Zahran invests in gas cylinder plant
Valor Econômico
The Zahran group, owner of the distributor of LPG used for cooking applications Copagaz, invested R$ 30 million (US$ 17.4 million) in a plant in order to meet the demand of its own distributor, which still needs to re-classify 900 thousand cylinders of the seven million it currently has in circulation. The new company of the group is called Indústria Brasileira de Vasilhame (Ibrava or Brazilian Bottling Industry) and, according to the CEO of the group Ueze Zahran, the next step is to seek customers throughout the market.
With the installation of the plant, the group starts operating in the entire production chain of liquefied petroleum gas (LPG), since it both bottles and distributes it through Copagaz and reclassifies the cylinders by means of the NHL. The new plant was opened in December, in the municipality of Monte Mor, near Campinas, in the interior of São Paulo, and the expectation is that it should produce nearly 400 thousand units in the first year.
In the assessment of the company, Brazil has only 100 million LPG cylinders on the streets, but in order to assure the supply of the consumer the calculation is that for each residence supplied it is necessary to have another four reserved. Such a deficit would generate a potential market of R$ 3 billion (US$ 1.74 billion), not counting the aftermarket.
Copagaz is currently the main company of the group and the decision of building the cylinder plant was taken in view of the high expenditure of the cylinder reclassification program and also because of safety in the replacement of the scrapped cylinders. According to Zahran, Brazil has 100 million cylinders that should be tested every ten years and the amount of cylinders scrapped after that gets to 8% or 9%. "The safety issue in the transport of cylinders filled with gas is very serious and has a high cost", says Zahran. "If one of these trucks suffers an accident, it causes damages within a 200 meter radius around it", he completes.