Industrial gases major Linde is planning to introduce its cryogenic food preservation techniques in the Indian market. In an interview to BusinessLine, Moloy Banerjee, Head, South Asia of Linde’s Gases division, elaborated his plans to attract start-ups in food processing, and why the new business will reduce Linde’s dependence on the steel sector.
Did steel let you down in 2015?
Definitely it was not a very bright year (Linde follows the calendar year). Steel contributes nearly four-fifth of our gases business. We have made huge investments based on certain expectations on steel and manufacturing. A lot of it hasn’t happened.
How much did you invest in India in over the past five years and what is the share of steel industry?
We invested nearly ₹2,500 crore in the last four-five years, of which nearly 80 per cent went to the steel sector. The major one — a ₹600-crore air-separation plant at Kalinaganagar Tata Steel facility — is in the process of being commissioned.
You have been talking about reducing your dependence on steel for quite some time. Are you making any move in that direction?
We are serious about broadening our business exposure in the non-metals segment as part of our growth strategy in India. We are now working with the Andhra Pradesh government for a focused entry into modern cryogenic food preservation technology (also known as IQF freezing technology) that is not yet in use in India.
Linde is one of the largest providers of these solutions to major seafood exporting nations like Thailand and Malaysia. We are also participating in the Make in India summit to popularise the technology.
How is it going to make a difference in India’s seafood or processed food sector?
Cryogenic freezing helps retain the freshness of the products that fetches a premium in major markets like South Korea and Japan. India, particularly AP, also exports a lot of seafood but mostly in the lower end of the market, due to lack of access to preservation technology.
How do you plan to go ahead with this initiative?
We are in discussion with the AP government to set up a demonstration lab, somewhere near the Bhimavaram fishing harbour, where we will bring in the freezing tunnel to showcase the technology. We are also trying to offer classroom training to create skilled manpower that is essential for the business ecosystem. We are particularly hopeful of attracting the interest of start-ups in the food processing sector. This solution is a natural fit for them as it doesn’t require a lot of infrastructure. We are open to the possibilities of working with them in preparing business models or providing equipment on a lease basis to minimise the investment.
The Andhra Pradesh government is very supportive. We are in talks with it for some (financial) support.
What about the prospects in healthcare?
Healthcare is recession proof and is growing at a fast pace. Right now it contributes less than 10 per cent of our gases business turnover. But it is high on profitability and its share of total business is increasing.
How is the outlook in neighboring economies?
I look after India, Sri Lanka, Pakistan and Bangladesh. Leaving India aside, Pakistan and Sri Lanka are more affected by the global downturn. The impact is more in Pakistan.
But Bangladesh is throwing up a lot of opportunities, particularly from the infra spend (against the Indian line of credit). It’s a small market but buzzing with activity.
Source: The Hindu Business Line