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India has enough oxygen production to meet existing demand: Siddharth Jain, director of Inox Air Products

Inox Air Products supply 50 percent of the oxygen requirement in the country, Siddharth Jain, director of Inox Air Products told Moneycontrol in an exclusive interview.

April 20, 2021 / 12:10 PM IST
Siddharth Jain, director of Inox Air Products told Moneycontrol in an exclusive interview that there was a reason to worry only if the COVID-19 wave did not decline in Maharashtra and Gujarat and the demand for oxygen in other states rose.

Siddharth Jain, director of Inox Air Products told Moneycontrol in an exclusive interview that there was a reason to worry only if the COVID-19 wave did not decline in Maharashtra and Gujarat and the demand for oxygen in other states rose.


At a time when the country is facing a panic situation regarding the availability of oxygen, Inox Air Products that contribute to 50 percent of the medical oxygen market in India states that the current production capacity in the country is enough to meet the existing demand. Siddharth Jain, director of Inox Air Products told Moneycontrol in an exclusive interview that there was a reason to worry only if the COVID-19 wave did not decline in Maharashtra and Gujarat and the demand for oxygen in other states rose. There is no supply-side bottleneck that the industry is facing at the moment, he added.

Excerpts:

Q. There is a lot of talk about medical oxygen shortage in the country. Being the largest manufacturer, how do you evaluate the situation?

A: It is a very difficult situation. Inox Air Products produce 50 percent of the medical oxygen requirement in the country. When you look at it from an all-India perspective, we are very comfortable as a country. At present, 7,200 metric tonnes per day (MTPD) of oxygen is manufactured in India in liquid form, which is supplied to hospitals. The current demand is 5,000 MTPD only.

Q. If the supply-demand situation is manageable, why do we see a concern and shortage?

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A: The only problem is the excess supply that is there in the market is in East India like in Odisha and Jharkhand, whereas the demand is mostly coming from Western India – Maharashtra, Gujarat and Madhya Pradesh.

Now, demand has also started picking up in Delhi and Uttar Pradesh. The issue is that supply is available in places that are very far away from the demand. We are trying to find a way to transport the same. The ministry of railways has launched the oxygen express, which is moving oxygen by rail, which has not happened before. The first oxygen express was flagged off, which went from Mumbai to Vizag to pick up material from the Vizag steel plant and bring it back to Mumbai.

In many places, because the demand is increasing, it is a hand to mouth situation. We are managing this. Cases are very high in Maharashtra and Gujarat now. I hope the cases come down in those states when demand in other states go up. It is an all-time high for medical oxygen demand in the country.

Q. Do we have enough stock to face the challenge of rising situation?

A: Certainly, if the cases increase from 250,000 a day to 500,000 a day, then we will have a problem. Right now we are managing. The demand is coming from all parts of India. We are the largest manufacturers and have the maximum number of plants all over India. We are luckily being able to do our duty to the country and serve the country during the time of need. The only people who are suffering are some industrial sectors. Some of those entities that were dependent on oxygen had to shut down as life comes before livelihood at least right now.

Hopefully, this will last only one month and then the hump will go away. There is plenty of stock available. Almost 40,000 tonnes of stock available pan India, across the industry.

Q. In April 2020, too, the government decided to divert industrial oxygen for medical purposes. How important was this decision?

A: It was the most crucial decision ever. It was game-changing for India. Earlier, about 70 percent used to go for industrial purposes that has come down. On an all-India basis, out of 7,200 MTPD, around only 15 percent is now going to industry.

If you look at the number of deaths in India compared to the number of cases, the percentage is one of the lowest in the world. I think so far has done a good job to keep the mortality rates down. Of course, the number of cases has gone so high and it is beyond our control.

I will not be able to say how the demand for medical oxygen will be in the coming days. The thing about Corona is that it is a wave – something that goes up and then comes down. At first, a high number of cases started in Gujarat and Maharashtra. I am only praying that, when the Uttar Pradesh and Delhi wave begins, cases in Gujarat and Maharashtra go down. Then, we will be able to manage the oxygen demand.

Q. How important is the role of Empowered Group 2 (EG2), a group formed by the PMO comprising officials from different ministries and experts, in oxygen supply? How do you see the plan to import 50,000 tonnes of medical oxygen?

A: EG 2 which was set up by the commerce and industries ministry is effectively working for the last one and a half years, ensuring that oxygen supply is going everywhere. The industry is fully part of it. The speed at which the government is addressing the issue taking the public sector along is absolutely phenomenal.

After focussing on 12 states, EG2 is now looking at the remaining parts of India as well. Now, the demand has crossed beyond the 12 states. Everything is reported right now and we are managing the situation currently. Undoubtedly, it is difficult, but it is a warlike scenario and we have to fight this together.

As far as imports are concerned, we should try everything right now. We should try all the tools available to us.

Q. Is this a game-changing moment for the industry?

A: Inox’s current capacity of oxygen is around 2,300 MTPD, out of a nationwide demand of close to 5,000 MTPD. We have around 40 manufacturing units across the country. We have also lined up a Rs 2,000 crore expansion plan to set up eight new plants across the country. That will be implemented within the next 12 to 36 months. It is the largest greenfield investment ever announced in the industrial and medical gas space in India.

Nobody wants to see oxygen being used in a huge manner. We want people to be healthy, not sick. We want to see the industry grow, not through any such pandemics.

Our growth has been constant for the past year. Whatever we were producing one year ago, we are producing now, in addition to that we are producing 5-10 percent extra.

Q. Are you facing supply-side bottlenecks? Do you have enough cryogenic tanks to carry oxygen?

A: The demand has happened all of a sudden. If you see the spike in cases in India, the previous highest was around 100,000 cases per day, which has touched 250,000 cases a day now. So, cryogenic tanks may not be made available overnight. Transport tanks need four months to manufacture. Whatever is being manufactured in India (7,200 MTPD), we have enough transportation infrastructure in place for that. Hence, there is no supply-side bottleneck at present.

Now, to reach it to more areas the government has allowed us to move it in nitrogen tanks too. I believe that all states should allow ambulance status to the tankers so that they move faster. That will certainly help and reduce the transit time and that decision must be taken by every state.
Shine Jacob
first published: Apr 20, 2021 12:10 pm

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