South Korea’s largest industrial conglomerate Hyundai BS&C is exploring business opportunities in Thailand starting with manufacturing a liquefied petroleum gas (LPG) cylinder made of composite material in Nakhon Ratchasima.
"We aim to have a business chance in Thailand not only in gas cylinders but also in IT and the construction sector," chairman of the board Lee Hyu-won told a press conference in Bangkok yesterday.
With an initial investment of 500 million baht, the Thai plant is set to be the company's cylinder production base for the region. Thailand is the largest LPG consumer in Asia and ranks number 10 globally.
Patented by Hyundai, the composite is made of high-density polyethylene and composite materials using the filament winding process. Construction will start end of this year for the plant to operate in mid-2015.
Yesterday, Hyundai announced its joint venture with PAP Gas and Oil Co, Thailand’s sixth largest LPG trader, with shareholding of 30% and 70%, respectively.
PAP executive vice president Wiroj Jantraprawej said the plant has already received a construction permit but is waiting for investing privileges from the Board of Investment.
It is set to produce 50,000 units in the first year but with the capacity to roll out a total 200,000 units in the near future.
But PAP will first import Econn, the composite LPG Cylinder developed by Hyundai BS&C, with a total of 50,000 units of the three- and six- kilogramme sizes this year.
Last year, sales in the transport sector accounted for 70% of PAP's total revenue with 20% and 10% coming from the industrial and household sectors, respectively. With the launch of the Econn cylinder, the company targets sales from the household sector doubling to 20% by the year-end.
PAP expects LPG sales to rise 17% this year to 4 billion baht with sales volume surging 42% to 20,000 tonnes per month from 14,000 tonnes in 2013.
Compared with conventional steel-made cylinders, Econn is lighter in weight and boasts a longer service life with lower maintenance costs and higher safety. However the price is three times that of conventional steel-made cylinders.