SET-listed Siam Gas and Petrochemicals Plc (SGP) says it is expanding its liquefied petroleum gas (LPG) transport facility and logistics system overseas in order to increase sales to offset a drop at home, says Jintana Kingkeaw, chief financial officer and managing director.
SGP also diversified into the power business in Myanmar by purchasing a 30% share in Myanmar Lighting IPP Co through Singapore-based Asia Tech Co worth US$48 million.
Mrs Jintana said SGP plans a substantial expansion in export facilities in Myanmar, Cambodia, Vietnam, Malaysia, Singapore and China by acquiring existing local operators, including LPG terminals, road tankers and vessels.
The retail price of LPG was capped at 18.13 baht per kilogramme for more than two decades, encouraging motorists to use it for transport. However, demand collapsed the past few years when the government started to float the retail price.
The price was completely floated in February 2015, causing the LPG retail price to rise 33% to 24.16 baht per kg and making demand to drop by 12.3% in 2015 and 17% in the first half this year.
The company has a 3,500-tonne LPG bonded warehouse, awarded by the Department of Energy Business, that could be used to assist LPG re-export to neighbouring countries.
This year SGP expects its overseas sales to grow by 10% to 1.96 million tonnes, up from last year's 1.78 million. Mrs Jintana projects the major export markets to be China and Vietnam, buying 950,000 and 180,000 tonnes, respectively.
The company also wants to export to Bangladesh and is conducting a feasibility study on whether to expand via a merger, acquisition or greenfield operation, she said.
Over the last six years, SGP has acquired gas logistics and transport facilities in many countries including China, Vietnam, Malaysia and Singapore. The company also has a business partner in Myanmar.
For the domestic market, the company plans to sell oil to offset the drop in gas sales. It is in talks with the Bangchak Petroleum Plc to use its oil refill dispensers at SGP petrol stations, starting in Ayutthaya province.
It expects overseas sales to account for 70% of total sales within two years, up from 56%. SGP also acquired a gas-fired steam turbine in Myanmar.