SMPC upbeat on 2020 sales

Sahamitr Pressure Container Plc (SMPC), the world’s largest gas cylinder producer, estimates 2020 sales volume will grow by 30% to 7.3 million units thanks to rising demand for cooking gas or liquefied petroleum gas (LPG) in the household sector globally.

It expects next year’s sales volume to reach 8.4 million gas cylinders, 15% growth year-on-year.

Patama Laowong, senior vicepresident, said double-digit growth in 2020-21 would be driven by fast development of LPG infrastructures and household and economic expansion in Asia and Africa.

“SMPC believes our major markets still have abundant opportunities to grow,” she said.

With these projections for sales volume of gas cylinders, the utilisation rate of the plant in Bangkok will grow to 73% in 2020 and 84% in 2021. At present, the plant has a production capacity of 10 million units a year.

Mrs Patama said SMPC predicts global LPG consumption will see gradual growth in the short and medium terms, largely from Asia-Pacific.

For 2019, SMPC posted sales volume of 5.6 million cylinders, a 18% drop year-on-year, marking the first contraction in three years.

The utilisation rate for the period dropped to 56% from 80% in 2018.

In terms of value for 2019, SMPC reported 3.26 billion baht in sales, a dip of 26.9% year-on-year. Exports account for 90% of total sales and the domestic market 10%.

The major export destinations were Africa (31%), Asia-Pacific (24%), North America (21%) and Oceania (9%).

“Overall economic sentiment was bearish globally last year and some major destinations such as South Asia put off their purchase orders,” Mrs Patama said.

“Purchase orders are expected to resume this year, such as 400,000 cylinders each from Sri Lanka and Libya.”

SMPC is the largest gas cylinder manufacturer in the world, exporting to 100 countries. Two companies share second place — Amtrol-Alfa (Portugal) and Mauria Udyog (India) — with production capacity of 6 million cylinders each.

SMPC produces household LPG cylinders, automotive LPG cylinders and other types.

She said SMPC is considering establishing a new production facility overseas to lower operating costs and seek a lower wage market.

“The final investment decision has yet to be made, so we cannot disclose the country,” she said.

Last October, SMPC established new overseas subsidiaries for the company’s business expansion purposes. She said the development cost is estimated at US$13 million and SMPC plans to begin operation of the new production facility within two years.