Sri Lanka’s Laugfs Gas to expand LPG and leisure businesses into overseas markets
Laugfs Gas of Sri Lanka, which has reportedly diversified from a domestic cooking gas supplier to a regional trader and hotels, is currently holding talks with strategic investors to bring investments into its energy and leisure businesses.
“We are talking to a few leading companies – foreign partners – who will add a lot of value into our businesses when they invest,” Laugfs Chairman W.K.H. Wegapitiya has told economynext.com in an interview.
Wegapitiya has however declined to identify the potential investors yet, saying Laugfs group has signed non-disclosure agreements with them while talks were going on.
The group’s restructuring spun off the hotels, power and emission testing businesses, the media report has stated.
The revamp, which consolidated its core liquid petroleum gas (LPG), shipping and storage units into a pure play energy firm, was aimed at attracting foreign partners with specific knowledge of key sectors.
Some of the strategic partners who were keen on joining up in businesses like leisure had not been willing to come when they saw non-related units in the group, the report has further noted.
According to Wegapitiya, Laugfs is aiming to be a regional LPG supplier, not only supplying its existing Bangladesh market but to use its position to be an Indian Ocean player, eying opportunities in south Asia and as far as east Africa.
Existing operations include a procurement arm in Dubai, a fleet of three ships and storage and distribution of LPG in Sri Lanka and Bangladesh.
The group’s trading unit in Dubai is reportedly handling increasing volumes, the shipping arm is expanding its LPG product vessel fleet and the southern Hambantota port storage terminal commissioned in May will be a blending and supply hub.
According to the media report, Laugfs currently has a ship trading LPG between Vietnam and China.
LPG trading volumes by Dubai-based SLOGAL Energy DMCC are “growing slowly and gradually,” Wegapitiya has observed.
“Our Dubai operation is going to be one of the leading trading and supply chain companies in the Indian Ocean region. Our target for the 2019-20 financial year is to handle one million tonnes for our own and foreign markets.”
Apart from Bangladesh, Laugfs also sees big LPG market potential in Myanmar and Kenya.
OSL take:
The success story of Sri Lanka’s Laugfs Gas group and its expansion into foreign markets shows the strength and growth potential of the country’s private sector. As stated by the company’s Chairman, the company is engaged in discussions with foreign investors to further expand the LP gas and leisure businesses. All these are indicative of the business conducive environment in the country. Therefore, foreign businesses/investors could explore business/investment opportunities in Sri Lanka and also look at the possibilities of forming partnerships/joint ventures with local companies.
| Article Code : | VBS/AT/18072019/Z_4 |