Daily Mirror (Sri Lanka)
In an effort to maximise on the untapped avenues of growth, Laugfs Group Chairman W.K.H. Wegapitiya said the company has been pursuing and focusing on solutions for the urban domestic market as well as solutions for the rural market, which will be switching from firewood and kerosene to LPG. “Laugfs adopted a customer-centric approach to understand and address the concerns of the target market segments and compile holistic value propositions supporting customer retention.
The results are encouraging and have supported strong volume growth in the packed segment dominated by domestic use,” said Wegapitiya in the latest annual report of Laugfs Gas PLC. He shared that in Bangladesh, the company has identified the issues specific to the distribution of LPG in the country, particularly during the wet season. Plans are being conceptualised to address the same so that the volumes can be driven up “exponentially”. Wegapitiya added that the industrial segment also presents opportunities, yet, pointed out that competitive pricing is necessary to sustain the value proposition.
Although Laugfs is bracing for a new financial year that will be characterised by a recession and significant uncertainty due to the pandemic, Wegapitiya sounded optimistic in supply chain disruptions providing additional opportunities. He identified that there is potential for enhancing capacity utilisation of the entity’s infrastructure, particularly for storage and transportation of LPG to players in the region.
Furthermore, Wegapitiya noted that the company is “very much aware” that urgent action is required to uplift the financial performance of the Group, for which significant changes to the Group’s operating systems are already being made so that a positive change is witnessed.
According to Wegapitiya, the current market dynamics are favourable to Laugfs operations since as an essential service, demand is largely expected to remain stable, although demand from the bulk segment and hotels, restaurants and cafes are likely to moderate.
Laugfs Gas posted revenue of Rs.27 billion for its financial year 2019/2020 with Sri Lanka delivering a volume growth of 9 percent, and Bangladesh contributing 8 percent.
As increasing competition in Bangladesh led to an increase in selling and distribution expenses, exerting pressure on operating margins, the loss after tax of the energy sector increased to Rs.649 million in the reporting year.