Continuing where we left off in the last blog, in this edition let’s see whether the Oxygen business will be a seasonal boom or a consistent profit-generating business plan.
Currently, the high demand for mechanical ventilators is resulting in a significant shortage of these devices in key countries affected by the COVID-19 outbreak. The unmet demand for mechanical ventilators is forcing biomedical engineers and scientists to create makeshift ventilators using respiratory devices such as PAP, manual resuscitators, nebulizers, oxygen concentrators, and others. This is acting as a pivotal factor for the growth of the medical oxygen market in recent times.
But what happens after Covid? It is quite natural to wonder whether the same business can be a profitable business plan after the pandemic. Far-sightedness is crucial to run a successful venture.
Let’s look at how and if this Oxygen business will prove to be a surplus-yielding project finance model.
Oxygen Market Size
The global medical oxygen market was valued at $4572.39 million in 2020 and is forecasted to grow at a CAGR of 7.02% to reach $6712.32 million by 2026. It is driven by the growing prevalence of respiratory diseases among the population like COPD which we discussed in the last article.
In addition to this, high growth in the geriatric population is anticipated to positively impact the growth of the market during the forecast period. Furthermore, the increasing requirement for home healthcare facilities is further expected to bolster the growth of the market over the next few years.
The global medical oxygen market is segmented based on form, purity, technology, application, etc. Based on form, the market can be categorized into compressed, liquid oxygen, oxygen concentrators, and others.
Out of these, the liquid oxygen segment is expected to dominate during the forecast period. This dominance can be attributed to the rising prevalence of COPD across the world. Liquid oxygen is also highly effective in increasing the amount of oxygen in the body to healthy, normal levels, which is further expected to create more opportunities for segmental growth over the coming years.
Oxygen Usage in the Industry
The industrial and medical gases industry serves a very large number of customers in the whole community. Industrial gases are essential for almost all kinds of manufacturing. Large quantities of oxygen are used in the basic and infrastructural industries.
Let’s take a closer look at where oxygen is used.
- Manufacturing Metals
The largest user of oxygen is the steel industry. Modern steelmaking relies heavily on the use of oxygen to enrich air and increase combustion temperatures in the blast and open-hearth furnaces. Oxygen is used to allow greater use of scrap metal in electric arc furnaces. Large quantities of oxygen are also used to make other metals, such as copper, lead, and zinc.
Oxygen enrichment of combustion air, or oxygen injection through lances, is used to an increasing extent in furnaces, smelters for glass and mineral wool, aluminum, and lime and cement kilns. It is used to enhance their capacity and reduce energy requirements.
- Chemicals, Pharmaceuticals and Petroleum
Oxygen is used as a raw material in many oxidation processes, including the manufacture of ethylene oxide, hydrogen peroxide, and many more.
Very large quantities of oxygen are used in coal gasification — to generate a chemical feedstock or precursor for more easily transported and easily-used fuels.
In refineries, oxygen is used to enrich the air feed to catalytic cracking regenerators, which increases the capacity of the units. Oxygen is also used to regenerate catalysts. It is used to destroy hazardous waste material in incinerators.
- Glass and Ceramics Industry
Conversion of combustion systems from air-fuel to oxy-fuel (and construction of new furnaces and tanks around this technology) results in better control of heating patterns, higher furnace efficiencies (lower fuel consumption,) and reduction in particulate and NOx (Nitrogen Oxide) emissions.
- Pulp and Paper Manufacturing
Oxygen is increasingly important as a bleaching chemical. While manufacturing high-quality bleached pulp, oxygen is used instead of chlorine in the bleaching process to reduce water pollution. Using oxygen in this process also helps in lowering costs.
In a chemical pulp mill, oxygen increases the production capacity of the soda recovery boiler and the lime-burning kiln. The use of oxygen in black liquor oxidation reduces the discharge of sulphur pollutants into the atmosphere.
- Health Care
In medicine, oxygen is used during surgery, intensive care treatment, inhalation therapy, etc. Oxygen is typically supplied to hospitals through bulk liquid deliveries and then distributed to usage points. It assists with respiratory problems, saving lives and increasing patient comfort.
Small portable non-cryogenic air separation units are gaining wide use in home care. Non-cryogenic air separation technology is utilized in small and/or remote hospitals where demand is high enough but cylinder delivering is a logistical problem and liquid deliveries are unavailable or a costly affair. These units typically produce 90 to 93% purity oxygen, which is adequate for most medical uses.
In the biological treatment of wastewater, the use of oxygen instead of air permits increased capacity in existing treatment plants. Injecting oxygen into sewers reduces hydrogen sulphide formation, which results in reduced corrosion and odour. Oxygen is used for drinking water treatment, in particular, when alternatives such as chlorine are undesirable.
We saw a multitude of industries that can serve as a business opportunity even after the world has relieved itself from the vice-grip of the pandemic.
So to answer the awaited question of whether the Oxygen business plan will be profitable or not after Covid, we leave it unto you to decide. There are ample chances for the business to grow. But whether to consider it as an option is your choice!
We at Mantraa endeavor to back our services with extensive research when required so you can move ahead with your business plan smoothly. Risk advisory services, business plan consulting are among the plethora of services that we offer.
In the next article, look forward to seeing how some Indian corporate giants have been contributing to fight the pandemic and tackle the oxygen crisis.