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EMGAS Aims to Expand in International Markets

The Dubai-based company, known also as EMGAS, had the first LPG bottling plant in the Gulf region when it began operations in 1974. Today it has several bottling plants across the country, and it supplies commercial and residential customers using its own tanker trucks. EMGAS has diversified into supplying propane and aerosol propellants; these are a more environmentally friendly alternative to the chloroflurocarbons that damage ozone in the atmosphere.

It aims now to expand in the international market.

EMGAS General Manager Hesham Ali Mustafa discussed his company’s business, its ambitions and the challenges ahead in an interview with Khaleej Times earlier this month. Below are excerpts from the interview.

How is the UAE fuel market broken down between gas and electricity?

A)The majority of Dubai’s energy requirement is met through electricity. LPG has applications in certain niche areas of commerce and industry, such as fuel for cooking and heating, hotel applications, petrochemicals and other industrial manufacturing.

How fast is the UAE fuel market growing, and what trends do you see for future demand for gas vs. electricity?

A) The demand for energy is linked to the growth of the economy.

We expect that demand for Liquified Petroleum Gas and its derivatives will continue to increase to meet the demands of the fast-growing tourism and 
industrial sectors.

Who are your main competitors, and what is your market share?

A) EMGAS is the largest supplier of LPG in Dubai and the Northern Emirates and continues to be the leader in all aspects of secured supplies and public safety. The company supplies approximately 700 metric tonnes of LPG per day to hotels, industrial companies and medical sectors. EMGAS has four bottling plants in Dubai and the Northern Emirates and it caters to a wide distributor base of over 125.

Where does EMGAS source, process and containerise its gas? Is EMGAS vertically integrated to the point of making its own gas containers?

A) Our main source of Gas comes from our parent group ENOC, who are producers of LPG. EMGAS also sources new LPG cylinders from ENOC and other countries as well in order to diversify our supply chain options. EMGAS has filling plants in the Northern Emirates, and in Dubai cylinders are filled with LPG at our flagship facility in Jebel Ali.… For retail or household gas distribution, EMGAS supplies cylinders through a large number of distributors across Dubai and the Northern Emirates to reach a large segment of the community….

EMGAS supplies LPG in cylinders to many UAE households through a pre-approved distributor network. Each distributor meets strict standards of operation and conduct, as determined by EMGAS. Our distribution network is increasing because of an increase in demand for our products, and we continue to invest in this line of business. In 2008, we launched a public-wide campaign to change all the cylinders circulating in the emirate of Dubai and later this year in the Northern Emirates to a new compact, self-closing valve with added safety features.

What are the pros and cons of Compressed Natural Gas (CNG)? How much does CNG contribute to your total sales?

A) EMGAS is currently undertaking several pilot studies for the application of CNG in Dubai with RTA and other authorities. A key advantage of CNG is that motor vehicles can operate cost effectively on this fuel, and the reduced toxic emissions result in lesser impact on the environment. EMGAS’ objective is to promote the tourism industry and environmental protection by reducing pollution through the use of CNG in vehicles.

What were EMGAS’ sales and profits last year and for the first several months of 2009?

A) EMGAS continues to operate a successful business. The global economic downturn has impacted many sections of the local economy. However, we try to maintain a fair pricing mechanism in order not to add to inflationary pressures and ensure that EMGAS can upgrade and invest in advanced infrastructure and equipment to ensure maximum efficiency and safety.

Has the economic slowdown had any impact on your business? Can you give some specific examples?

A) EMGAS supplies to key sectors in the construction and hospitality industries that have been affected by the economic slowdown. However, other sectors of our business have continued to grow. We believe that the worst of the economic downturn is past and the economy is rebounding.

What international opportunities is EMGAS pursuing?

A) EMGAS is actively investigating LPG supply opportunities in countries that have underdeveloped LPG service infrastructure and, as such, presents an opportunity to partner in these countries and develop the LPG business.

What are some of the logistical solutions that EMGAS provides for its customers? What is remote gauging of tanks, why is it important, and is EMGAS the only company to offer this service in the UAE?

A) EMGAS is the leading gas supplier because customers can rely on receiving the best-in-class pre- and after-sales service. The company, with its large distribution network across the UAE, ensures that all customers have access to the product and get timely supplies through its large and modern fleet of tankers and trailers. Also, EMGAS’ well-trained and competent staff are valued for their knowledge and assistance they render to customers.

One of the value-added services that EMGAS provides is that of remote off-site monitoring of bulk LPG tank levels at customer locations, which involves a level gauge that transmits the level of LP gas in tanks to the control room of EMGAS at Jebel Ali. This allows for active management of the customer’s inventory of LPG, through a real-time monitoring system, thus preventing unforeseen LPG shortages.

Through the EMGAS website,www.emiratesgas.ae, customers can place online orders for their bulk LPG requirement which can be tracked on the system. SMS alerts are sent for booked orders and also upon final delivery of the product. This ensures peace of mind for our customers, safe in the knowledge that a critical part of their energy requirement is being safely and responsibility managed.

· bruce@khaleejtimes.com