KUALA LUMPUR (Aug 5): Kelington Group Bhd (KL:KGB) plans to invest about RM120 million to build an air separation plant in Maharashtra, India, as it expands its industrial gas business.

The plant will be able to produce up to 300 tonnes per day of oxygen, nitrogen and argon for industrial customers, the company said in an exchange filing on Wednesday. The gases are used in industries ranging from electronics to pharmaceuticals and from metallurgy to food processing.

"The establishment of a local plant positions Kelington to capture rising demand from customers seeking reliable and locally available industrial gases," said CEO Lim Seng Chuan.

Maharashtra, the richest state with the largest economy in India, is home to the country’s central bank and stock exchanges as well as industrial bases of Tata Steel, Reliance Industries and Bajaj Auto.

The plant, to be built on a 20,000 sq m site, is also expected to serve customers across key industrial clusters in the neighbouring markets.

Construction is expected to begin this month and targeted for completion by the third quarter of 2028, subject to regulatory approvals. The development will also include supporting infrastructure, utilities, storage facilities and distribution systems.

Kelington said the investment would strengthen its recurring revenue base through merchant gas sales and enhance long-term earnings visibility while diversifying its geographical presence. The project will be funded through a combination of internally generated funds and bank borrowings.

Kelington’s shares settled up three sen or 0.3% to RM8.75 on Wednesday, giving the group a market capitalisation of RM7.72 billion.