Oxygas to fill a gap as clear as day

In an interview with Managing Director of the pioneering company, Keamogetse Molebatsi, it came to light that Oxygas will be a manufacturer of liquid and gaseous oxygen, nitro-oxide, nitrogen and acetylen. The company has been set up in Selibe-Phikwe to the tune of P87 million and was financed by leading development finance institutions, Botswana Development Corporation (BDC) and the Citizen Entrepreneurial Development Agency (CEDA). The project was financed with P82 million, a tally of P42 million from BDC and P39.1 million from CEDA. Oxygas is currently constructing a gas manufacturing plant which is expected to be completed by January 2023. T[ihc-hide-content ihc_mb_type="show" ihc_mb_who="1,2,4,3" ihc_mb_template="3" ] he project is owned by three citizen shareholders. Taboka Baraedi, who started off as a youth with a background in mechanical engineering and the medical field. Molebatsi is also a shareholder and commands considerable experience in management and strategy. Another shareholder is Mosalagae Regoeng, who is a seasoned businessman. Molebatsi says they chose to set up in Selibe-Phikwe because they wanted to play a role in diversifying the town that is a former copper-nickel hub that may yet become re-established as a mining town. Further, says Molebatsi, they were attracted by the investment incentives of Selebi-Phikwe Economic Diversification Unit (SPEDU). While BDC and CEDA invested money into the project, Molebatsi says Botswana Chamber of Mines (BCM) also played a role in terms of facilitating supply contract partnerships with a few players in Botswana’s mining sector who are its members. According to Molebatsi, the mining sector consumes a lot of these gases that are a specialty of Oxygen The sector is one of its largest target customers. Oxygas was conceived in 2014 after realisation that the medical and industrial gas industry was dominated by multinationals with origins in markets like Europe. “We appreciated the fact that as a country in the SADC region, we are dependent on imports and lack industrial capacity,” says Molebatsi. “As a net importer, we lack security of supply. COVID-19 came and showed us that without security of supply, we risk losing lives.” At the height of the onslaught of the pandemic, demand for medical gas (oxygen) rose to the highest of levels. It was then that the Oxygas directors realised the pressing need to urgently get the company up and running to fill in the obvious lacuna and also contribute to economic development of Botswana, especially in the SPEDU region. OXYGAS’ GREAT POTENTIAL Molebatsi speaks with clarity about the potential that this company has. To begin with, unemployment is a serious blight in the SPEDU region that was heavily dependent on BCL Copper Mine before it was suddenly closed in November 2016, leaving 16 000 people jobless overnight. Significantly, Molebatsi says the advent of Oxygas brings with it 200 direct jobs when operating at full capacity with its projected market share secured. The company will play a role in reducing the country’s import bill when importation of medical and industrial gases becomes unnecessary. Says the Managing Director: “We will create a multi-million pula value chain in terms of the general consumer power of our employees and renting houses in Selibe-Phikwe. There will also be value for the shareholders, which should result in further investments.” MEDICAL AND INDUSTRIAL GASES EXPLAINED Use of liquid oxygen in healthcare facilities has increased dramatically over the past few years. It is relatively easy to store and transport oxygen in large volumes. However, most applications use oxygen after it is vapourised into gaseous form. The primary uses of oxygen relates to its strong oxidising and life-sustaining properties, hence it is commonly relied upon in health and medical applications. Liquid oxygen is used as an oxidant for liquid fuels in propellant systems of missiles and rockets. Oxygen is also widely applied in metallurgy in conjunction with acetylene and other fuel gases for cutting, welding, scarfing, hardening, cleaning and melting metals. Steel and iron manufacturers also use oxygen or oxygen-enriched air to affect chemical refining and heating associated with carbon removal and other oxidation reactions. Benefits such as fuel and energy savings plus lower total emission volumes are often achieved when air is enriched or replaced with higher-purity oxygen. In the chemical and petroleum industries, oxygen is used as a feed component to react with hydrocarbon building blocks to produce chemicals such as alcohol and aldehydes. In many processes, the oxygen for reaction can be obtained from the use of air. However, direct use of oxygen, or enrichment of air with oxygen, is necessary for some processes. There are several major petrochemical intermediates that are manufactured with high-purity oxygen, including ethylene, propylene oxide (antifreeze), vinyl chloride (for PVC) and caprolactam (for nylon). The pulp and paper industry uses oxygen as a bleaching and oxidising agent. A variety of process (liquor) streams shows enhanced physical properties after treatment with oxygen. Plant operating costs also improve. Similarly, oxygen enhances the combustion process in industries that manufacture glass, aluminum, copper, gold, lead, and cement, or that are involved in waste incineration or remediation. There are corresponding productivity, energy, maintenance and