IOC Middle East FZE is a wholly-owned subsidiary of Indian Oil Corporation, India’s largest refiner and marketer of petroleum products
IOC Middle East FZE, Dubai and RR Holdings Ltd, Ras Al Khaimah, UAE, the holding company of Beximco LPG of Bangladesh, on Tuesday signed an agreement for the formation of a 50:50 joint venture company for LPG business in Bangladesh.
IOC Middle East FZE is a wholly-owned subsidiary of Indian Oil Corporation, India’s largest refiner and marketer of petroleum products, says a press release.
India's Minister for Petroleum and Natural Gas and Steel Dharmedra Pradhan, who presided over the function, said: "The agreement is a major milestone in the annals of India-Bangladesh cooperation when a group company of IndianOil based in Dubai is joining hands with one of the most promising LPG companies in Bangladesh through its holding company in UAE for LPG business in Bangladesh.
The minister expressed confidence that similar to the success of LPG penetration in rural India, the new joint venture in Bangladesh would be the catalyst of socio-economic change through greater penetration of affordable LPG in Bangladesh.
Sanjiv Singh, chairman of IndianOil, said that IndianOil started with lubricants marketing in Bangladesh in 1999 and is today joining hands with a formidable partner in Bangladesh. The LPG market in Bangladesh has seen a five-fold growth in the past five years and is expected to grow at a compound annual growth rate (CAGR) of 12-13%.
The JVC will draw strength from the core competencies of IndianOil and the local expertise of Beximco. As per the business plan, the JVC would begin functioning by acquiring Beximco’s existing LPG assets, he also remarked.
“We intend to set up a large LPG terminal at a deep-water port in Bangladesh, which would facilitate receipt of LPG in Very Large Gas Carriers, leading to reduction in cost of imports. Reduction in cost of import would help make LPG available at an affordable price to the people of Bangladesh," he added.
State Minister for Power, Energy and Mineral Resources Nasrul Hamid said: "The Bangladesh government led by Prime Minister Sheikh Hasina has placed extreme importance on meeting energy demands for Bangladesh to become a developed country by 2041 as per the Vision 2041. The JV between Beximco LPG and Indian Oil Corporation align with our goals and priorities.”
As Bangladesh’s middle class is rising with higher purchasing power, the LPG sector has seen an exponential boom over the years and is set to grow further in the coming years. As such, a partnership and investment at this scale between two experienced and major players has every potential to be a true game changer in the industry, he added.
Salman F Rahman, private industry and investment advisor to the prime minister, said: “The JVC should serve as a testament to the remarkable investment potential of Bangladesh under the leadership of Prime Minister Sheikh Hasina. At a time when the entire world is grappling with the severe economic consequences of the Covid-19 pandemic, this investment also reflects the resilient and enduring friendship between Bangladesh and India.”
“We are proud to join forces with IndianOil– combining our downstream value chain and customer insights with their unparalleled strength and expertise across the entire hydrocarbon sector. Together, we believe our combined strengths will allow us to be on the leading edge of the innovation curve that will enable us to become the largest downstream oil and gas company in Bangladesh,” said Shayan F Rahman, chairman of RR Holdings Ltd.
The JVC aspires to become the most trusted, admired and premiere LPG company in Bangladesh offering the safest, smartest and most convenient LPG solutions with best-in-class customer service.
It also intends to diversify into other downstream oil and gas businesses, for example lube blending Plant, LNG, Petrochemicals, LPG export to North East India through pipeline, renewable energy etc.
Riva Ganguly Das, High Commissioner of India to Bangladesh, was also present on the occasion.