LAUGFS_Gas

LAUGFS Gas

LAUGFS Gas

Energy company in Sri Lanka

LAUGFS Gas PLC is a liquefied petroleum gas (LPG) company based in Sri Lanka. The company commenced operations in 2001 and in 2010, was listed on the Colombo Stock Exchange following an initial public offering. LAUGFS Gas expanded its operations to Bangladesh and the United Arab Emirates. In 2019, the company opened an LPG terminal at the Hambantota International Port, the largest of its kind in South Asia. LAUGFS Gas is ranked 33rd in LMD 100, an annual list of Sri Lankan listed companies by revenue. The Sri Lankan economic crisis heavily affected the operations of the company. Difficulties in securing foreign exchange have resulted in the disruption of LPG imports, shortages in the market and long queues. The company controls a number of subsidiaries but divested its Bangladesh operations in November 2022.

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History

The company was incorporated as LAUGFS Gas (Pvt) Ltd in 2000 and signed an agreement with the Board of Investment of Sri Lanka. In 2001, LAUGFS Gas entered into a tripartite agreement with the Ceylon Petroleum Corporation (CPC) and the Ministry of Finance to purchase CPC-produced LPG. The company commenced operations in the same year.[2] The company bought its first LPG vessel LAUGFS Wega in 2002. In the following years, the company expanded its LPG fleet with the fourth vessel, Gas Courage being bought in 2017. The gas price formula was introduced in 2007 after signing an agreement with the Consumer Affairs Authority.[1]

LAUGFS Gas announced an LKR2.5 billion initial public offering in 2010 and was listed on the Colombo Stock Exchange.[3] The company expanded to Bangladesh in 2015.[4] LAUGFS Gas completed the building of the LPG terminal in Hambantota International Port in 2018 and in the following year, the terminal, the largest LPG terminal in South Asia commenced operations.[5]

Operations

In July 2021, the company halted importing LPG after Consumer Affairs Authority refused a price hike despite increased raw material prices.[6] LAUGFS Gas was ranked 33rd in LMD 100, an annual list of listed companies in Sri Lanka by revenue in the financial year of 2020/21.[7] Brand Finance ranked LAUGFS Gas as the 70th most valuable brand in Sri Lanka for 2022 with a brand value of LKR816 million.[8] The company controls 20% of the LPG market share in Sri Lanka.[9] In November 2022, the company celebrated their 21st anniversary.[10]

Sri Lankan economic crisis

Main article: 2019–present Sri Lankan economic crisis

LAUGFS Gas is faced with difficulties in procuring US dollars from banks to open letters of credit during the Sri Lankan economic crisis. As a result, the company was unable to export gas to the country.[11] The lack of forex reserves for importing LPG caused gas shortages in the market and LAUGFS Gas and its duopolistic competitor Litro Gas suspended gas distribution. People were forced to stand in long queues to purchase gas.[12] In March 2022, prices soared by a record amount.[13] By December 2022, the market conditions were improved and the company ensured a continuous supply of LP gas.[14]

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Subsidiaries

LAUGFS Gas divested its 69% stake in LAUGFS Gas (Bangladesh) for US$16.1 million in November 2022. 31% stake in Dubai-based SLOGAL Energy also sold for US$7.254 million. LAUGFS Gas announced it would use the proceeds to reduce the debt exposure of LAUGFS Gas (Bangladesh).[18]

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Source: Annual Report, 2021/22[1]

See also

References

  1. [1]
    "Annual Report 2021/22" (PDF). cse.lk. LAUGFS Gas PLC. Retrieved 12 December 2022.
  2. [2]
    "Laugfs Gas celebrates 14 years in business". Daily Mirror. Wijeya Newspapers. 27 October 2015. Retrieved 12 December 2022.
  3. [3]
    "Laugfs Gas Limited announces Rs. 2,505 million IPO". adaderana.lk. Ada Derana. 21 October 2010. Retrieved 12 December 2022.
  4. [4]
    "LAUGFS Gas strengthens infrastructure in Bangladesh with new cylinder requalification plant". Daily FT. Wijeya Newspapers. 3 December 2018. Retrieved 12 December 2022.
  5. [5]
    "South Asia's largest LPG transshipment terminal by LAUGFS starts". Daily FT. Wijeya Newspapers. 2 May 2019. Retrieved 12 December 2022.
  6. [6]
    "Laugfs Gas halts Sri Lanka LPG import over price controls". The Island. Upali Newspapers. 25 July 2022. Retrieved 12 December 2022.
  7. [7]
    "Financial Profile". LMD 100. Media Services Pvt Ltd. Retrieved 12 December 2022.
  8. [8]
    "Sri Lanka 100 2022" (PDF). brandirectory.com. Brand Finance. 2022. p. 16. Retrieved 12 December 2022.
  9. [9]
    "Only 1.4% impact on inflation due to LPG price hike: CAL". ft.lk. Wijeya Newspapers. 13 October 2021. Retrieved 12 December 2022.
  10. [10]
    "Laugfs Gas turns 21". Sunday Observer. Associated Newspapers of Ceylon Limited. 6 November 2022. Retrieved 12 December 2022.
  11. [11]
    Hamza, Mahadiya (3 January 2022). "Sri Lanka's Laugfs says unable to import cooking gas due to dollar shortage". Economy Next. Echelon Media (Pvt) Ltd. Retrieved 12 December 2022.
  12. [12]
    "Gas shortage: Litro & Laugfs say no gas". newswire.lk. Wire Digital Pvt Ltd. 16 March 2022. Retrieved 12 December 2022.
  13. [13]
    "Laugfs Gas price increased from record amount". newswire.lk. Wire Digital Pvt Ltd. 20 March 2022. Retrieved 12 December 2022.
  14. [14]
    "LAUGFS Gas ensures continuous supply of LP Gas". The Sunday Times. Wijeya Newspapers. 4 December 2022. Retrieved 12 December 2022.
  15. [15]
    "LAUGFS gas increases LP gas prices". dailymirror.lk. Wijeya Newspapers. 5 June 2022. Retrieved 12 December 2022.
  16. [16]
    de Silva, Dudley (18 August 2022). "Sri Lanka's Laugfs Gas reduces cooking gas prices". Economy Next. Echelon Media (Pvt) Ltd. Retrieved 12 December 2022.
  17. [17]
    Farzan, Zulfick (11 October 2022). "Price Drop : Laugfs Gas reduced domestic gas cylinder prices". News First. MTV Channel. Retrieved 12 December 2022.
  18. [18]
    "Sri Lanka's Laugfs sells Bangladesh unit". Economy Next. Echelon Media (Pvt) Ltd. 16 November 202. Retrieved 12 December 2022.
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