Gas Prospects

Oct 21, 2010 (LBO) – Sri Lankan liquid petroleum gas supplier Laugfs Gas is raising 2.5 billion rupees to settle debt, expand facilities and also enter property development as the country recovers from a war, its promoters said. Market Growth

Laugfs has a 28 percent share of the total LPG market which it aims to increase to 50 percent in the next two years.

Gas sales grew at a cumulative annual growth rate of 14.3 percent in the last five years to 47, 388 metric tonnes in 2009.

The prospectus attributed the growth to penetration of competitor market share, pricing strategy and gradual growth of the industry.

However, the prospectus warned, price sensitivities and availability of substitutes have been the key concerns which may impact on Laugfs in future.

Pushparajah said accelerating economic growth will lead to a wealthier population and rising demand for LPG.

Greater household income will enable lower income consumers to shift their cooking fuel from wood and kerosene to LPG.

Only about a quarter of the population now use LP Gas.

Growth in industrial production and the tourism sector, which is booming after the end of the island’s 30-year ethnic war in May 2009, is expected t