PR Gaz, Inc.: Gaz Lite
The project's main objective is the conversion of solid fuel (wood, charcoal, biomass) users onto LPG, a clean energy. Majority of these users belong to the marginalized sector and are located in rural areas. In order to reach these last mile consumers, PR Gaz needs to increase its network of retail outlets which will serve as distribution hubs for the community stores that will carry its canister product. Additionally, the company needs to find a stable, cost-efficient source of supply in order to ensure that the price of LPG will remain affordable and attainable for its intended users.
PR Gaz, founded in 2001, is one of the top players in the LPG industry in the Philippines today. PR Gaz operates its own network of LPG convenience stores, called PR Gaz Haus, with branches in various key areas in Luzon.
In 2014, PR Gaz started its Gaz Lite offering - a single burner table top cookstove fueled by a small LPG canister and housed in a sturdy briefcase-type container. Designed for mobility, the compact product found a following among the marginalized sector due in part to its affordability. The smaller fuel serving, allows cash-strapped households to purchase canisters as they need them. To date, 70000 Gaz Lite systems have been distributed through its 70 (out of 184) stores. PR Gaz strengthened its distribution channels by activating 800 community stores as canister retailers. The Company partnered with 12 private and public entities, majority of whom are micro-financing institutions to facilitate consumer loans to facilitate for the procurement of the stove and canisters.
What problem are you trying to solve? Who has this problem?
Only about 55% of the Filipino households (23 million) use LPG for cooking. The other 45% predominantly burn firewood or charcoal to cook daily. Most of these families belong to the marginalized sector and live in rural areas. The price of standard LPG tanks (2.7 Kg - 11 Kg) is too steep for these cash-strapped households. Distribution/Transportation costs of tanks to rural communities add significantly to the retail price making cooking with cleaner LPG prohibitive in many areas. Thus, many households resort to solid fuels for cooking.
The direct burning of wood and charcoal produce harmful effects to health and the environment. There is a need and an opportunity to provide clean and affordable cooking systems and fuels to this significant unserved market.
PR Gaz is looking to serve the unserved 45% of the Philippine population by making LPG affordable and available through its Gaz Lite technology and a scalable business model. The Company is confident that the Philippines has another 1 million MT of unrealized demand that PR Gaz can access.
Moving forward, with the appropriate resources, PR Gaz aims to expand downstream to 500 stores serving 1,000,000 families through 100,000 community stores (sari-sari stores) by 2020. The total Gaz Lite canister sales volume from 2018-2021 is projected to reach 40.5 million which will amount to a total margin of USD 26.09 million.
In order to realize the full value chain, PR Gaz plans to obtain a VLGC (Very Large Gas Cargo) floating vessel of 44,000 MT to be used as a storage facility. Thus, it can ensure product security and affordability for its intended market. The objective is for the storage facility to be online by 2019 and will generate an additional revenue stream of USD 264 million.
Provides modern energy access to 1,000,000 households.
Improves the health conditions of 5,000,000 people.
Out of the total number of beneficiaries of the project, 1,000,000 are women.
Nelson Par, Chairman and CEO
Nathaniel Camat, Gaz Lite Product Manager
· Business Development
Matthew Par, Market Development