WP confident of boosting LPG sales
Firm aims to ramp up export revenue to 5%
WP Energy Plc, a SET-listed liquefied petroleum gas (LPG) trader, is confident that it can achieve total sales volume of 900,000 tonnes this year, a 3% rise despite the bearish outlook for the transport sector.
Noppavong Omathikul, director of accounting and finance at WP, said that while LPG demand from the automobile segment has declined by double-digit rates since 2014, overall usage can grow with a focus on the industrial sector, as well as promoting the use of cooking gas at home.
"LPG pricing in 2018 is expected to be slightly lower year-on-year, but it will not affect WP's total revenue," Mr Noppavong said.
The average ex-factory price of LPG in 2018 is projected to stay below 15 baht per kilogramme, compared with nearly 16 baht last year.
Moreover, WP can beef up its revenue from LPG exports, which are set to become a key competency for the firm, Mr Noppavong said.
WP will focus on re-exporting LPG to neighbouring countries, where annual demand growth is expected to continue.
Several governments in neighbouring countries plan to ban the usage of charcoal, replacing it with LPG, as part of forest reclamation efforts.
Mr Noppavong said the quantity of LPG exported to those countries will reach 12,000 tonnes in 2018 and increase to 40,000 tonnes by 2020.
WP aims for export revenue to account for 5% of the total by 2020.
Distortions caused by LPG price controls and subsidies have been eliminated, closing the retail gap between Thailand and neighbouring countries.
This will eliminate a key barrier to exporting LPG, Mr Noppavong said.
In 2018, WP will spend 550 million baht on the third phase of its new LPG terminal in Chachoengsao.
The company expects to start commercial operations by 2019.
WP wants to increase its LPG capacity from 8,989 to 18,489 tonnes by the end of next year, serving future growth in LPG consumption for home cooking and the industrial sector.
The LPG market in 2018 is expected to remain competitive, particularly the household sector, which accounts for 40% of WP's revenue.
The automotive sector accounts for 36% of the firm's income, while the industrial sector generates the rest.
Mr Noppavong said WP is conducting a feasibility study to diversify revenue.
The company aims to become a safety management provider at LPG facilities, as well as provide marine vessel services.
WP shares closed Wednesday on the Stock Exchange of Thailand at 7.85 baht, up 15 satang, in trade worth 30.7 million baht.