Kathmandu, October 30

Saisan Co Ltd — a Japanese energy company — has acquired 51 per cent share of NL Gas Udhyog, a domestic gas bottling company.

This is the first time that any Nepali liquefied petroleum gas (LPG) bottling and distribution company has received foreign investment.

With this acquisition, NL Gas is now a Nepal-Japan joint-venture company. Nepali businessman Krishna Shrestha has 49 per cent share in the company.

Speaking to The Himalayan Times, Akio Murata, senior adviser of Saisan Co, said that acquiring majority share at NL Gas is a part of Saisan Co’s plans to expand its overseas business.

NL Gas and Saisan had signed a JV agreement on July 21. The Japanese company, which has 80 per cent of market share in the LPG market in Japan, has overseas LPG business in seven countries, including Cambodia, Bangladesh, Mongolia and Vietnam, according to Murata.

With the acquisition of majority share of NL Gas, Murata informed that Saisan Co will explore the Nepali LPG market and make NL Gas popular among consumers here.

The Japanese firm had been studying Nepal’s LPG market since April of 2016.

“Our study showed that the demand for LPG in Nepal is increasing by up to 10 per cent every year, which  makes Nepal a potential market for LPG. However, we also found instances of accidents caused by LPG,” said Murata and added that NL Gas will now give high priority to safety and security in its LPG cylinders by introducing different Japanese technologies.

NL Gas currently has its bottling plant in Bara and its business has been limited within the district. However, the JV company has already acquired licence from the government to set up manufacturing unit in Dhading (targeting the Kathmandu market) and in Jamune of Tanahu (targeting the Pokhara market).

As per Murata, Saisan Co will soon start to construct its LPG plants in the aforementioned places.

While Murata refused to disclose the amount of investment that the Japanese company is pumping into the country, he did say that the firm plans to strengthen its position in the domestic LPG market in the first phase, and is also preparing to introduce Japanese LPG bulk tank technology in the future.

Under this technology, Saisan Co will install LPG bulk tanks in different apartment complexes and big hotels and supply gas to all kitchens within the complex and hotels through pipes, thereby discouraging the use of LPG cylinders. In the long run, the company has a plan to supply cooking gas to all customers via pipelines.

“Once we are able to develop gas storage facility in apartments and hotels, this will ensure uninterrupted supply and reduce risks of accidents in these places,” said Murata.

The company has set a target to supply up to 4,500 metric tonnes of cooking gas in the domestic market within next one year and up to 10,000 metric tonnes per year from the second year.