IOC Middle East FZE, a wholly-owned subsidiary of Indian Oil Corporation, and RR Holdings Ltd, the holding company of Beximco LPG of Bangladesh, today signed an agreement for the formation of a 50:50 Joint Venture Company for LPG business in Bangladesh.
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, said Dharmedra Pradhan, Indian Minister for Petroleum & Natural Gas and Steel in a virtual ceremony.
He expressed confidence that similar to the success of LPG penetration in rural India, the new joint venture would be the catalyst of socio-economic change in Bangladesh through greater penetration of affordable LPG in the country, according to a statement from the Indian High Commission in Dhaka.
Salman Fazlur Rahman, Private Industry and Investment Adviser to the Prime Minister of Bangladesh, said the joint venture company (JVC) should serve as a testament to the remarkable investment potential of Bangladesh.
"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," he said.
State minister of Power, Energy and Mineral Resources of Bangladesh, Nasrul Hamid, said 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."
Speaking on the occasion Sanjiv Singh, Chairman, IndianOil, said that IndianOil started with lubricants marketing in Bangladesh in 1999 and is today joining hands with a formidable partner.
LPG market in Bangladesh has seen a five-fold growth in the past five years and is expected to grow at a CAGR of 12-13 percent. 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.
"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," Sanjiv Singh said.
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.
JVC also intends to diversify into other downstream Oil & Gas businesses e.g. lube blending Plant, LNG, Petrochemicals, LPG export to North East India through pipeline between two nations, renewable energy etc, says the statement.
Indian High Commissioner to Bangladesh, Riva Ganguly Das, was also present on the occasion.