Energypac eyes LPG business expansion

Energypac is set to invest more in LPG trade from its IPO (initial public offering) proceeds to grab a large share of the growing liquefied bottled gas market.
The local energy and power conglomerate's LPG (liquefied petroleum gas) brand name is 'G-Gas'.
It said the capital-intensive industry needs fresh investment to procure new equipment and widen service.
Energypac Power Generation Limited (EPGL), the parent company, is in the process of raising Tk 1.5 billion from the stock market through book-building method for expanding its LPG market.
The bidding for eligible investors will begin at 5:00 pm on September 21.
The bidding through the electronic subscription system of the exchanges will continue until 5:00 pm on September 24, according to an official disclosure.
IPO proceeds will also be utilised to procure LPG carriers, ships, vehicles and other accessories, import of cylinders and pay loans, EPGL deputy general manager Md Lutfar Rahman said.
"As the EPGL always stresses good governance, stock market listing will help strengthen its corporate structure and expand business," he told the FE during a visit to G-Gas plant.
Energypac's LPG business contributes to almost half the total revenue earned by the EPGL, he disclosed.
There are a good number of revenue lines for the EPGL, which also deals in different types of vehicles, generators, power equipment and prefabricated building materials.
"So many revenue lines have been helping the company to maintain a strong financial footing for a long period," Mr Rahman mentioned.
The plant, capable of making new cylinders and bottling them with LPG, is located in the estuary of the Rupsha and Jhapjhapia in Khulna's Dacope sub-district.
Mr Rahman said Energypac has invested significantly in LPG business and requires more money for further expansion as it is an investment-intensive industry.
Beginning its journey in 1995 as an electrical and engineering business, the EPGL has diversified business divisions over time.
During a visit on Tuesday, the plant was found operating in full swing with special health security measures in a bid to minimise the risk of spreading deadly coronavirus.
"Considering the pandemic, we've taken all measures required to disinfect vehicles and cylinders entering and leaving the facility," said Abu Sayed Raza, head of EPGL's LPG division.
The facility is capable of storing 5,200 tonnes of LPG in line with the government's order to sustain permanent licence, he added.
The EPGL is establishing another satellite plant in Narayanganj with a storage capacity of 1,200 tonnes.
Mr Raza said the facility in Khulna is capable of manufacturing an estimated 0.1-million units of LPG cylinders per month.
The EPGL expects to export cylinders next year after meeting the local demand, he added.
"The local LPG market is growing at the rate of 15-18 per cent per year," Mr Raza said while explaining the prospect of the business in the country.
To increase the use of LPG as auto gas, the company has won the government approval to operate 300 stations.
"The facility has helped improve the socio-economic condition in Dacope with 270 direct jobs and contributes to the vicinity through different corporate social responsibility programmes." G-Gas is providing the 'costly' fresh water to the local people. It also runs a campaign to clean rivers.
Industry sources said 22 LPG companies are currently operating in Bangladesh and 56 have got licences to start the business.

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