Jharkhand. The Wave 2 first hit the west, then in the north and now in the south.
Linde Group’s total liquid oxygen manufacturing capability in India is around 2,000 TPD. Once we realised the magnitude of the demand, the operations team started looking into what more can be done. The simplest thing was to ramp it up to the maximum capacity of the machines.
Secondly, lot of our plants produce, along with liquid oxygen, nitrogen and liquid argon. We started producing more liquid oxygen at the cost of liquid nitrogen and liquid argon.
Thirdly, most of our big plants are installed at customer sites, primarily in the steel industry. In a lot of cases, our customers voluntarily reduced their gaseous oxygen offtake to enable us to liquefy a bit more of oxygen up to the limit of the liquefaction capacity of the plant.
Was this enough?
So, the number of around 2,000 TPD of our nameplate capacity, went up to almost 3,000 TPD on very good days. The average was around 2,900 TPD on a sustainable basis. Almost a 45-50% jump in the production capacities was something we were able to get, which played a huge role in meeting the demand. We have peaked at that level of production capacity. Maybe, we can scrape out another 5-10 TPD here and there.
We also have substantial stock across India, every air separation unit has a big liquid oxygen storage tank. This also helped because as against producing 2,900 tonnes on a sustainable level, our despatches were in the range of 3,300 TPD. So, we were sucking out 400 TPD from our inventory, which also helped meet the peak demand.
From a medical oxygen perspective, we were doing around 350-400 TPD maximum prior to Covid, the average went up to 2,000 TPD, a seven-fold increase. At the same time, industrial oxygen went down to zero. Because of the shortage in tankers, there was a drive to convert our nitrogen and argon tankers to oxygen tankers. We ended up converting more than 70% of them.
How did the logistics part pan out?
Roughly, we have around 500 cryogenic road tankers.
The lead time for manufacturing a new cryogenic tanker and the certification would be about 6-8 months. That’s why we imported these ISO containers and put them on Railways. We now have around 70 of them plying on about 11-12 railway rakes across the country.
We got excellent support from the Indian Railways and Concor. Typically, a truck from Eastern India to Bangalore which is about 3,000 km on a round trip basis, would take up around 10-12 days to do. By using Railways, we have been able to cut that 10-12 days into something like 3-4 days. So, it’s a huge multiplier effect that the tying up with the Railways has given.
The 70 ISO containers is equivalent to 250-odd road tankers.
Were there any legal hurdles in moving oxygen in cryogenic containers?
This is one of those archaic regulations that we are subjected to. We struggle to understand the exact concerns around it. The movement of oxygen in cryogenic containers is not permitted in India. It is only for the pandemic that an exception was made. And we do hope that this exception continues because it gives an incredible amount of flexibility.
The government is looking at various measures such as PSA plants at the hospitals to produce liquid oxygen? Will that suffice?
On the PSAs, a word of caution. The selection of the vendor of PSAs is important, proper maintenance regime around the PSAs is exceedingly important because we know of several cases where they just konk-off after 5-6months and the sizing of the unit is important because you need to consume what is produced. There is no possibility of storage or anything to take care of spikes. And the PSA is a machine which needs a back-up. But, PSAs alone would not be the ultimate solution.
What are the changes that will help in this?
Having more of liquid oxygen storage capacities at the hospitals would go a long way in ensuring that such spikes can be attended to in a better manner. This also calls for certain change in some of our regulations in terms of safety which are a bit outdated and not really followed in several countries, both developing and developed.
That would allow the hospitals to have larger liquid oxygen. Some hospitals are unable to go in for liquid oxygen facilities because the space as mandated by the regulations is not available, the ones in the towns and the cities. So, changing the norms to whatever is accepted worldwide would give a lot more flexibility to the hospitals to go in for bigger installations or to get out of dependence only on compressed medical oxygen and to tap liquid medical oxygen.
The state governments are also offering incentives for additional manufacturing capacities. We have also suggested that adequate storage capacities should be done at the hospitals and in case there is lack of economic viability around the enhanced capacity, the government can look into subsidising that. Hospital demand will never ever justify setting up a cryogenic plant of a certain size.
Is Linde looking at related business?
With all these developments, there would also be possibilities for us to invest and enhance our portfolio.
Refrigeration is something very core to our business. In India, it’s not been much but the technologies are available with us. For example, in case, there is a roll out of the Pfizer vaccine in India, we have the technologies available to ensure the supply chain is suitable for feeding that. Refrigeration and allied technologies are core to our business.
