IOC Middle East FZE, Dubai, a wholly-owned subsidiary of Indian Oil Corporation, India's largest refiner and marketer of petroleum products, and RR Holdings Ltd., Ras Al Khaimah, UAE, the holding company of Beximco LPG of Bangladesh, Tuesday signed an agreement for the formation of a 50:50 Joint Venture Company (JVC) for LPG business in Bangladesh.
Mr. Dharmedra Pradhan, Minister for Petroleum & Natural Gas and Steel, Govt. of India, who presided over the function, said that the agreement is a major milestone in the annals of India-Bangladesh cooperation when a group company of Indian Oil based in Dubai is joining hands with one of the most promising LPG companies in Bangladesh through its holding company in UAE for LPG business in Bangladesh.
The Minister expressed confidence that similar to the success of LPG penetration in rural India, the new joint venture would be the catalyst of socio-economic change in Bangladesh through greater penetration of affordable LPG in the country.
Mr. Salman Fazlur Rahman MP, Private Industry and Investment Adviser to the Prime Minister of Bangladesh, said: "The JVC should serve as a testament to the remarkable investment potential of Bangladesh under the leadership of Hon'ble Prime Minister Sheikh Hasina. At a time when the entire world is grappling with the severe economic consequences of the COVID 19 pandemic, this investment also reflects the resilient and enduring friendship between Bangladesh and India."
Mr. Nasrul Hamid, MP, Minister of State for Power, Energy and Mineral Resources of Bangladesh, also spoke at the event. "The Bangladesh government led by Hon'ble Prime Minister Sheikh Hasina has placed extreme importance on meeting energy demands for Bangladesh to become a developed country by 2041 as per the Vision 2041. The JV between Beximco LPG and Indian Oil Corporation align with our goals and priorities," he said. "As Bangladesh's middle class is rising with higher purchasing power, the LPG sector has seen an exponential boom over the years and is set to grow further in the coming years. As such, a partnership and investment at this scale between two experienced and major players has every potential to be a true game changer in the industry."
Speaking on the occasion Mr. Sanjiv Singh, Chairman, IndianOil, said that Indian Oil started with lubricants marketing in Bangladesh in 1999 and is today joining hands with a formidable partner in Bangladesh. LPG market in Bangladesh has seen a five-fold growth in the past five years and is expected to grow at a CAGR of 12-13%. The JVC will draw strength from the core competencies of Indian Oil and the local expertise of Beximco. As per the business plan, the JVC would begin functioning by acquiring Beximco's existing LPG assets."We intend to set up a large LPG terminal at a deep-water port in Bangladesh, which would facilitate receipt of LPG in Very Large Gas Carriers, leading to reduction in cost of imports. Reduction in cost of import would help make LPG available at an affordable price to the people of Bangladesh."
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