Beyond household LPG solutions, how Pune Gas is focussing on industries

Jesal Sampat, the second-generation owner of Pune Gas, tells the story of how his father Jaisinh Sampat founded the business in 1986 to ease access to liquefied petroleum gas (LPG) solutions. 

Initially, the company sold various products for LPG cooking for household use such as burners, regulators, and small pipes, among others. 

In the late 1980s, as LPG became more accepted as a fuel for commercial and industrial purposes, the company started providing products and solutions for commercial LPG customers like restaurants and hotels. Its products included pressure regulators, industrial gas hoses, gas leak detection systems, gas filters, and industrial burners. 

By 2000s, the company expanded into providing products, services, and solutions for industrial customers, serving companies like Britannia, Nestlé, MRF, Bajaj, Mahindra, Vedanta Group, Kirolskar, and Haldiram. Today, the company serves a wide range of customers across India and has even taken on projects outside of the country.

Talking to SMBStory, Jesal shares how his business has expanded to serve customers from households to local industries to now global businesses.

“While LPG is a readily available fuel and the cheapest one, people aren’t aware. It is more advantageous from liquid fuels and even CNG,” Jesal says, highlighting the need for more education about the benefits of LPG as a fuel and how Pune Gas fits into the LPG supply chain to provide expertise and regulation for customers.

The business plan

The company's main focus is on providing storage, pipelines, and equipment for customers to properly use LPG. It is also in the process of upgrading its website to be the first ecommerce marketplace for gas products.

Jesal says that its solutions are tailored to suit the requirements of several industries. According to him, Pune Gas’ expertise is in converting existing boilers and furnaces from solid or liquid fuels to gas fuels in order to save money and reduce carbon emissions. 

“While electricity is a commonly used energy source, it is expensive and not the most preferred source of fuel for industries, particularly when compared to LPG. The cost of electricity in industrial use varies between Rs 8 and Rs 15 per unit whereas the LPG could cost Rs 4-5 per unit," Jesal tells SMBStory.

"With government policies are promoting the use of gas-based fuels like LNG, LPG, CNG, and PNG, and that the company's goal is to educate and inform more customers about the benefits of using LPG as a fuel source,” he adds.

In the 1990s, the government allowed private companies to enter the LPG market, but with subsidies still being provided to household customers by government-owned companies, it was difficult for private companies to compete. However, with the change in the current government policies and the increase in commercial and industrial demand for LPG, we saw an opportunity to focus on providing solutions for these customers.

“We have expanded our offerings to include sophisticated measuring equipment and have been providing end-to-end solutions for our customers for the past 20 years. With the availability of LPG now reaching every part of the country and the number of LPG distributors doubling in the last 10 years, we are well-positioned to continue providing innovative solutions for our customers,” Jesal highlights.

The turnover of Pune Gas is Rs 28 crore.

The market 

According to a Mordor Intelligence report, the LPG consumption in India reached 27.6 million metric tonnes in FY 2020-21, witnessing an increase of 5% compared to the FY 2019-20. As of April 2022, the total number of active LPG domestic customers in India reached about 30.5 crores from 14.9 crore customers in 2015. 

The number of LPG distributors in India rose to 25,269 in April 2022 from just around 9,686 in 2010 and 15,930 in 2015. 

“Historically, LPG was primarily considered a household fuel, and knowledge about its potential in commercial and industrial settings was limited. However, with the introduction of larger cylinders and bulk storage tanks in recent years, the potential of LPG in these areas has become more apparent which consumers aren’t aware of,” he adds.

To combat this challenge, Pune Gas has taken a proactive approach by launching a training division that conducts seminars and workshops to educate industry professionals about the benefits and safe use of LPG in commercial and industrial settings.

The company has so far trained over 10,000 individuals and has plans to expand this initiative by partnering with the Ministry of Skill Development to receive accreditation in the Hydrocarbon Skill Development Division.

Another major challenge for Pune Gas is reaching remote areas of the country, where access to information and resources may be limited. To overcome this, the company is working to expand its reach and train individuals in these areas to communicate the benefits and safe use of LPG to their local communities.

Recently, Pune Gas has formed a joint venture with a German firm FAS to bring a new product to the Indian market: the LPG vaporiser.

“This innovative device is used to convert liquid LPG into a vapour form at a faster rate, making it more efficient for use in commercial and industrial settings. Prior to this, the Indian market for vaporisers was dominated by water bath-type vaporisers, which used water as a heating medium. However, Pune Gas's vaporiser uses a special alloy and patented technology to achieve the same results in a smaller and more cost-effective package,” Jesal explains.

The company began production of this new product in March and April of last year, and is now in the process of ramping up in order to meet the high demand for this product. 

“The future looks bright for Pune Gas as we continue to innovate and provide cost-effective solutions for the LPG industry,” Jesal says when asked about the company’s future plans.