Positioning Malaysia As A Global Leader In Industrial Gases

Industrial gases, often regarded as the ‘unsung heroes’ of the manufacturing sector, have long served as the backbone of diverse industries. Over time, the role of industrial gases has expanded beyond basic support to become a critical enabler of innovation and efficiency in the manufacturing sector. Produced through air separation processes, the industrial gases market, which is traditionally dominated by common gases like oxygen, nitrogen, argon, and carbon dioxide, has undergone a significant transformation. Today, there is an increasing demand for high-purity specialty gases and precision engineering gas mixtures, which are crafted to meet the stringent and evolving standards of advanced industries.

The global industrial gases market, valued at approximately USD99 billion in 2023, is projected to grow at a compound annual growth rate (CAGR) of 5.3% from 2024 to 2034. In contrast, the specialty gases market was valued at approximately USD12 billion in 2024 with a healthy CAGR of 6%. This growth is driven by surging demand in the manufacturing sector, notably in semiconductors, petrochemicals, food and beverage, metals, and healthcare, particularly in developing economies across the Asia Pacific region.

In Malaysia, the industrial gases market is projected to grow at a CAGR of 6.3%, underpinned by robust demand across sectors such as metal fabrication, oil and gas, food processing, healthcare, and semiconductor manufacturing. Currently, there are more than 10 industrial gases manufacturers producing a wide range of high-purity gases with purities ranging from 99.5% to 99.9%.

As Malaysia advances its manufacturing sector, especially in semiconductor fabrication, aerospace, medical devices, and green technologies, the demand for industrial gases has charted a parallel surge. A consistent and reliable supply of high-purity gases has become paramount to maintain precision in processes. Reducing dependency on imports is essential to mitigate supply disruptions and enhance cost efficiency, thereby boosting the competitiveness of Malaysian businesses in the global market.

Local players in Malaysia’s industrial gases sector have established a niche by leveraging innovation, sustainability and strategic partnerships. Among the key players, Ace Gases Sdn. Bhd., wholly owned by Kelington Group Berhad, has carved its prominence in the specialty gases landscape. The company’s core strength lies in its technological edge and integrated supply chain capabilities, supporting critical sectors such as electronics, semiconductors, food & beverage and oil & gas.

Ace Gases has ‘aced’ its way to becoming one of Malaysia’s largest Liquified Carbon Dioxide (LCO₂) manufacturers and a specialised provider of total gas solutions. The company offers industrial and specialty gases, as well as engineering services for gas pipelines, on-site generation, and equipment installation.

Due to its low thermal conductivity and non-conductive properties, fibreglass serves as an excellent insulator. It is increasingly used in electrical housings, high-voltage environments, and thermal barriers, where heat resistance and electrical safety are crucial.The core of Ace Gases’ business centres on innovation in CO₂ recovery, transforming industrial waste gases into ISBT-certified food-grade LCO₂ and Halal-certified dry ice. The first CO₂ recovery plant in Kerteh, Terengganu, began operations following a long-term raw CO₂ supply agreement with a major upstream gas processing facility. In 2024, the company launched its second plant in Kerteh, expanding total capacity to 125,000 tonnes per year. This is complemented by a dry ice production facility in Shah Alam, alongside regional expansion to Singapore, India, Indonesia, and the Philippines, enabling wider export activities.

Ace Gases also designs, owns, and operates on-site gas production facilities, supplying an uninterrupted, ultra-high purity supply of Nitrogen (N₂), Oxygen (O₂) and Hydrogen (H₂) gases for the electronics and semiconductor industries. Its on-site generation model eliminates the need for fuel-consuming deliveries, contributing to lower emissions and enhanced environmental sustainability. The company also offers a Build-Own-Operate (BOO) model, allowing new investors to avoid upfront capital expenditure. This flexible structure enables manufacturers to focus on core operations while Ace Gases ensures reliable gas supply and full facility management.

With a wide distribution network across Asia Pacific, Ace Gases is able to ensure consistent quality and secure delivery of critical electronic gases, which are essential to the electrical and electronics (E&E) sector. Its customer base includes global technology leaders from the optoelectronic semiconductor, solar cells, and modules segments.

Through continuous investment in infrastructure, technology, and green innovation, Ace Gases is committed to ‘delivering innovation in every molecule’, helping to position Malaysia at the forefront of the global industrial and specialty gas supply chain.¹

Malaysia’s industrial and specialty gases sector is poised for growth, aligning closely with the nation’s strategic frameworks, particularly the Chemical Industry Roadmap (CIR) 2030 and the New Industrial Master Plan (NIMP) 2030. Specialty gases are identified as pivotal enablers for high-value downstream industries, including electronics, petrochemicals, and advanced materials. In this context, the Malaysian Government is committed to advancing this niche sector to fortify a resilient industrial ecosystem, not only within Malaysia but also across the ASEAN region, amidst the challenges posed by global supply chain uncertainties.

To know more about the business potential and Government’s facilitation for the investment journey in this segment, contact the Chemical and Advanced Materials Division at https://www.mida.gov.my/staffdirectory/chemical-and-advanced-material/.

¹To learn more about Ace Gases Sdn. Bhd., visit www.acegases.com.