INDUSTRIAL GAS MANUFACTURING (OXYGEN, NITROGEN & ARGON) BUSINESS PLAN

TABLE OF CONTENTS

1.0    EXECUTIVE SUMMARY

1.1    Business Overview

1.2    Industry Background and Opportunity

1.3    Value Proposition

1.4    Mission & Vision Statements

1.5    Business Objectives

1.6    Location Advantage

1.7    Products and Services

1.8    Market Segments and Target Customers

1.9    Competitive Analysis

1.10 Startup Capital Requirements

1.11 Expected Revenue

1.12 Risks and Mitigation Strategies

2.0    COMPANY DESCRIPTION

2.1    Company Name

2.2    Nature of Business

2.3    Company Ownership and Legal Structure

2.4    Vision & Mission Statements

2.5    Corporate Goals & Strategic Objectives

2.6    Unique Selling Proposition (USP)

2.7    Location and Facilities

3.0    BUSINESS ENVIRONMENT ANALYSIS

3.1    PESTEL ANALYSIS

3.2    SWOT ANALYSIS

3.3    Industry Overview in Nigeria

3.4    Market Gap Analysis

3.5    Competitor Analysis

3.6    Customer Analysis

4.0    MARKET ANALYSIS

4.1    Overview of the Nigerian Industrial Gas Market

4.2    Lagos Market Dynamics

4.3    Market Segmentation

4.4    Target Market Summary

4.5    Market Needs & Buying Behaviour

4.6    Competitor Landscape

4.7    Estimated Market Size & Revenue Potential

5.0    MARKETING STRATEGY

5.1    Branding Strategy

5.2    Product Pricing Strategy

5.3    Distribution Strategy

5.4    Sales Strategy

5.5    Promotion & Advertising Strategy

5.6    Customer Retention Strategy

5.7    Expansion Strategy

6.0    TECHNICAL & PRODUCTION PLAN

6.1    Overview of Production Technology

6.2    Plant Capacity and Production Output

6.3    Detailed Production Process

6.3.1 Oxygen Production Process (PSA Technology)

6.3.2 Nitrogen Production Process (PSA Technology)

6.3.3 Argon Production Process (Cryogenic + Purification)

6.4    Equipment and Machinery Requirements

6.5    Technical Staffing Requirements

6.6    Plant Layout and Infrastructure Requirements

6.7    Production Schedule and Workflow

6.8    Quality Assurance Protocols

6.9    Safety Measures and Compliance Standards

6.10 Raw Material Requirements

6.11 Power Supply Strategy

6.12 Maintenance Plan

6.13 Production Cost Analysis

7.0    ORGANIZATIONAL STRUCTURE & MANAGEMENT PLAN

7.1    Organizational Philosophy

7.2    Organizational Structure

7.3    Management Roles & Responsibilities

7.3.1 Managing Director / CEO

7.3.2 Operations Manager

7.3.3   Production Supervisors

7.3.4   Maintenance / Mechanical Engineers

7.3.5   Quality Assurance / Laboratory Manager

7.3.6   HSE (Health, Safety & Environment) Officer

7.3.7   Sales & Marketing Manager

7.3.8   Finance & Accounts Manager

7.3.9   Admin / HR Manager

7.3.10 Logistics & Distribution Supervisor

7.3.11 Security Personnel

7.4    Staffing Plan and Required Personnel

7.5    Human Resource Policies

7.5.1 Recruitment Policy

7.5.2 Training & Development Plan

7.5.3 Health, Safety & Environment Policies

7.5.4 Employee Welfare Measures

7.6    Management Information System (MIS)

7.7    External Advisors/Professional Support

8.0    FINANCIAL PLAN

8.1    Key Assumptions

8.2    Startup Capital Requirement (CAPEX)

8.3    Monthly Operating Expenses (OPEX)

8.4    Revenue Forecast (Monthly)

8.5    5-Year Financial Projection

8.6    Profit & Loss Forecast (Annual)

8.7    Break-Even Analysis

8.8    Cash Flow Forecast (Year 1)

8.9    Return on Investment (ROI)

9.10 Funding Plan

9.0    RISK ANALYSIS

9.1    Operational Risks

9.2    Financial Risks

9.3    Market Risks

9.4    Regulatory and Legal Risks

9.5    Environmental Risks

10.0 SUSTAINABILITY STRATEGY

10.1 Environmental Sustainability

10.2 Economic Sustainability

10.3 Social Sustainability

11.0 EXIT STRATEGY

11.1 Trade Sale to Larger Industrial Gas Companies

11.2 Management Buyout (MBO)

11.3 Initial Public Offering (IPO)

11.4 Asset Sale

11.5 Succession Planning

1.0 EXECUTIVE SUMMARY

1.1 Business Overview

This business plan presents the establishment of PrimeGas Nigeria Limited, a small–medium scale Industrial Gas Manufacturing Plant located in Lagos State, with siting preference around Amuwo-Odofin / Ojo / Badagry Industrial Corridor due to land affordability, proximity to major highways, and access to customers in manufacturing, welding, hospitals, laboratories, marine services, and construction sectors.

