Chennai: Every time the huge empty ISO tank goes to Singapore for filling with the hydro fluorocarbon (HFC) gas, young Anil Jain, managing director, Refex Refrigerants Limited feel elated. For the tanks not only come filled with gas but also with profits.

According to him the domestic market for the HFC gas is at a high. "The demand growth is whopping 500 per cent." However, a clear demand figure is not available.

Cashing on the demand increase, Jain is planning to expand his Rs16-crore, 40-tonne per month (tpm) HFC storage and refilling facility near Chennai to 250 tpm at an investment of Rs40 crore. The company will be doubling its cylinder strength to 10,000 soon.

"In terms of revenue the 250-tonne facility would fetch a turnover of Rs140 crore at the current prices." A refilling facility near Delhi is also being planned. Closing last year with a turnover of Rs11 crore, Refex Refrigerants is targetting a revenue of Rs60 crore this year.

Jain has already identified bulk clients to take care of the existing and the proposed capacity. According to him, Refex Refrigerants will soon start catering to Hyundai Motors' requirements. The carmaker has decided to expand its facility near Chennai.

Other carmakers like General Motors India and Hindustan Motors Limited too have approved his product. "Each car air conditioner requires between 600 grams to1kg of gas. "Car manufacturers like Hyundai and Maruti have expressed their plans to increase their production. The market for our gas is bright," says a beaming Jain.

HFC gas has come to fill the vacuum left by the ozone-depleting chlorofluorocarbon (CFC) and hydro chlorofluorocarbons (HCFC) now being phased out in Europe. The gas is used in cooling equipments like air conditioners, refrigerators, deep freezers, water coolers and others.

The market is divided into two segments — original equipment manufacturers or OEMs of air conditioners, refrigerators and others and the trade and services segment. The latter has one more sub division — the conversion market, that is, CFC-filled equipment being converted to other gases. Today the service segment uses Freon 12 for compressors and refrigerator and Freon 22 for air conditioners.

While OEMs bring out their products filled with HFC gas, it is the service and the conversion segment that offers huge potential.

Targetting the refrigerator trade / services segment, Jain has a tie-up with Godrej to market the gas at its 380 centres. "Godrej wants 15 tonne per month," he adds. The tie-up apart Refex Refrigerants also targets the refrigerator, car mechanics.

The company offers different supply solutions for different market segments. In the case of trade and service segment, Refex Refrigerants will supply the gas in 10kg, 25kg and 65kg cylinders. Foe OEMs supplies Refex will use one-tonne cylinders, or if the client wishes, even manage a storage cylinder at its manufacturing establishment.

Will the refilling business attract more competitors if the potential is huge? Jain says gas source is a major entry barrier. "There are around eight HFC manufacturers in the world. While some manufacturers are not willing to sell to India, others already have their tie-up. In addition finding experienced people to man the refilling plant is very difficult. So the threat of new refillers is not big," says Jain.

Incidentally Refex Refrigerants' Singapore promoter, Kaltech Engineering & Refrigeration Pte Ltd, is one of the largest traders of HFC gas. "Last year Kaltech Engineering sourced 8,300 tonnes of HFC, which thios year is targeted to increase to 12,000 tonnes," Jain adds.

In India there are only three HFC manufacturers — SRF Limited, Navin Fluorine and Gujarat Fluorochemicals — so imports meet the demand.

Despite organisations like Greenpeace saying that HFC is harmful to the environment and should be replaced with alternatives like hydrocarbons, the HFC market should steady But it is going to be a long way for that to be implemented in India as the time to phase out CFC is there till 2010.