LAUGFS acquires Bangladeshi LPG Company
View(s):LAUGFS Gas PLC, said to be one of the most aggressively growing Sri Lankan energy company, has acquired one of the largest LPG downstream companies in Bangladesh, the local firm’s first overseas acquisition.
From left - Lee Wan Soon - Director-PEL, Klaus Francis Paul Gohra - Managing Director (Outgoing) of PEL, W. K. H. Wegapitiya - LAUGFS Holdings Group Chairman and Thilak De Silva – LAUGFS Holdings Group Managing Director.
LAUGFS Gas PLC acquired controlling interests of Petredec Elpiji Ltd (PEL), at an investment of US$18.75 million and became the first Sri Lankan energy brand to become a multinational.
Petredec Elpiji Ltd was one of the first to enter the downstream LPG business in Bangladesh during 1997, and was later acquired by Australian energy giant Kleenheat Australia, Laugfs said in an announcement on Monday.
PEL is a dominant player in the Bangladeshi LPG industry with over 21 per cent market share and operates with a modern LPG import facility in Mongla Port area. With the acquisition of a 69 per cent stake of Petredec Elpiji, LAUGFS will commence its operations in Bangladesh strengthening its presence in the Power and Energy sector beyond national borders.
“With this acquisition, the growth opportunities for LAUGFS Gas PLC catapults to a level that is several fold more than with the exiting local market. This also propels the entity into a different league and will open doors for far greater business expansion in the region and globally over the coming years. The distribution of business risk and better economies of scale in supply chain management in association with LAUGFS’s maritime business where two LPG vessels are in operation, is expected to give cutting edge efficiencies thus propelling a growth momentum that goes beyond the domestic norms,” the company said in a media release.
With over 160 million population, Bangladesh has been identified as one of the most lucrative emerging markets in South East Asia.
“We see tremendous potential for expanding LPG as a domestic and commercial energy source in Bangladesh. The country’s economy is expected to show robust growth with a 7 per cent GDP growth forecasted by the IMF, signalling rising disposable income in the domestic market. The gap between supply and demand in terms of commercial energy needs is also increasing with their natural gas reserves now depleting at a fast pace,” remarked W.K.H. Wegapitiya, Group Chairman of LAUGFS.
“The acquisition of PEL will mark an important milestone in our global expansion plans. We will soon disclose our next move to a few other Asian markets. We are aggressively working on it, however, it is too early to disclose in detail,” he stated.Thilak De Silva, the Group Managing Director of LAUGFS, said the acquisition comes at a time when the group celebrates 20 years in business, “enabling us to take a leap from a mere home-grown business to a multi-national, and strengthen our energy presence across the region”.
Petredec Elpiji Ltd is one of the largest LPG distributors in Bangladesh with its LPG downstream businesses in industrial and wholesale, commercial, domestic and autogas segments. It currently operates its plant at Port Mongla, distributing over 22,000 MT of LPG per annum through its extensive distribution network.