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rench-based Air Liquide, the world’s largest gas supplier for industrial, health and environmental services, will further invest Rp 500 billion (US$53 million) to boost its production capacity and expand its distribution network in Cilegon, Banten, this year amid increasing demand for industrial gas in the region.

The new investment would add to another investment totaling Rp 700 billion that the firm made earlier this year, and would help the firm double its production capacity to 2,000 tons per day (tpd) of gaseous and liquid oxygen, nitrogen and argon, Air Liquide Indonesia president director Xu Yan said on Tuesday.

In March, the firm announced its plan to build an air separation unit in Cikarang, West Java, that would be capable of producing 2,000 tpd of industrial gases and supply the energy for Indonesia’s second-biggest steel maker, Gunung Steel Group (GSG).

“This new investment will further strengthen Air Liquide’s position as the leading industrial gas supplier in Indonesia and demonstrates our long-term commitment to our growing presence here,” he said in a statement.

Marketing director Maulana Himawan said that the higher production capacity would allow the firm to supply more gas to steel and petrochemical firms in the Cilegon region, including the nation’s largest steel producer Krakatau Steel, chemical firm Asahi Mas Chemical, and major petrochemical firm Chandra Asri.

“Last year and this year, we renewed our contracts with our customers, which mostly will last for 15 years. That means we’ll need additional supply to cope with rising demand in the long term,” he told The Jakarta Post.

The increased gas supply also aimed to anticipate a surge in demand due to several new investments in the steel and petrochemical industry, including a blast furnace project by Krakatau Steel and a steel plant jointly built by Krakatau Steel and South Korea’s steel giant Posco, Maulana added. The first delivery of gas derived from the plant currently under construction would be made in the second semester of 2013, according to the firm.

In addition to selling gas to the steel and petrochemical industry, Air Liquide will also allocate gas for other sectors in the area. The firm plans to devote 70 percent of this allocation to the automotive industry, with the remaining 30 percent split between the food and beverage and secondary chemical industriesy, according to Maulana.