Thailand
Thailand: SGP keen on LPG route to South Asia
SET-listed Siamgas and Petrochemicals Plc (SGP) plans to add four or five new ships to the marine transport fleet for liquefied petroleum gas (LPG) to expand shipment routes to South Asia.
SGP’s current marine transport lines for LPG extend to East Asia and Southeast Asia.
Jintana Kingkaew, deputy managing director, said each ship will cost US$4-15 million (127-475 million baht), depending on size.
“South Asia has potential demand for LPG, while SGP’s existing fleet of 25 vessels is not enough to cover the new route,” she said. “SGP is also interested in investing in the LPG receiving terminal in Bangladesh to support expansion in South Asian countries.”
Founded in 1976, SGP is engaged in LPG trading in Thailand, Singapore, China, Malaysia and Vietnam. It also operates two power plants with a transmission line in Myanmar.
SGP expects LPG sales volume to grow by 10% to 3.77 million tonnes in 2019 as demand rises across the region.
“The sales growth will come from every SGP market in Asia where it has had LPG logistics facilities for more than a decade,” Mrs Jintana said.
Domestic LPG makes up 28% of SGP’s total sales volume. SGP expects 3.9% growth to 1.05 million tonnes domestically this year.
For SGP’s overseas business, LPG sales volume is expected to grow by 12.4% to 2.72 million tonnes in 2019, representing 73.1% of total sales volume.
China has the largest LPG volume for SGP, with 1.7% growth projected to 1.3 million tonnes in 2019, while sales in Malaysia and Singapore are expected to grow by 34% to 225,000 tonnes.
Vietnam is projected to grow sharply by 42.3% to 45,000 tonnes.
SGP has an LPG offshore trading business with a sales volume of 1.15 million tonnes, up by 22%.
“The LPG market in China is likely mature, and while SGP controls the market share in southern China, the company needs to generate more volume by expanding to central and north regions,” Mrs Jintana said. “The Vietnam market faces stiff competition because of the LPG price war, so SGP has to emphasise retail channels instead of wholesale.”
Moreover, SGP has to diversify its trading business to other petroleum types such as liquefied natural gas, she said.
For 2018, SGP posted revenue of 69.1 billion baht, up 15.9%, but net profit plunged 69% to 871 million baht. In Thailand, SGP was ranked No.2 in the LPG market with a 24.6% market share after PTT, which controlled 41.1%.
In 2018, the overall LPG market stood at 4.01 million tonnes, down 2.4%.
SGP shares closed yesterday on the SET at 9.25 baht, unchanged, in trade worth 26.3 million baht.
Source: https://www.bangkokpost.com/business/news/1643660/sgp-keen-on-lpg-route-to-south-asia