IGR Consultants as a trusted financial planner in Delhi, has a team of veterans from the financial field utilizing their expertise for guiding our clients in formulating strategic plans for making the most out of their investments. Our services as start-up investment consultants in Delhi, with an extended presence in other cities, enables our services to stretch into assisting start-ups with their financial planning and investment, a crucial component for the optimal operation of any start-up. We also keep you updated with the recent development in the Indian market to keep you abreast with what's happening. With this, let's get into the details of the surge in demands for oxygen plants in India during the pandemic.
The second wave of pandemic brought an unprecedented crisis of shortage of oxygen in hospitals for patients leading to a considerable number of medical difficulties. Healthcare institutions were suffering and reeling under the pressure of a short supply of oxygen cylinders or maintaining that supply. This somehow turned the wheel of manufacturing and supply of oxygen which went from being a top surplus commodity to extremely scare due to it becoming a life-saving tool during the pandemic. The manufacture and supply of oxygen became highly prioritized by the government for meeting the demands that were going unfulfilled.
Even industrial oxygen, which is deemed not optimal for human use due to impurities, has also been directed towards healthcare institutions to control the fatality of the outbreak after proper purification. At present, India has three major types of oxygen sources, namely air separation units ( ASU), oxygen concentrator and pressure swing adsorption ( PSA)s. While ASU is used for commercial purposes, PSAs have relevance as operational on a medium scale, whereas oxygen concentrators are used to manufacture oxygen in small places such as one's room or house.
After India witnessed a massive shortage of oxygen amidst the surge of covid cases, the government took the initiative to develop or set up nearly 551 dedicated PSAs premised at public healthcare facilities and funded by PM CARES fund in the hope to bring down the severity of the situation and meet the oxygen demands.
The workings of the PSA plant
PSA plant can have different capacity for manufacturing oxygen, which works on the principle of absorbing ambient air and then storing or concentrating oxygen for diversion and supply to healthcare institutions. Thus, allowing oxygen supply to be maintained through a direct pipeline connection or compressed in cylinders to be transported. The level of concentration of oxygen for it to be medical grade is 90 to 96 per cent, wherein the rest is nitrogen and argon. The oxygen generated with this principle is deemed to be less pure than what is manufactured by cryogenic technology; however, it serves as a relief during times when the supply of oxygen has become difficult due to reasons such as inflammability.
The associated cost of setup
The capacity of the plant dictates the cost of the setup of the PSA oxygen plants, but from its implementation, it has been ascertained that the initial investment is eventually offset by the monthly oxygen bills of the hospital.
Last year the Central Medical Services Society (CMSS), which an independent body under the Ministry of Health and Family Welfare, had invited tenders for 150 oxygen plants in the capacity ranging from 100-3,200 litres per minute (LPM) which would have contributed to a total capacity of 80,500 litres per minute. It is worthy of noting that a plant that can constitute the supply of oxygen up to 24 cylinders per daywould require a setup investment of Rs 33 lakh and few weeks for completion.
A hospital that has a setup of 40 ICU beds would approximately warrant an investment of Rs 50 lakh for setting up the PSA plant to meet its oxygen demand which has skyrocketed during the pandemic. However, the investment recovery can happen anywhere between 18-20 months, taking into consideration the monthly savings from oxygen bills.
Businesses are seeking out approvals from the state government for setting up oxygen plants considering the dire need and demand for it in the present scenario, the applications for which are being prioritized. However, the waiting time has increased due to the lack of technical experts or personnel who can contribute to setting up these plants.
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