Dublin-based LPG distributor DCC Energy, part of London-listed DCC, continues to expand through the acquisition of nationally focused retailers. This includes a deal announced this year to take over its peer UGI International's subsidiaries in central and eastern Europe. Its LPG-focused growth strategy encompasses plans to develop renewable alternatives for off-grid customers. Argus' Waldemar Jaszczyk spoke with DCC chief executive Donal Murphy to discuss its growth ambitions:
What has driven DCC's recent acquisition spree in eastern Europe?
We've always been acquisitive. We've acquired 400 businesses over the past 31 years as a public company. But we are in the midst of the biggest strategic change since we were founded. Up to now, we've been a diversified group — now we are purely an energy group. And our principal focus for growth is liquid gas. We love the characteristics of liquid gas, the nature of the customer relationships and we see it as a key energy transition product. It is also a really good platform to build a much broader energy solutions business for our customers. There's probably limited opportunity in some of those markets for further acquisition growth so it makes sense for us to be expanding into new geographies. We initially bought UGI's liquid gas business in Austria, where we were already a leading distributor after buying Shell's business in the country in 2010. We have never had a presence in eastern Europe but we've looked at markets there over the past 10-15 years.
Your recently acquired AmeriGas business in Poland is not part of the country's 1.8mn t/yr autogas market. Do you plan to change that?
This will be our first operation in the Polish market. The focus in the next couple of months is to get through all the clearances and take ownership of the business. Then we'll look at the best way to develop that business. I'm sure AmeriGas had good reasons why they focused on the commercial and industrial markets.
The eastern European acquisitions add about 132,000 t/yr in LPG sales. How are you going to supply the new markets?
Our supply footprint in continental Europe stretches from import facilities in France — where we can bring large cargoes in from the US and other locations — to land-based supply terminals. We have a team at DCC dedicated to supply and supply optimisation, which will add value. I know from our experience in Austria that it's very beneficial for the businesses to be part of a broader supply chain. There's lots of change in supply dynamics and we want to be well positioned to be a buyer of choice for suppliers, whether they're US or Middle Eastern producers.
How has your German arm Progas performed since its takeover in 2024?
Progas is a super business. It's been a very important addition to the group. We bought Linde's Tega business in 2018 so we had a modest presence in Germany. It's a good market for DCC because it's still very fragmented, so there's room for consolidation. Progas was a much bigger business than Tega, but the two teams have worked really well to combine their focus on the market. The new business is well bedded into the group and we're not finished in Germany. We'd like to have a much bigger business in the country as it's clearly a pivotal market in Europe.
Are you planning to make further acquisitions, and if so, where?
We want to double down. There's still a lot of white space in the European market that we want to grow into. Back in 2018, we made our first investment in North America and from then to today we've acquired quite a number of companies there, but we only have a 2pc share of the overall market. That's 2pc of a very big market, and it's a regional market, so we have stronger shares in some regions than others. But there's still lots of room to grow. Over time, we hope to expand into other regions. We had a business in Hong Kong and Macau, which we still have a shareholding in. We bought that with a view to one day expanding into southeast Asia. But for the next few years the priority will be Europe and North America.
DCC saw weaker Scandinavia sales in 2024-25 and the first half of 2025-26 due to low natural gas prices since 2022-23. What is your outlook for that market?
We are the largest player in Norway and Sweden. A lot of the business there is different. There isn't really a domestic heating market. The vast bulk of our business is serving large industrial and commercial organisations, which has been very resilient. We saw bigger customers using LNG and LPG — reverting back to LPG after the Ukraine crisis and natural gas shortages. But this has eased as gas pricing has somewhat normalised. I think this taught our customers the importance of resilience and security in the supply chain. So the future is quite robust.
DCC has invested heavily in improving supply security for the UK market, where recent refinery closures have tightened local production. How have your Teesside and Avonmouth projects helped?
This decision has worked out really well. Even before the Teesside terminal opened, we didn't need to be rocket scientists to work out that the market is highly dependent on inland refineries. One of the vulnerabilities was that the UK didn't have its own import infrastructure. We saw that the market was short of product over a couple of winters, which meant customer service was disrupted. Avonmouth was the first big investment for DCC. It has been hugely important to us over the past two winters by helping to serve customers at peak times. It's currently landlocked, but we fill it during the summer and then leverage it in the winter. Then Teesside came along as a bonus because it gives us direct access to propane from the North Sea. We are deep in the final planning stage for connecting Avonmouth to the nearby port jetty so that we can import cargoes and bring them to the facility, probably in 18-24 months. That will be a major step forward for us and the UK industry. In terms of winter supply, I think we're in good shape.
DCC formed renewable liquid gas (RLG) partnerships with DME supplier Oberon Fuels in 2023 and LPG distributor SHV in 2024. What progress has been made?
We are keen to find a competitive lower-carbon product to give to our customers. There is a fair bit of work, investment and trialling going on within the industry. We have a number of partnerships that we work on in this area. But we're still a long way from large and reliable supplies of bio-products. We're all [as an industry] supplying them to customers, but the volumes are still very small. I took on the presidency of the World Liquid Gas Association this year and one of my mantras is to make sure that the industry really doubles down on R&D and innovation in renewables. We've got to look at all sources, whether it's waste-to-energy to produce DME or if it's bioLPG from the production of sustainable aviation fuel or hydrotreated vegetable oil.
Is DCC in favour of introducing a renewable heating obligation (RHO) in the UK?
It's a key part of the industry's focus. If you look at the transport fuels market, the mandate has been key to making the sector decarbonise. It should be the same in biogases and as an industry we need to push for that to happen. In the Irish market, the government is bringing in an RHO that mandates a percentage of renewables within the gas mix. A lot of that is biomethane at the moment but it's a good step in the direction towards incentivising RLG.
What are the biggest challenges and opportunities for DCC in the near future?
The number one concern at the moment is geopolitics. We are entering choppy waters. Your agility is so important — the ability to supply a product that you have the infrastructure and capability to take from wherever it's available. Because what if the tariffs [get placed on your main supplier]? The opportunities are immense. Liquid gas has a hugely important part to play in the energy mix for a long time. We are the lifeblood as an industry for people living off the gas grid and its crucial that we evolve. That creates opportunities for people like ourselves who are dedicated investors in the sector. Our ambition is to be global, not just North America and Europe.