PrimeGas Nigeria Limited will produce and supply high-grade industrial gases, specifically:

• Medical & Industrial Oxygen (O₂)
• High-Purity Nitrogen (N₂)
• High-Purity Argon (Ar)
• Associated gas mixtures (O₂-Acetylene welding mix, O₂-Argon blend for TIG welding, Nitrogen for food packaging, etc.)
• Cylinder refilling, sales, and maintenance services

The plant aims to operate initially at a capacity of 30 cylinders/hour, expandable to 100 cylinders/hour within three years. Production technologies will include cryogenic air separation, PSA (Pressure Swing Adsorption) systems, and industrial-grade gas purification units.

1.2 Industry Background and Opportunity

The Nigerian industrial and medical gas market is experiencing rapid expansion driven by:

1. Growth in welding & fabrication workshops
2. Increased demand from hospitals (post-COVID era oxygen shortages)
3. Expansion of food processing industries using nitrogen for packaging
4. Growing metal/steel and construction industries
5. Increasing use of argon in CNC welding, automobile repair, and aluminum works

Nigeria currently imports a significant portion of its argon and high-purity gases, creating a huge supply gap that presents opportunities for local producers.

In Lagos alone, the estimated annual demand for oxygen, nitrogen, and argon exceeds 500,000 cylinders across medical, industrial, and commercial segments. With new SMEs in welding, factories in Free Trade Zones, and hospitals expanding, the market is projected to grow at 12–18% per annum.

PrimeGas Nigeria Limited intends to position itself as a local producer offering high-purity, reliable, affordable manufactured gases with efficient delivery logistics.

1.3 Value Proposition

PrimeGas Nigeria Limited will differentiate itself through:

• High purity gases (99.5% – 99.9%)
• Competitive pricing compared to imported or distant suppliers
• Fast delivery via branded trucks
• Cylinder leasing model to support SMEs
• 24/7 availability for medical emergencies
• Long-term supply contracts with hospitals and industries
• Strict quality control and calibration testing

1.4 Mission & Vision Statements

Mission:
To provide high-quality, safe, and affordable industrial and medical gases that support manufacturing, healthcare, research, and economic growth in Lagos State and Nigeria.

Vision:
To become one of Nigeria’s top three indigenous industrial gas manufacturers within ten years, known for reliability, safety, and innovation.

1.5 Business Objectives

Short-Term Objectives (Year 1–2):

• Establish a 30-cylinder/hour gas plant
• Build customer base of 300+ welding workshops and 50+ hospitals
• Achieve monthly revenue of ₦25–₦40 million
• Secure regulatory approvals from SON, DPR, NAFDAC (medical oxygen), FMEnv

Medium-Term Objectives (Year 3–5):

• Expand to 100-cylinder/hour capacity
• Operate a fleet of 4 gas delivery trucks
• Launch branch refilling depots in Ikeja, Lekki, Ibadan
• Enter gas mixture and calibration gas markets
• Export gases to West African markets through Lagos ports

1.6 Location Advantage

Proposed plant location: Ojo / Amuwo Odofin Industrial Cluster

Benefits:

• Close to Apapa/Badagry Expressway for distribution
• Availability of cheaper industrial land
• Proximity to hospitals and industrial customers in Festac, Okokomaiko, Badagry
• Closer to suppliers of cylinders, valves, compressors, and steel fabricators
• Availability of technical manpower

1.7 Products and Services

A. Primary Products

1. Industrial Oxygen (O₂)
2. Medical Oxygen (per NAFDAC & WHO standards)
3. Nitrogen Gas (Food & Industrial Grade)
4. High-Purity Argon (for welding & aluminum works)

B. Secondary Products

• Calibration gas mixtures
• Welding shielding gases
• Cylinder accessories (regulators, hoses, nozzles)
• Dry ice (optional expansion in Year 3)

C. Services

• Cylinder refilling
• Cylinder hydro-testing and recertification
• Delivery logistics
• Cylinder leasing subscription service

1.8 Market Segments and Target Customers

PrimeGas will serve:

1. Medical Sector

• General hospitals
• Specialist hospitals
• Private clinics
• Medical laboratories

2. Industrial Sector

• Welding and fabrication workshops
• Automobile body repair shops
• Steel/metal industries
• Food and beverage industries
• Marine engineering workshops
• Construction sites

3. Commercial Sector

• Gas retailers
• Gas distributors
• Research institutions

1.9 Competitive Analysis

Current competitors include Air Liquide, BOC Gases, and several local refillers. However, these have limitations:

• High prices
• Longer delivery times
• Inconsistent availability
• Limited presence in Ojo–Badagry axis
• Insufficient supply of argon and nitrogen

PrimeGas will fill this gap by offering:

• Lower prices (10–15% cheaper)
• 24-hour availability
• Scientific-grade purity testing
• Aggressive retail depot expansion

1.10 Startup Capital Requirements

A small-medium industrial gas plant requires substantial capital. Initial estimated cost:

(Full detailed financial model will appear in Batch 7.)

