Daily Mirror (Sri Lanka)

Laugfs Gas...

- Business · Finance · Investing · Bangladesh · 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.

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