Japan’s Saisan to start LPG sales in India

Market: LPG
04/09/19

Japanese LPG firm Saisan is planning to start its wholesale and retail business in India from next month, taking advantage of an expected rise in demand, as Japan's sliding domestic demand prompts the company to expand its overseas sales.

Saisan has agreed with its Indian partner Ranjit Choudhary to launch the joint venture firm Gas One Energy India Private (GOEI), taking over India's LPG wholesale and retail firm Divine Enterprises. Saisan will take a 51pc stake in GOEI, with the remaining shares held by Choudhary.

GOEI plans start operations next month, supplying LPG for the industrial, commercial and household sectors mainly in Mumbai, aiming to expand its service area to Jaipur, Indore and Bangalore. The new company will use Divine's existing LPG filling stations and storage tanks, which has a combined capacity of 80t, at Jalgaon and Khopoli in Maharashtra state, while buying around 400-500 t/yr of LPG from the Mumbai LPG import terminal.

GOEI is Saisan's tenth overseas LPG company, having already begun sales in Mongolia, Vietnam, Indonesia, Cambodia, Bangladesh, Nepal, Thailand and Laos.

India's LPG consumption in the April 2018-March 2019 fiscal year grew by 7.3pc from a year earlier to around 25mn t. India's oil ministry in March forecast LPG use to rise to 26.23mn t in 2019-20.

Japan's LPG consumption during January-July totalled 7.7mn t, down by 3.1pc compared with the same period of 2018, according to the Japan LP gas association.

Government-affiliated think-tank the Institute of Energy Economics Japan forecasts LPG sales in Japan to rise by 0.8pc from a year earlier to 14.3mn t in 2019-20 but retreat to 14mn t in 2020-21. The slight increase in sales in 2019-20 is supported by firm demand from the household and commercial sectors during winter, after warmer than usual winter weather dented consumption for heating purposes in 2018-19.

The weaker domestic demand had previously prompted Japanese importer Gyxis to open an office in Singapore, as part of its strategy to increase LPG sales in southeast Asia, China and India that are expected to help compensate for dwindling demand in the domestic market.

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Japan’s Saisan to start LPG sales in India

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