1.11 Expected Revenue

Based on conservative capacity:

• Oxygen cylinder retail price: ₦6,500–₦8,500
• Nitrogen cylinder: ₦8,000–₦12,000
• Argon cylinder: ₦25,000–₦30,000

If plant fills 100 cylinders/day:

• Average selling price (mixed gases): ₦12,000
• Monthly revenue (26 working days):
  100 × ₦12,000 × 26 = ₦31,200,000
• Annual revenue: ₦374,400,000

Profit margin expected: 25–35%

1.12 Risks and Mitigation Strategies

2.0 COMPANY DESCRIPTION

2.1 Company Name

PrimeGas Nigeria Limited

A private limited liability company duly registered under the Corporate Affairs Commission (CAC), focusing on industrial, medical, and specialty gas manufacturing.

2.2 Nature of Business

PrimeGas Nigeria Limited will operate a small–medium scale industrial gas plant engaged in:

1. Production of High-Purity Oxygen (Medical & Industrial Grade)
2. Production of High-Purity Nitrogen (Food, Laboratory & Industrial Grade)
3. Production/Purification of Argon Gas (Welding & Shielding Grade)
4. Gas Cylinder Filling, Testing & Recertification
5. Distribution and Sales of Industrial Gas Supplies & Equipment

Supporting services include:

• Gas pipeline installations for hospitals
• Cylinder leasing programs
• Maintenance of gas systems for industries
• Emergency oxygen supply for clinics and ambulances

2.3 Company Ownership and Legal Structure

PrimeGas Nigeria Limited will be structured as a Private Limited Liability Company (Ltd) owned by two shareholders:

• Founder/Managing Director – 60% equity
• Technical Director – 40% equity

This structure:

• Limits personal liability
• Eases access to bank loans & government grants
• Allows for future expansion into a conglomerate
• Ensures clear corporate governance

The company will comply with:

• CAC regulations
• NEPC (for future export)
• Department of Petroleum Resources (DPR)
• NAFDAC (for medical oxygen)
• SON (Standards Organisation of Nigeria)
• Federal Ministry of Environment (FMEnv)

2.4 Vision & Mission Statements

(Included again here for clarity in this chapter, with expanded explanation)

Vision Statement

To become one of Nigeria’s leading indigenous manufacturers of high-purity gases, known for safety, reliability, innovation, and consistent supply across West Africa.

Mission Statement

To manufacture high-quality industrial and medical gases that meet global standards while ensuring affordability, operational safety, and timely delivery to customers in healthcare, manufacturing, construction, and research sectors.

2.5 Corporate Goals & Strategic Objectives

Short-Term (Year 1–2)

• Successfully install and commission a 30–40 m³/hr PSA oxygen plant.
• Penetrate the Lagos industrial belt (Ojo, Festac, Amuwo, Badagry, Mushin).
• Establish supply contracts with 50+ hospitals and 300+ welding/commercial users.
• Develop a nationwide distribution network for cylinders.
• Achieve minimum monthly sales of ₦25–₦40 million.

Medium-Term (Year 3–5)

• Expand capacity to 100 m³/hr oxygen and nitrogen.
• Begin argon production/purification for advanced welding industries.
• Open 3 regional depots (Lagos Island, Ibadan, Ogun State).
• Launch calibration and gas mixture service lines.
• Introduce cryogenic storage technology.

Long-Term (5+ Years)

• Export specialty gases to West African markets.
• Build a large cryogenic air separation unit (ASU).
• Establish training academy for gas safety and handling.

2.6 Unique Selling Proposition (USP)

PrimeGas stands out in the industry due to:

• Consistent gas purity: 99.5%–99.99%
• Fast emergency response for hospitals
• Affordable cylinder leasing for SMEs
• Guaranteed availability (24-hour operations)
• Strict safety compliance
• Coverage of the underserved Ojo–Badagry corridor
• Lower transportation cost due to plant proximity

2.7 Location and Facilities

Proposed Location:

Ojo / Amuwo-Odofin Industrial Cluster, Lagos State

Reasons for choosing this location:

1. Cheaper land/warehouse rent compared to Ikeja or Apapa
2. High concentration of welding shops
3. Proximity to hospitals and clinics
4. Easy access to Apapa–Badagry Expressway for distribution
5. Close to marine engineering hubs
6. Lower competition in the axis
7. Reliable access to skilled labour

Facility Components

The plant will include:

• Production hall (PSA/Nitrogen/Argon units)
• Compressor room
• Cylinder storage area
• Control room
• Quality testing laboratory
• Fire safety & suppression systems
• Administrative block
• Loading bay
• 100 KVA generator & solar hybrid system

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