WP allots B100m to buy LPG cylinder factory

WP Energy Plc, Thailand’s second largest liquefied petroleum gas (LPG) trader, is preparing to acquire an LPG cylinder manufacturing and repair factory at a cost of 100 million baht.

WP deputy chief executive Noppavong Omathikul said the new asset has production capacity of almost 400,000 units per year, which is enough to serve its LPG sales.

The new factory should help the company save 60 million baht per year, covering repairing expenses of 10 million baht and new cylinder purchases worth 50 million baht.

In the long term, WP plans to increase cylinder manufacturing capacity for export. It is conducting a six-month feasibility study before making a final decision.

WP is also planning to diversify into the rooftop solar panel business to latch onto the trend for renewable energy. It wants to team up with a local construction firm for a joint development.

Mr Noppavong did not elaborate on the project, saying only the firm is a provider of energy solutions for small and medium-sized factories.

He said the deal with its new business partner will become clearer and finalised within this year.

Mr Noppavong said the company is preparing capital expenditure worth 400-500 million baht for 2021.

It will spend 400 million baht increasing the number of its LPG distribution centres nationwide by

‘‘ We expect LPG sales will reach 800,000 tonnes, or around 6% growth this year. NOPPAVONG OMATHIKUL Deputy chief executive, WP

17 branches.

The rest of the money will be used for another business diversification plan in the restaurant sector.

The capital spending excludes WP’s plan to acquire more LPG cylinder production facility assets domestically.

“We expect LPG sales will reach 800,000 tonnes, or around 6% growth this year,” said Mr Noppavong.

He blamed Covid-19 pandemic, which led to the countrywide lockdown in early 2020, for causing a sales drop from its target of 800,000 to 750,000 tonnes last year, a 1.3% decline from 2019 sales of 760,000 tonnes.

After the easing of the lockdown, LPG sales returned to normal in the third and fourth quarters of 2020, with around 200,000 tonnes of LPG sold in each quarter.

The sales volume was 95% of that of the pre-pandemic period.