SHV India acquires Caltex gas
SHV India, part of the EUR 11-bn SHV Group, said it acquired Chevron Group's Indian subsidiary -- Caltex Gas India --
for an undisclosed amount.
Caltex, based in Chennai, is engaged in import, storage, bottling and marketing of LPG, with revenues of Rs 350
crore. It is estimated that the deal is valued below Rs 500 crore. As part of its regular expansion plans, the
company said it would invest Rs 50-60 crore over the next 3-4 years besides setting up five more outlets by June,
2010.
"The decision to acquire Caltex Gas is a part of SHV's plans to grow its LPG business in India. With this
acquisition, we will expand our geographical presence enabling us to meet the increasing demand from the Industrial
and Commercial (I & C) segments," said Ajay Kumar, CEO, SHV India, which is popularly known by its brand -- Super
Gas.
With the acquisition of Caltex, SHV India's turnover stands at Rs 1,000 crore, besides clocking 13.2 % market share
of the total I&C segments. Currently, SHV caters to 30 % market in I&C segments and 12 % in auto gas sector.
As part of the deal, SHV acquired Caltex's import terminal at Tuticorin that increased its annual import throughput
to 180,000 tpy besides allowing the company to save $ 15-$ 20 per ton. This apart, it also acquired Caltex's two
cylinder filling plants one each at Madurai and Chennai.
Apart from Tuticorin, SHV also has two import terminals one each at Porabandar and Visakhapatnam.
Meanwhile, stating that private players have several challenges to overcome, Kumar said, "Local production of LPG is
reserved for Government Oil companies, while private players have to import."
"As a result, end customer has to pay hefty prices. Secondly, the domestic cooking gas segment is heavily subsidised
for public sector companies, forcing private operators to charge almost double the cost."