emission benefits that end users of oxygen may realise. Wastewater treatment plants employ oxygen successfully to enhance their chemical process efficiency. Aquaculturists such as fish farmers also see benefits in the health or size of their livestock when the host environment is oxygenated. MARKET PENETRATION What excites Molebatsi and his partners is their reason to choose the SPEDU region - incentives. By investing in the region, companies are guaranteed to have 30 percent of the value of what they manufacture purchased by the government. “In 2018, we signed a Memorandum of Understanding (MoU) with the Botswana Chamber of Mines (BCM) for facilitation of Oxygas’ ease of access to the mining industry,” Molebatsi explains. “The partnership is bearing fruit and we have a few players lined up to sign contracts with us.” In his view, the fact that Botswana imports medical and industrial gases is a disadvantage for the country. “During the worst phase of COVID-19, we witnessed how supply chains can become complicated and disrupted to a point of getting products months after the estimated time,” he says. “A product like oxygen is a lifesaver and should be available at all times. The fact that we will be the only 100 percent citizen owned company producing such an important gas should give us a competitive advantage.” Oxygas is already exploring the regional market. In terms of the production capacity, Molebatsi says once commissioned, their plant will have the capacity to meet local demand and have a surplus to export. “We have been in touch with investors in Namibia, Zambia and Zimbabwe and they are enthusiastic about our products. Basically, we are ready for the SADC market and beyond.” he says. THE GROUND-BREAKING Botswana Development Corporation (BDC) celebrated the ground-breaking of a specialised warehouse facility for Oxygen Gas (Pty) Ltd (Oxygas) project in Selibe-Phikwe on Friday 24 June 2022. In addition to being a key investor in the company, the presence and participation of BDC in the milestone event was made all the more compelling by the fact that Oxygas is a 100 percent citizen-owned company set up to manufacture medical and industrial gases in a region of the country to which the government is calling investors. In his remarks, Managing Director of BDC, Cross Kgosidiile, noted that the ceremony was far more than the literal breaking of the ground because it represented breaking new ground in a sustainable manufacturing industry. He commended the synergy between Oxygas, BDC, CEDA and SPEDU for making a unique contribution to Botswana’s economy and wisdom to invest in the future for generations to come. “BDC remains fully committed to fundamentally contributing to the development of a viable, competitive and profitable manufacturing industry,” Kgosidiile said. “Through Oxygen Gas (Pty) Ltd, BDC will be fulfilling its mandate of promoting citizen economic empowerment, creating sustainable economic diversification, promoting a self-sufficient supply of medical gas, which is key to saving the Botswana population from COVID-19, creating jobs for Batswana, promoting real growth of the economy, and assisting in placing the private industry in the forefront of economic development.” The keynote speech was delivered by the Minister of Health, the Honourable Dr Edwin Dikoloti, who described the project as a demonstration of the government’s dedication to implementation and achievement of the 2020/21 – 2022/23 Economic Recovery and Transformation Plan (ERTP) and the Reset Agenda as championed by the President of of Botswana, Dr Mokgweetsi Masisi. Minister Dikoloti noted Botswana would be able to meet the national demand for medical and industrial gases, significantly reduce its current dependence on imported gases and increase export potential through Oxygas. Achievement of these, he said, would contribute to accomplishment of Botswana’s strategic goals of self-sufficiency, reduction of the import bill and job creation. The minister commend BDC, CEDA and SPEDU for their collaborative effort in bringing a project of such national importance to fruition. Significantly, Minister Dikoloti pledged the government’s support to Oxygas in order to reduce the health sector’s dependence on imported medical gases, particularly oxygen whose shortage at the height of the COVID-19 pandemic proved to be a threat to the survival of Batswana as a people. Oxygas is co-funded by BDC and CEDA. Through a nominated 100 percent owned subsidiary, Western Industrial Estate (Pty) Ltd (WIE), BDC will construct specialised warehouses and ancillary buildings at an estimated cost of P42,6 million . CEDA will finance purchase of the plant, specialised equipment and initial working capital. It is anticipated that the project will create 230 jobs at full operation and 200 jobs being created in the construction phase. [/ihc-hide-content]

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Oxygas to fill a gap as clear as day

Oxygas (Pty) Ltd is a first of its kind project in Botswana as a 100 percent citizen owned company that is setting up a manufacturing industry to make medical gases and industrial gases.

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Oxygas to fill a gap as clear as day

Oxygas (Pty) Ltd is a first of its kind project in Botswana as a 100 percent citizen owned company that is setting up a manufacturing industry to make medical gases and industrial gases.

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