New Delhi: IOC Middle East FZE, Dubai, a wholly-owned subsidiary of IOC (Indian Oil Corporation) and RR Holdings Ltd, Ras Al Khaimah, UAE, signed an agreement on Tuesday for the formation of a 50:50 Joint Venture Company (JVC) for LPG business in Bangladesh. RR Holdings Ltd is the holding company of Beximco LPG of Bangladesh. Minister for Petroleum and Natural Gas Dharmendra Pradhan, who presided over the function, said that the agreement is a major milestone in the annals of India-Bangladesh cooperation when a group company of IOC is joining hands with one of the most promising LPG companies in Bangladesh for LPG business in the country.
Pradhan expressed confidence that similar to the success of LPG penetration in rural India, the new joint venture would be a catalyst of socio-economic change in Bangladesh through greater penetration of affordable LPG in the country.
Salman Fazlur Rahman MP, Private Industry and Investment Adviser to the Prime Minister of Bangladesh, 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."
Nasrul Hamid, MP, Minister of State for Power, Energy and Mineral Resources of Bangladesh, said, "The Bangladesh government led by Prime Minister Sheikh Hasina has placed extreme importance on meeting energy demands of Bangladesh to become a developed country by 2041 as per Vision 2041. The JV between Beximco LPG and Indian Oil Corporation align with our goals and priorities," he 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," he added.
Speaking on the occasion, Sanjiv Singh, Chairman, Indian Oil, said that IOC 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 CAGR of 12-13 percent. The JVC will draw strength from the core competencies of Indian Oil and the local expertise of Beximco, he said. 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," said Singh.
"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," said an official statement released by Indian Oil.
"We are proud to join forces with Indian Oil, 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, RR Holdings Ltd.
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